According to the National Fraud Information Center – credit card fraud in the United States has reached nearly $1 billion. Did you know that nearly 70% of credit card fraud occurs during the holiday season? (Department stores often have long lines and hurried staff making it easier for fraudsters to pass along fraudulent cards during the holiday seasons). Federal Statute 15 U.S.C. 1644 provides penalties of up to $10,000 and/or up to ten years in prison for using counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained cards.
For campus units that accept cards on campus, you can spot fraudulent cards by verifying the last for digits on the cards receipt to the actual card – if they don’t match, this could indicate an issue. Schemes that exploit lost or stolen cards include fraudulent advance payments or over payments, shave and paste, de-emboss/re-emboss, counterfeit cards, etc. Since these examples mostly relate to acceptance of payment cards – how can departments spot potential fraudulent use of their P-Card? Look for larger-than normal orders, unusual items purchased, vendors that are not often or ever used, orders that are made up of big-ticket items, rushed or overnight shipping, shipped items to international addresses, penny or dollar purchases, items shipped to addresses not recognized or known, missing or copied/altered business transaction support, increased spending, etc.
How are P-Cards compromised? Weak safeguards and controls: not securing the card, not reconciling the card in a timely manner, not collecting business transaction support in a timely manner, giving out card information over the phone, keeping the card out in the open, writing down the card number and/or posting it on a post-it-note, allowing others to use the card, and not reporting lost or stolen cards in a timely manner. In addition, failure to monitor the cards appropriately by reviewing purchases in-depth and discussing them with staff, asking questions, and conducting appropriate departmental reviews can lead to P-Card misuse.
So, during the upcoming holiday season, make sure to reinforce good controls with your payment card spending.