What is really happening?:

· Thieves are stealing identities off of the Internet or learning the algorithms of the credit card numbers and submitting orders under a false identity. (Special note: You need to protect your credit card information as identities are being posted on the Web in different countries for all to see - free access to your entire identity- imagine the possibilities)

· Order is being shipped to a Mail Boxes, Etc. or a postal service center.

· A third-party international shipping company (or person being paid on the side) is picking up the package from the postal service center and shipping the equipment internationally.

· Many times the postal service center and the shipping company are paid for their services utilizing fraudulent credit cards.

How can we protect ourselves?:

· First and foremost, if at all possible get the customer to sign the charge. This is the first question you merchant account is going to ask. If you don't have anything signed by the customer you may be charged back for the entire amount. Having a signature increases your protection dramatically.

· Always verify the credit card before every shipment.

· Only ship orders to the bill to address and confirm the address with an AVS service when getting the credit card authorization. AVS service will tell you if the billing address the customer gave and the customer's billing address on the credit card company's records match. Therefore, if the dealer/manufacturer ships to the bill to address the dealer is protected. Or, if you can't do that, require that a faxed copy of the order to be signed by the customer. Simply fax over a copy of the order for the customer to sign confirming the order. Although this is not as strong as having the customer sign the actual credit card receipt it will typically suffice.

If you have already been hit by fraud:

· Contact the Secret Service, due to the fact that this scam includes credit card and usually involves international activity jurisdiction typically falls to the Secret Service. In fact, we have a contact name for you at the Secret Service. Call Tim Benitos at 212-637-5425.

· Get a police report.

· Contact your insurance company to see if they can cover the equipment under your theft policy.

What you need to know:

· Fraud is a major issue with Internet and catalog orders and you are liable for all charges that are fraudulent if you do not have something in writing.

· The A/V Industry is a major temptation due to the market growth, value of the models and desirability worldwide.

· Fraud is a common occurrence in technology product markets.

· Educate your order processing and accounting departments about the signs of fraud by implementing effective systems to flag potential fraud, which will help eliminate almost all credit card fraud.

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Gary Kayye is Chief Visionary of Kayye Consulting - a firm that specializes in providing marketing consulting and training development to the professional audiovisual industry. He spent 12 years at Extron and AMX as VP of Sales and Marketing before founding his own firm. He can be reached at www.kayye.com or via e-mail at gkayye@kayye.com.

 

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