Small Business and Credit Card Companies Target of Scams

Credit card fraud comes in many different forms. For a group of business executives it came in the form of a complicated conspiracy. A recent small business scam in Houston, Texas involved three so called executives using credit cards to pay for phoney transactions, then filtered the payments to various accounts.

This particular conspiracy made victims out of a number of sources – unsuspecting consumers, credit card companies and banks. It started as the pair of them opening credit cards in other people’s names.  The credit card was then used to make illegal purchases. They then shared the credit card information with a third conspirator who completed paperwork for phoney tractor-trailer purchases. The company would be paid by the credit card company, which then would be funnelled into their own accounts through wire transfers. To keep the scam rolling, they actually made a couple payments to the cards to keep them active.

Once the checks for the fake transactions were received, they would then wire transfer to one of the conspirators’ mothers. She would then give the money to her son. This wire would account for approximately 83-93% of the check amount received.

Similar to this fraud is a case out of Jacksonville, Florida. This scheme duped unsuspecting businesses into believing they were renewing a “Yellow Pages” ad when in fact they were responding to a solicitation. The conspirators in this case opened a legitimate company, using the non-trademarked “walking fingers” logo to solicit the businesses. They relied on the businesses simply paying the invoice, which many did. The fine print on their invoices indicated they were not affiliated with the Yellow pages directory.  The scam initiated company was called “United Directories and Yellow Pages United.

Although it was credit card companies and legitimate businesses that have been victims of fraud in these cases, the victims are more widespread than just the immediate targets. Too often these types of scams  end up costing the consumer too.  When credit card companies or legitimate businesses lose millions of dollars to frauds such as these, in the end those losses are being carried by you and me. Ultimately we are all victimized by these greedy individuals.  Businesses will pay a higher percentage to the credit card companies for the privilege of accepting cards. This is then transferred to the consumer in the form of higher prices of goods or services. Businesses need to make a profit in order to remain in business and if they are victims of fraudulent schemes like the ones in Houston and Jacksonville,  small businesses may consider the cost of doing business far too high.