When a customer tries to enter their credit card number directly into the terminal at your business, you should be suspicious of possible fraud. Recently, there have been a number of cases of people stealing credit card numbers and using them to buy merchandise at retail stores.
Steve Lim, who owns six souvenir shops in Southern California, including Arcadia, has been victimized at least four times in recent months. The fraudsters would stop by the store, pick out an item, and then manually enter their credit card number into the register’s card terminal.
“When the fraudsters inserted a credit card with an integrated circuit (IC) chip into the card terminal, it wouldn’t work,” Lim said. “Then they would claim that the credit card was broken and would manually enter the ’16-digit card number’ into the terminal. If you pay without realizing it, two to three weeks later, your bank or credit card company will chargeback for accepting a stolen card.”
Currently, retail card terminals provide credit card IC chips or NFC payment systems such as Apple Pay. However, if IC chip or NFC payment is not available, the card number can also be manually entered into the terminal. Fraudsters are taking advantage of the manual entry loophole in modern card terminals.
“When entering the card number manually, you need to enter a 16-digit number and press the OK button to pay,” Lim said, adding, “Usually, businesses don’t enter the customer’s card number manually, but since the terminal has this function, fraudsters seem to have taken advantage of it.”
In particular, fraudsters target businesses during peak hours. This is because businesses often allow customers to enter their card numbers manually if there are a lot of customers waiting in line.
“If it’s recorded as a handwritten entry on the sales receipt and becomes a problem later, it’s still considered a chargeback,” Lim said. “The fraudster has already disappeared with the goods, so if the chargeback happens two to three weeks later, the business is the only one who suffers.”
Lim said he experienced the same scam in the past few days. Some scammers took a picture of the stolen card number on their phone and secretly entered the 16-digit number. “They come in pairs of two or three and look like normal shoppers, so it’s not easy to tell them apart,” Lim said.
According to the business owners, there is no way to compensate victims of the scam. Even if they call the police, they say it’s difficult to track down the suspects.
“The damage caused by the same method is more than $2,200,” Lim said, “and it’s not easy to punish them because they often pay less than $950 for a single fraud. Be careful when customers ask you to enter their card numbers directly into the terminal during busy hours.”
BY HYOUNGJAE KIM, JUNHAN PARK [kim.ian@koreadaily.com]
