As the payment credit card processor to hundreds of limo operators nationwide, we want to inform you of a major fraudulent scam going around the industry that is negatively affecting operators.
Scammers are booking trips and giving a credit card for payment, but the credit card declines. When operators reach out to inform the potential passenger of their declined card, the passenger tells the operator that he will call them back as there should be nothing wrong with the card so he is going to call his bank. Then the passenger/scammer calls the operator back and says the bank gave him an authorization code to use and for the operator to plug this into their system and they will get an approval. This passes as very professional and doesn’t seem like a big deal. The operators take the authorization code, plug it into the reservation system, or payment gateway, and receive an approval code as an “offline sale.” An offline sale means that the actual sale was never authorized or approved through the card issuing the bank. Operators may not think there’s any cause for concern because they get an approval and money goes into their account from the transaction. But when the card-issuing bank finds out about the charge, they dispute it because it’s not legitimate as they never provided the actual authorization code. By now, the operator has done several trips, paid the chauffeurs and all costs associated with it, and suddenly the money is yanked out of their bank. There’s nothing operators can do about this chargeback because the authorization code used was bogus.
This has cost operators that process with Chosen Payments more than $35,000 in the recent months. In the research on behalf of our clients, we found that one particular scammer has cost merchants $300,000 in recent months and we have a list of merchants that are affected as well as a variety of information provided by the scammer. This scammer usually gets picked up and dropped off at high-end places and will use the operator for several trips in a period of a few weeks. It’s not just limo operators that are being affected as many hotels and restaurants are as well. In one case, Tom Soliman of Allstarz Limousine in Orange County CA (a Chosen Payments clients and active GCLA member) was scammed for close to $15,000. According to Tom during one trip with this scammer an Allstarz Limo chauffeur took the passenger to a car dealership in Orange County. The scammer literally bought two brand new cars from the dealership and when asked by the chauffeur how he did this he said that he paid on his credit card and that he no longer needed the chauffeur. This fraudster has been going by the name of Charlie Barbero and the credit card being used is a Wells Fargo card.
Tom Soliman of Allstarz Limousine has volunteered to speak to anyone who wants more info on this. Tom can be reached at 714-239-1115. As a major advocate for our industry and one whom hates to see bad things happen to good people I encourage that, as an industry, we stand together on this issue by sharing the details and further educating you in an effort to inform, prevent and protect you from being a victim of these known scams. Additionally if anyone has input or an idea on how to assist Tom, I am confident the feedback would be greatly appreciated.
Here are steps to avoid this:
- MAKE SURE YOU NEVER TAKE AN AUTHORIZATION CODE FROM ANYONE EXCEPT YOUR CREDIT CARD PROCESSOR OR THE CARD-ISSUING BANK.
- Never run an offline sale in this scenario.
- Know your client and if it seems shady don’t do the trip.
- Check ID and match it to the credit card.
- Request a cc auth form and copy of ID prior to the trip.
- If you’re doing business with a new client, get them to show your driver their ID and have them sign a trip ticket and sales slip while comparing the signature to their driver’s license.
As the preferred payments credit card processor to the limo industry, we at Chosen Payments pride ourselves on educating the industry. If you have further questions or concerns, please feel free to get in touch with us. Whether you’re a client or not, we will offer free consulting and advice to all operators whom reach out. Forthcoming we will be writing an educational article in which will provide greater detail on how to avoid being scammed in this regard.
If anyone has been affected please share your experience with us so we can build upon our findings to keep the industry informed and safe! Additionally please share this info with your peers and affiliates. For more info contact Jeff Brodsly, CEO of Chosen Payments (805) 910-1445, email@example.com.
With Much Respect,
President & CEO