Avoid falling victim to an increasingly common card machine scam23rd September 2019
The growing threat of the distraction fraud costing business owners thousands
With fraud an increasing threat to UK businesses, criminals are finding innovative ways to commit scams, often in broad daylight. An increasingly common type of fraud we’ve recently encountered involves scammers distracting shop merchants, whilst an accomplice seizes the card machine and authorises a refund to their own bank cards before returning the machine to the shop counter; it is only later that businesses are realising that they’ve fallen victim to this crime.
On February 28th 2019, Edna’s Kitchen in Bristol was targeted by a group of men who took GBP2,500 through the card machine whilst another distracted the staff. Only days later, also in Bristol, Amit Kriplani, owner of Café Revival, claims that two men used this technique to refund themselves GBP5,400 after ordering a coffee and cake. When interviewed by the Bristol Post, Mr Kriplani said:
“One of the men was distracting staff, asking about the syrups, the teas and the cookies. In the space of two minutes, the other one had the card machine and made six £900 refunds to an account.”
This particular form of cyber crime is seemingly growing in frequency across the UK, with attacks taking place in Nottinghamshire, Edinburgh and Aberdeen in 2019. In such cases, unfortunately card machine companies are not liable – with these scams causing crippling damage to small businesses’ profits. Taking this into account, it’s vital that owners keep a close eye on any card machines – ensuring they are out of reach of the public. Another method merchants can employ to minimise the risk involved is to retain control of the machine during transactions.
But even if I take precautions, what can I do to protect my business in the event of an attack like this?
Addressing this issue, our Cyber & Financial Lines Underwriting Manager Matt Drinkwater said:
“With crime getting more sophisticated as technology develops, it’s so important for business owners to be alert and aware of the scams they could fall victim to.
“There are various preventative steps they can take. Always pay close attention when customers are paying by card, look out for signs of distraction techniques, and get peace of mind with insurance for protection if the worst happens.”
For brokers with SME clients, it’s important to educate on less obvious risks like these which could cause significant business interruption or, worse, permanent financial damage to a business if the right cyber policy is not in place.