By Sandra Guile
Better Business Bureau
The slow roll out of the chip embedded credit/debit cards is providing an opportunity for scammers to slide in with a slamming scam.
The term slamming refers to a deceptive sales practice intended to switch a business’ service provider without the retailer’s consent or knowledge. Typically, the scammer poses as the retailer’s credit card processing agent. Since it is difficult to access the name of the business owner’s actual processing service provider, the scam artist will refer to themselves as a representative from the processing company, the bank, or Europay, MasterCard and Visa.
The scammers will first contact the retailer – usually by phone – claiming the credit card terminals are noncompliant because recent upgrades allowing customers to use chip embedded credit/debit cards in the terminals are incompatible with a new feature the alleged agent is providing.
The fraudster explains the situation can easily be remedied by reprogramming the terminal at no charge. What really happens, if they do go in and reprogram it, is that the financial transactions will be redirected through the scammer instead of the retailer’s actual processing agent. This leads to a double billing and a breach-of-contract situation for the merchant. In general, this is bad news for the retailer and may result in fees and major consequences.
Avoiding a slamming scam might seem like a matter of common sense. However, when dealing with an unknown entity over the phone, sometimes it’s difficult not to fall prey to a high-pressure sales pitch or coercion by the caller for personal information.
For starters, if you suspect your business is being slammed by a con, try verifying the caller. If the caller insists they’re with your processing company or anyone related to your credit/debit card terminal, treat it like you would an unexpected call about lowering interest rates on your personal loans; hang up and find the contact number for your credit/debit card terminal provider.
If you’re being pushed to change a processing service over the phone, sign a contract, or schedule an in-office visit to reprogram the terminals, you have the right to say no.
Currently, the credit card processing industry is not closely regulated as a whole. However, according to the Federal Trade Commission, several agencies are cracking down on companies misrepresenting themselves both over the phone and in their documentation. Now that the agencies are paying closer attention, they would appreciate hearing from businesses who may be getting slammed.
Share what you know by contacting your State Attorney General and report the activity to BBB’s Scam Tracker.
Sandra Guile is the Community Outreach Specialist for BBB. She promotes BBB’s message of marketplace ethics through public speaking engagements, presentations, media relations, press releases, web content, and other written materials.
Tune in Tuesdays at 10:30 a.m. with Scott Sloan on 700WLW for The Scam of the Week and every third Thursday with Brian Thomas on 55KRC. Contact Sandra at (513) 639-9126 or sguile@cincinnati.bbb.org. Your BBB is located at 1 East 4th Street Suite 600 Cincinnati, Ohio 45202 – to reach the office, call (513) 421-3015.
