What would your employees do?

Washington, DC - The Business Blog reflects sources some might describe as, well, eclectic - everything from Supreme Court jurisprudence to 80s TV.  But today’s FTC post comes from a message on a neighborhood listerv in Washington, D.C.  It starts with a scam, but ends on a note that should be of interest to retailers.

According to the person who posted on the listserv, a woman in the neighborhood began to receive threatening messages from someone claiming to be "IRS Agent David Jones.”  You’ve committed fraud, he said, and your only hope to avoid arrest is to pay up immediately.  The “agent” directed the person to buy $1,500 in reloadable debit cards and call back with the numbers - “or we’ll go public.”

Terrified, the woman withdrew the money from her bank and went to the nearby location of a national drugstore chain to buy the cards the caller demanded.  But in the middle of what anyone would describe as a “terrible, horrible, no good, very bad day,” the woman caught a lucky break.  The salesclerk observed her discomfort, asked a few discerning questions, and explained that she wasn’t going to sell her the cards under those circumstances.  The woman then went to another bank, where staffers trusted their instincts and contacted the police. The person who posted the story on the listserv praised the store clerk, the bank employees, and the police for taking steps to stop the scam.

The FTC has warned consumers about scams using prepaid debit cards, wire transfers, or other forms of payment favored by fraudsters.  Other variations include threatening calls from “immigration officials” or “family emergency” fraud where a con artist impersonates a relative in desperate need of bail money or cash for medical treatment.  We hope you’ll warn family and friends about those frauds, but our message today is for businesses.

The real hero of this story is the store clerk.  She could have just rung up the transaction without giving the customer’s distraught state a second thought, but clearly she had heard about the use of prepaid debit cards to perpetrate fraud.  So instead, she asked a few gentle questions to coax out the story, saved the customer from falling victim to a con, and stopped a fraudster in his tracks.  The bank staffers, too, spotted the scam and wisely called in the police.

What can retailers take from this story?

1.  Educate your staff to the tip-offs of rip-offs.  Of course, alternate payment methods offer consumers a convenient way to transact lawful business.  But when faced with obvious signs of fraud, legitimare retailers want no part of it.  If you sell prepaid cards or facilitate wire transfers at your business, alert your sales clerks to common forms of fraud.  Sign up for FTC scam alerts and post them in the break room.  In addition, talk to your sales staff.  Experience sharpens intuition.  Chances are your seasoned employees have tips they can share with newer members of your team about the telltale signs of fraud.

2.  Encourage your employees to keep their eyes open.  No one wants to be in the business of turning down business.  But if an observant salesclerk senses something is amiss, let them know it's OK to bring in a manager or ask a friendly question of two.  In the long run, it makes good business sense.  In this case, the clerk's quick thinking saved the woman $1,500.  But chances are it also won her employer the loyalty of neighbors who read the story on the listserv – which, by the way, named the employee, gave the address of the store, and suggested that readers contact the company's national headquarters to praise the above-and-beyond customer service.  That’s good publicity you just can’t buy.

Check out other scams where perpetrators exploit alternative payment methods and watch this video from the FTC.

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