Finance News

Surviving In A World Filled With Scammers

Payment scams

​​In today’s world, it is essential to be able to accept payment via debit or credit card. However, this is a lot easier said than done when you consider the risks businesses face today when accepting payments and dealing with confidential payment information and personal data. All companies need to take action to ensure this data is protected from scammers whose actions would cost their business dearly. 

For businesses in the UK, cashless payments have become the norm. Customers expect to be able to pay for all goods and services using their debit or credit card, or by using a mobile phone or app, no matter how cheap or expensive their purchase is. If you do not have a merchant terminal or offer electric payment facilities, there is a very high chance you are going to lose out on a number of sales as a consequence. 

At the same time, you need to recognise that an electronic payment system represents a way in for hackers if you do not protect it properly. This is why it is vital to educate yourself on payment fraud and take the required steps to safeguard your company. If you do not, you could be left out of pocket for chargebacks and the value of other goods and services that have been obtained fraudulently. 

Educating yourself on the common types of payment scams

There is no denying that criminals are getting more and more sophisticated. A lot of hackers devote all of their time and energy to locating and exploiting vulnerabilities within electronic payment systems. Therefore, it is vital to understand some of the most common types of scams so that you can take the required steps to safeguard against them. Two of the most common scams targeting businesses in UK are as follows…

Third-party payment scams – If you process a payment on the behalf of a third party, this could end up costing you a lot of money. This is something that one dance school owner experienced. The owner of the dance school had been exchanging a number of emails with a prospective client. He agreed that he would take payment via credit card for the student’s tuition via email. He also accepted an additional amount to pay the driver to bring the child to the lessons. Therefore £1,200 was paid in total. Out of this, £500 was for the driver and then £700 was for the lessons. The driver collected his £500 in cash the following day. However, the child in question did not turn up and the parent stopped communicating. It was then revealed that the card details had been stolen. Not only was there a £1,200 chargeback, but because the business had paid the driver £500, this money was lost.

Terminal takeover – A temporary ‘take over’ of a merchant terminal is another example of a common payment scam that UK businesses fall victim to. This enables a scammer to re-key a transaction amount or to use a stolen card number to pay for goods or services. To showcase how this could happen in real life, we will give you another truthful example regarding a business in the UK. This time it was a cafe, which suffered because of this payment scam. During this incident, two diners insisted on holding the terminal for ‘security reasons’ when they paid £25 for their breakfasts. While one of the customers ensured that the cashier was distracted, the other cancelled the original transaction and they entered a new one for £2,500. He keyed in a stolen card number in order to make a payment. Once he received the receipt and it showed the £2,500 charge, he demanded a refund immediately. He insisted this was to be paid on his friend’s card because he was late for work. The owner of the cafe agreed to do so, hoping to defuse the situation. However, a week later, he then received a notification of a chargeback when the person who owned the stolen card report it as fraudulent. 

Tips on how to prevent these sorts of scams

Ow that you have a better understanding of some of the most common payment scams that UK businesses need to deal with today, it is important to follow these tips to reduce the chances of you falling victim to such an incident…

  • Always go with your instinct. If you have any worries about a transaction, get in touch with your bank for some additional advice.
  • Educate your employees about common scams by talking to them about the likes of scam alerts and providing them with examples of fraud incidents.
  • Never refund money to a card other than the one that was originally presented.
  • Do not allow people to leave credit or debit card details with you to be processed once they have left the premises.
  • Do not agree to forward payments to other companies.
  • Do not accept payments on behalf of third parties or for services that you did not provide.
  • Ensure payment terminals are kept behind the counter. Do not enable customers to manually enter or edit transactions. You should also ask your banker to switch off the key entry feature if you do not need it. 

As you can see, there is no denying that companies need to act with caution and be diligent when it comes to protecting debit and credit card data today. All UK residents now expect to have the option of paying with their debit and credit card. Not only is it up to you to provide them with this solution but you also need to make sure that you take the required steps so that they are protected and their financial data does not end up in the wrong hands. You also need to make sure that all of your staff members are aware of the most common payment scams so that they do not fall victim to them. 

To Top

Pin It on Pinterest

Share This