Stolen credit cards used to pay for loads from USA!

TransAction

TransAction

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Apr 7, 2011
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I would like to update all of you on an unfortunate experience we had last week where a receiver here in Canada used fraudulent stolen credit cards to pay us for some truckloads coming out of OH. This client called us and presented himself as Fred Hewitt from Rycone Group. He said they ship regular truckloads from the USA. The product being shipped was white folding chairs. All of the shipments where routed to 3rd party warehouses in Mississauga.

We picked up two loads on Friday with the request for Saturday delivery and found out we where paid with stolen credit cards when we received a call on Monday from the Shipper / Seller letting us know that they have just been informed that all of their goods where paid on stolen credit cards also. We called the 3rd party warehouses they shipped to and they said they where paid cash and as soon as the shipments arrived, they where picked up in unmarked cube vans with no destination information.

The client in the USA was scammed for $170,000 worth of goods and ended up costing us $4,500. I started calling the authorities yesterday starting with Metro Police who directed me to the RCMP. I called the RCMP who directed me to the Metro Police who then told me an officer would be calling me the next few days to get a report over the phone as they where very busy.

This criminal knew exactly what he was doing as the cross border situation confused the authorities here and I am being told by the shipper the local authorities there passed the buck to the FBI who have also not been very reactive.

I was also confused as to why someone would steal a truckload of white folding chairs? It is apparent to me now that this is a product that is easily liquidated and once sold, would be very difficult to find as they have no markings and all look generally the same ones you see at weddings and banquets.

This all being said, it is my hopes that non of you go through something like this so here is a breakdown of the red flags we should have noticed:

- Payer / Receiver had no website
- Voice-mail was personal and not a business name
- Credit cards supplied where two different ones
- Freight moved to two different 3rd party warehouses, the one that picked up on Friday, HAD TO deliver on Saturday

Any one of these situations would be something we might all run into regularly but now looking back if you put them all together, it does raise some eyebrows. At this point, it looks like we will have to chalk this up as another expensive learning experience and we are currently working on some new policies and procedures on scrutinizing new clients who want to pay with credit cards.

I look forward to any comments or suggestions that may help us or other members to avoid this in the future.
 
What an unfortunate situation. Worse, that CC was presented for payment so not many red flags unlikely for you and shipper.

That being said, perhaps the customs broker will be a valuable source of information. Do they not need to be POA for importers in order to pay duty on their behalf? Either way, they may be helpful in tracking down the culprit. Perhaps they can point the police in the right direction.

Keep well,
Mike
 
My thinking was sort of along the lines of Mike Jr.
Does anybody have a copy of the PARS sticker? Or would the carrier that moved the load even just be able to give you the Customs Invoice? Wondering if that sheds some light on who these people are. I don't know if Canada Customs would be too happy to learn that stolen goods crossed an international border.

I'm also wondering...wouldn't it be unusual for a shipper to accept a $170 000 payment by credit card from a stranger without verifying some basic details first?
 
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Chica & Mike Jr,

Thanks for the feedback.
I have contacted the customs broker yesterday and they also where paid by credit card. I told them I would be contacting the authorities and they told me to keep them updated and left it at that. I do have copies of the customs invoice which was prepared by the shipper / seller showing being sold to Rycone Group. I agree on how the shipper could get $170,000 racked up in credit card payments with a new customer and I did ask them that, they said that the first payment was $23,000 and the payment went through with no problems. They said that in the past, if they ran such a large payment, it was usually flagged by the CC company and an authorization phone call would be needed.

The authorities don't seem to be too concerned about the matter either. It took me hours yesterday to try to find anyone who would take interest in this and as stated, they just referred me to some clerk who took down info for the Metro fraud department and said they would call me to get a statement over the phone. This is not the first time I have been defrauded and I can unfortunately say it most likely won't be the last. Every time I have contacted the authorities, it's been the same result, just get passed around and eventually get to some fraud department who is too busy to care. Our system is awful and the white collar criminals know it. I can say that we just keep making new rules for each situation and we are mitigating the risks as we go so they are few and far between.
 
Brings me back to August 2013, where we experienced a similar situation with a local cartage move of "stacking Chairs" ex Global Furniture. The prospective client called and as per our "start-up" policy, supplied credit card payment for initial move. The freight delivered to a warehouse in Rexdale (200 Rexdale Blvd) for after-hours delivery at 19:00hrs. Freight delivered and a week later we were advised that transaction was reversed by CC company, as card was fraudulent.

Of course our exposure was minor, a couple of hundred dollars, but Global's loss was approxiamtaely $10K and the theives were never caught. We followed up with the credit card company involved, as did Global, and after reviewing their "concept" of our processing agreement; whereby, believe this or not, "... the actual card holder must be present and the signature match verified to a signed processing slip..." SURE, just like Amazon must handle a billion of so transactions a year - NOT! We opted to contact our Bank who facilitated the credit card processing agreement and, once told that they could not satisfy a PRE-APPROVED transaction, we opted to remove the processing unit immediately and now only accept EFT payments, Wire transfers and Pre-approved credit based on a completed and verified application. We have received no complaints from any prospective clients and/or existing clients for not accepting credit cards and will not return to this payment method until the credit card companies take responsibility for providing APPROVALS on stolen or fraudulent cards.
 
We have been lucky with our transactions. I am extra cautious with COD Visa charges. The card holder in most cases is the owner and his/her card is charged. If the names don't match up to the owner on the credit application...ask for a photocopy of the actual credit card. You will then see the card holder's name and if not an owner's name and/or includes the company name...usually a red flag.

With this unfortunate scenario regarding TransAction - that's quite the credit limit on that card. Who has a limit that large on a company credit card - which someone in the office had access to? I'm sure down the line - when it gets investigated properly - there is an "inside job" along there somewhere. Most company cards either stick with the owner or controller - locked up. You don't just "swipe" a credit card with a limit that high...with no one noticing it went missing....
 
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I agree with everyone on their latest comments. I too had the thoughts that this is quite the elaborate scam and takes alot of work to co-ordinate. Smuggling came to mind also but it is the shipper that got scammed and called me and the freight came from their warehouse. Also, we hired 3 separate carriers on our own accord so there is no way the trucks where loaded with something after the fact. I really do think that doing this from the USA gave the criminal more time before the credit cards where flagged as stolen and as stated earlier the authorities here don't seem to know should be taking care of this. I have still had no return call from the local authorities so today I will be trying to call the CBSA, PIP and there is apparently a OPP Anti-Racketeering division.

As per DRC's suggestion, we have added proceedures in place to request driver's license copies, front and back of the card holder and copies of the card front and back.

Thanks for everyone's help on this. Will keep you posted!
 
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I agree with TransAction. You must be extra careful with credit card transactions. We had an unfortunate experience where we had all the right information however the number where we faxed the credit card to get signed was not the cardholders actual address. And the charges were reversed. The number we were given was a grocery store and nothing matched up.

Get as much information as you can.
 
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