HOW IT ALL HAPPENED…
This all began in late-September when a new client named Lane Adams reached out to us from Sweden via email, and placed a large wholesale order. We were asked to include shipping in the invoice, and it was also requested that we use JAC Logistics as it was better for shipping to Sweden. We processed the payment via credit card (with Square Merchant Services), went to our bank (Wells Fargo), and deposited the shipping cost into the customer’s bank account, also a Wells Fargo account which my banker confirmed as legit. Weeks went by and as the first order was ready to ship, Mr. Adams placed a second order, and then did the same with a third order, having us hold on to all the orders so that JAC Logistics could pick them up all at once.
After we charged their credit card and deposited the shipping cost into their bank account for the third order, I received an email from Square Merchant Services saying that the charges I was making from Mr. Adams were fraudulent. He had used stolen credit cards to place the orders and had then taken the "shipping" money that we deposited into his bank accounts.
I was devastated to learn that we have to pay back the cost of the orders. We are in a predicament as we already used the money to fulfill the massive orders that had been placed, and additionally, the money that we transferred into Mr. Adam’s account for shipping likely cannot be salvaged. We are left with a lot of product and a massive bill to pay, with money we no longer have. We are grateful for any kindness you can show us, and if you are able to donate, we hope you will enjoy some of our recycled record products as a thank you.
EDUCATION ON FRAUD…
Did you know that someone can steal money from you, even if you don't have any to steal? Mr. Adams seemed like a normal wholesaler, and we communicated via hundreds of emails and phone calls. I have been charging credit cards for 10 years and have become immune to how easy it now is to charge credit cards, without realizing the risks of fraud.
When a scammer uses stolen credit cards, the merchant is the one responsible for paying the money back, not the scammer, and the business is left to deal with a big mess.
TIPS/REMINDERS TO AVOID FRAUD…
1) Small business owners are the #1 target as we are eager to get new accounts.
2) Credit card systems make it easy to charge credit cards, whereas in the past you needed more info.
3) Even though times are changing, make sure you ask for proper ID and a copy of the credit card when you run cards for wholesale orders.
4) Never think it couldn't happen to you because scammers run sophisticated operations and can take money even from those who don't have any.
5) Never use shipping services other than USPS, UPS, FedEx, or DHL.
6) Never cover shipping charges for clients.
7) Never wire transfer funds into another bank account.
8) Use debit cards to pay for things, as you can dispute charges directly with Visa or MasterCard, and there is no real way to dispute with a bank other than loss prevention. Banks are not set up for this type of fraud.
9) When you're a small business and a victim of fraud, it is your responsibility to pay the charges back, even if you can’t afford to.
10) If something seems too good to be true, it just might be. Be careful!
Every donation comes with an Anti-Fraud Wall Art Piece.
Here are images of the products you will receive. Every donation gift already includes shipping within the USA.
- Jonathan Thaler
- Jenny Moore
- Rob Rowe
- Giraffe Trees
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