Heads Up Business Owners

I came across this article recently in the Tampa Bay Business Journal. I personally have never heard of  “force posting”. So I thought I would share this here so business owners who accept cards could be aware of it.

If you are interested in reading the full article you can read it here.

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The criminal provided fake bank authorization codes to Apple and other merchants which allowed him to override denials of closed bank cards and debit cards when he made purchases, according to court documents. He used the scheme in 42 different transactions, resulting in a fraud loss to Apple alone of $309,768.

Typically, a store will swipe a buyer’s bank card or debit card at a point-of-sale terminal, generating a bank authorization code that signals the vendor the account is active, funds are available and the vendor can accept payment. If the financial institution determines the swiped card is associated with a closed account or there are not enough funds available, no code is generated and the merchant receives a declination.

The scammer had at least three Chase debit cards and one SunTrust debit card — all associated with closed accounts — that he used to buy expensive electronics, to rent cars and to stay at hotels. When the canceled debit cards were declined by a merchant, he pretended to call the financial institution and obtain a code, and instructed the cashier to manually enter the code — a practice called “force posting.”

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Once again creative criminal minds find a way to rob people. Business owners who accept credit/debit cards should be aware of this and probably stay away from any transaction that is not electronically approved by the financial institution.

 

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