PSA: Be Wary of Repair Shop Fraud

We can all agree that modern technology is pretty awesome. We can stream a bazillion shows and movies. Pay for stuff immediately and invisibly. And hey, the ability to take our favorite music with us everywhere we go is pretty darn sweet.

Unfortunately, with great technology comes a great many ways to do unfortunate things with it. Like commit fraud.

Yes, friends, fraud is still around. It never really left; it just got a haircut and a new jacket and now it’s winding its way through digital avenues. And it’s right here in the diesel repair industry. That’s why we’re deviating from our usual semi-amusing romps through #repairshoplife—to bring you this important PSA and help you identify fraud if it shows up at your shop.

FRAUD IN THE DIESEL REPAIR INDUSTRY

Picture this: An order comes in over the phone for an absolute boatload of parts. “I need a dozen tires,” the potential customer says. The final invoice is something like five times the size of your shop’s average ticket.

Oh, man, you could do a lot with that money.

The customer is new. They’re in New York, and you’re in Iowa. They’ll send a driver to pick the tires up. They offer up a credit card number.

The customer’s acquaintance shows up, collects the tires, and leaves.

The money reaches your shop’s account. Cool!

The customer calls again. “I need another dozen tires,” they say. Same situation as before: they’ll send their driver to get them. Maybe they use the same card, maybe they offer up a different one, but hey, they’ve already paid you once, right? You’re in the clear.

The second order of tires sails away.

And then…the chargebacks begin.

“That’s not me,” the cardholder tells their company. “I’m not in Iowa! I didn’t initiate this transaction or the one before it!”

“Oh snap,” their credit card company says. “We’re on it!”

The cardholder has protections you, the shop owner, do not. Suddenly the money the cardholder paid for the tires is gone. The tires themselves are long gone.

And you are in a world of hurt.

The above is a general outline of how this fraud has unrolled across the repair field in recent weeks and months. Mary Croy, Fullbay’s Head of Payment Strategy, has been tracking the trend since it first began cropping up.

She describes a crime that does not seem to be confined to any particular region, nor any particular software or payment system. The victims she’s talked to have lost a combined $370,000 already—and this fraud shows no signs of abating.

In all cases, the Mary told us that the following occurred:

1. The orders have always been large and always been components. Five of the eight instances investigated have been tires; the remaining three were other parts.
2. The “customer” was brand-new to the business.
3. The “customer” wanted to pay with a credit card or ACH.
4. The “customer” wanted to send someone else to pick up the components.
5. On some occasions, the “customer” ordered batches of parts. Payment was received in good order for the first batch, possibly lulling the shop into a false sense of security.
6. The “customer” issues a chargeback (or chargebacks, in the case of multiple batches), stating they did not place those orders.
7. The chargeback works out in the cardholder’s favor.
8. The shop is left hurting. Really, really hurting.

WHY IS THIS HAPPENING?

Fraud has been a problem since…well, since we as a species first started messing around with money. To be honest, it was probably an issue before then, with an early farmer promising a fat chicken and then delivering a…not-fat chicken.

Diesel repair shops are possibly more likely to be targeted by this kind of scam because giant orders are not unheard of, Mary tells us. Shops can and do get big tickets, which makes an order as described above not seem as unusual to them as something like this happening to a grocery store. Sadly, when a scam like this is successful, it proliferates.

HOW TO PROTECT YOUR REPAIR SHOP FROM SCAMS

The biggest thing to remember is that if an order seems too good to be true, it probably is. How often do you get a huge ticket for a boatload of parts from a brand-new customer? It’s exactly that rarity that makes it so alluring—and look, almost everyone could use a few extra dollars here and there.

But scammers are counting on you being so blinded by that allure that you don’t look into things further.

Don’t be that shop owner.

“If the person holding the account information is not the person picking up, that is a huge red flag,” Mary warns.

If you don’t know the customer, do not take their credit card number over the phone. That credit card could be stolen. Instead, email (or fax, if you’re old-school) them a document for them to provide their credit card number. Instruct them to sign the document, and also provide a picture of themselves holding up their identification (like their driver’s license). On that same document, they’ll state that they are authorizing someone else to pick up the order. Again, you need pictures of the cardholder holding up their ID in the same email that authorizes the purchase and the individual picking up the purchase.

Later, when their colleague arrives to pick up the parts, you must also take a picture of their driver’s license and have them sign the document, too, indicating there’s been a handoff.

Following the aforementioned process will help you win a chargeback case.

In addition, Mary advises against letting brand-new customers pay for large orders through the Fullbay Customer Portal, as you will find it more difficult to enforce having the documentation signed correctly and obtaining the picture of them with their identification. Finally, be wary about letting a new customer pay with ACH—the way that ACH functions, it can take a certain period of time for the funds to hit your bank account. If someone nefarious is trying to scam you, they can have the funds in the account for the quick check at time of payment, and then move the funds out of the account before they reach you.

ACH is an amazing way to accept payments – but only for those customers you already know aren’t trying to pull a fast one on you.

Mary offered some additional tips to vet new customers:

• Is their information consistent? Someone that keeps changing their story—whether it’s a small detail or a large one—is possibly trying to pull one over on you.
• What do their profiles say? If buyer profiles are available, look through them. Is the profile filled out or incomplete? The latter could indicate the person is a scammer.
• What do their reviews say? Does the potential customer have a website or a Google Business site or a social media presence? Log on and see what people are saying about them—whether they’re positive, negative, or nonexistent. Heaps of negative feedback can mean you don’t want to work with this person anyway.
• How are they communicating? Is this potential customer in a rush? Does their language border on aggressive at times? Are they weaving urgency into everything they ask for? It may be a scammer.

PROTECT YOUR SHOP

If you’re a Fullbay customer, then you already know Fullbay Payments has excellent safeguards in place to protect you. But in the end, a huge part of avoiding scams falls on you and your employees.

In short, stay vigilant. And remember: “If it seems too good to be true, trust your gut—it is,” Mary says. “Don’t do it.”