In July 2020, police received a report from a local medical supply company that had lost thousands of dollars of supplies to a fraudster. The company was reportedly contacted by an individual looking to order a large quantity of medical supplies, specifically gloves, masks and sanitizer. The individual, who was allegedly pressuring the company for a fast shipment, provided a credit card number for payment and when the number did not work, promised to set up an electronic funds transfer (EFT). The company then reportedly filled the order and shipped it to eastern Canada before realizing the EFT had not been sent as promised.
Since July, the EPS has received four similar fraud reports and has prevented the shipment of orders from two other companies. In each instance, the suspect reportedly calls or places an order online for a large quantity of medical supplies and offers to pay with a credit card or an EFT. The order is then shipped before the company realizes the payment has not come through. In some cases, the suspect offers multiple credit card numbers until one is accepted, claiming that they are having issues with their bank or their credit card limits. To date, all of the fraudulently purchased supplies have reportedly been shipped to eastern Canada. Officers continue to investigate if the frauds are linked.
“We believe the fraudsters obtained the credit card numbers through skimming devices or e-mail phishing scams,” says Const. Brian Mason with the EPS Police Electronic Response Team.
“When these numbers are provided, the supplier often receives a ‘declined’ transaction message, prompting the suspect to continue providing numbers until one finally works or offer another mode of payment, such as an EFT, neither of which will result in payment.”
Between July and November of this year, individual business losses have ranged from a few thousand to tens of thousand of dollars. To date, more than $60,000 worth of supplies has been lost to fraudulent purchases and more than $19,000 worth of orders have been intercepted and recovered by police prior to shipment. Investigators believe the supplies are being resold online.
“Unfortunately, these types of transaction frauds are often not covered by insurance, leaving the businesses to cover any losses,” says Mason.
“We are hopeful that bringing this fraud to the attention of the business community will prevent further losses.”
As the pandemic continues and demand for these supplies remains high, investigators anticipate these frauds will continue and have developed some tips to help business recognize and prevent them.
- Question the transaction. If you receive a “declined” transaction, ask for an image of the credit card and government issued ID that matches the name on the card. Know that a signed credit card authorization form is not a method of confirming someone's identity.
- Offer other payment options. Consider electronic payment options such as PayPal, e-transfer or an EFT between banks, all of which require additional authentication.
- Confirm payment receipt prior to shipping. Always confirm that any form of electronic payment has been received prior to shipping your product.
- Research your buyer and shipping location. For large transactions, conduct some quick research on the company name, the individual’s name and the company contact number. Contact the alleged company (using a phone number that you independently researched) to verify an individual’s employment and purchasing authority. Do not use the contact information provided by the purchaser. Verify the address provided by the company or purchaser and compare it to the shipping invoice and label to make sure they match.
Any businesses that believe they may have been scammed in this way are encouraged to contact the police to file a report. The EPS can be contacted at 780-423-4567or #377 from a mobile phone. Anyone with information or tips about this scam is also encouraged to contact police or submit their information anonymously via Crime Stoppers at 1-800-222-8477 or online at www.p3tips.com/250.