- WHITE PAPERS
Credit card skimming in the restaurant industry is becoming more exposed as high-dollar theft cases are being made against restaurant workers. Recently in the Minneapolis – St. Paul area, seven employees were charged with stealing customer credit card information from those they served in the restaurant.
When handling customer credit cards the workers also swiped the card through a portable electronic device commonly known as a “skimmer.” The skimmer captured the customer information contained on the magnetic stripe on the back of the card. The information can then be sold or transferred to organized rings that produce counterfeit cards and rack up fraudulent charges.
In this case, the group allegedly used the customers’ stolen information to fraudulently purchase at least $150,000 in goods and services in just five months. Last year, “skimming fraud” cost the restaurant industry more than $200 million and the trend is rising - rapidly!
It presents a very real problem for the restaurant owner and retailer. Trusted employees perpetrate this crime against their customers. The customer does not know their credit card information has been compromised until they get their monthly credit card statement. By the time credit card companies and the retailers and restaurants are notified that there may be a problem, large amounts of fraudulent purchases have been made. As in most cases, many customers’ cards have been compromised in one location and the crime can easily amount to six figures, as outlined in this one.
The outrage from customers that have had their identities stolen does not bode well for the manager or the owner of the business who failed to protect them from the crimes committed by their employee(s) and fail to appropriately respond after it happens. The brand image can be damaged, sometimes irrevocably.
Retail and restaurant management training on the skimming fraud scheme is essential in slowing this crime trend. Credit card processers usually have skimming and other credit, debit and gift card fraud-prevention training available to their clients.
The retail or restaurant manager or owner must be aware of the crime, and put the mechanisms in place to properly screen employees, recognize the “red flags” of potential credit card skimming and other warning signs of fraud, and take the appropriate actions. It’s a crime of opportunity that can be prevented through education, training and proper supervision.
Contact your credit processer today for more information on this crime.