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Merchant refund scam

The Card Payments Industry has become aware of scams where merchants are being targeted by fraudsters who are impersonating merchant acquiring banks, card machine vendors and engineers in order to perpetrate fraud.

Bogus callers contact merchants and ask for a number of test transaction(s) to be processed through the point of sale equipment (i.e. Sales & Refunds). Card details are provided by the bogus caller for these transactions.

Merchant staff will be asked to make a refund to cancel the original test transaction(s), i.e. the sale.

The card number given for the refund transaction(s) will not be the same /match any of those given for the sale(s) transactions. This is the scam.

Please note- the refund transaction(s) may also not match the sales transaction values.

When the refund(s) is processed this will generate a debit to the Lloyds Bank Cardnet Merchant account and a credit to the card account(s) given. This enables the fraudster to use / access the funds the merchant has placed on the card.

Obtaining Card Data for fraudulent use

Bogus callers contact merchants to request details of all transactions processed that could include card numbers, expiry dates, card security codes and personally identifiable information such as cardholder names and addresses.

They will then use this information to perpetrate card fraud.

Prevention / Detection

Any changes/service visits, or test transactions involving your point of sale card machine equipment will be pre-arranged by us or you point of sale card machine vendor.

If your staff are in any doubt as to whether an Engineer approach is legitimate or not, or are in any way suspicious, staff should be advised to:

  • Hang up and call us on 01268 567100 to check the request is legitimate.
  • Always call us on a fresh separate telephone line (i.e. ring out on a Mobile line if approached via land line & vice versa).
  • Ring out - Do not be deceived by co-incidental inbound calls purporting to be from us, this is part of the scam.

Further information on how to prevent fraud can be found within the Lloyds Bank Cardnet Retailer Operating Manual on pages 70-74.

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