November 9, 2011
Honest Restaurant Owner Held Responsible For Fraudulent Transactions
Here’s a true story that you may be able to relate to. You’re a merchant running a large local or national restaurant or other retail business. You work very hard and you’ve been fortunate to attract quality people along the way, people that are loyal and very hard working, people that have become family.
You have 5 different locations and the management team that you’ve finally assembled in place does a great job and despite the challenging economy, you are beginning to do quite well again. Mostly due to your cost saving efforts and hard work.
You’re comfortable and the future looks good when all of a sudden and without warning your business checking account is debited nearly $200,000. The money literally disappears overnight without notification.
You only find out because your morning coffee purchase at Starbucks was declined on your company debit card, which should have just over $185,000 available on it.
You’re calm on the outside and anxious on the inside because in this economy every sale counts and you’re certain there’s a mistake that someone must have made.
After several attempts you’re finally able to make contact with the bank manager and to your horror the banker calmly answers your question about the available funds, “your money is gone and we can’t help you get it back.” Your $185,000 is gone.
You find out for the first time that a couple of your customers had their credit card accounts compromised over a year ago. The cardholder information used to perpetrate the fraud was traced back to your point-of-sale location.
Unbeknownst to you, a card-skimmer had been attached to your point-of-sale device(s). A criminal conspirator with a laptop computer wirelessly collected the cardholder data required to perpetrate fraudulent transactions with each and every swipe of your customer’s credit cards.
Within a period of about 2 weeks a series of online and retail purchases totaling the $185,000 had been quickly executed using the compromised cardholder data that was obtained.
Although the criminal investigation began shortly afterwards it was completed approximately 1 year later. Because the electronic terminal that the cards were swiped through wasn’t PCI-DSS compliant as required and because the cardholder data was obtained at this point, the merchant, you, became responsible and liable for the fraudulent transactions.
This kind of a financial hit will put most of us out of business. These sudden fund disappearances from merchant accounts have been occurring more and more, since the migration of fraudsters operating in EMV mandated Europe to the unprotected shores of the U.S., where EMV is finally about to begin, but isn’t in use yet.
Merchant accounts have been debited a few hundred dollars, tens of thousands, hundreds of thousands and yes, even millions of dollars literally overnight and without notice. This can often mean the difference between business life and death.
The quickest and most reliable solution for a business owner/ operator is to immediately implement a mobile POS payment solution that is PCI-DSS compliant. These systems and devices are now available in different formats from a few select providers.
Upon use of PCI-DSS compliant terminals to process your credit card transactions, the burden of financial responsibility shifts immediately from the merchant to the processing company and/or the issuing bank, eliminating your financial risk.
By utilizing iPads, iPods, iPhones, Windows and Android powered mobile devices that provide powerful and robust POS features, the merchant can capture an increase in sales and enhance the customer experience, while maintaining PCI-DSS security and safety.
This new technology and these mobile devices are quickly reshaping how we conduct business across the country and around the world. To name just a few, Apple, Nordstrom, Home Depot, Lowes and many more have recently instituted various forms of mobile POS or mobile payment functionality.
By enabling mobile POS payments you can accept payments from your customers right wherever they are on the sales floor or in the warehouse, and you eliminate potential 3rd party compromises. The devices are mobile and in possession of your trusted personnel, so they won’t ever be compromised because of your security and control policies.
The devices don’t cost an arm and a leg and an operating system or technology such as that in use at national Apple stores can be quickly and easily obtained and implemented through a reliable and trustworthy provider.
Rick Berry is President/CEO of ABC Mobile Pay, a mobile POS payment solution provider. Rick is an expert in both the payments and the mobile space.