39 tips to preventing credit fraud

I’d meant to post an entry about credit fraud long before now. Alisa’s thread in the forum (HELP! I think I’m being scammed but I can’t figure it out) reminded me but then the whole topic derailed once she started telling war stories about past clients -one such was the client who’s garment was copyrighted by the Holy Ghost -no lie. It’s even funnier than that but I don’t dare say more in such a public space. Anyway, once the thread took a comedic turn, I forgot all over again to do a credit fraud post.

[Just to get Alisa’s credit fraud story out of the way first, she had a client who wanted product ASAP, sight unseen, didn’t care about the price and wanted to pay by credit card. The way it panned out, the customer asked her to charge over and above the product cost (to the tune of $8,000) and give them the difference in cash. As if. Of course Alisa won’t fall for that. Neither should you. Summary: you can’t cheat an honest man. ]

Back to the fraud prevention. Earlier -again in the forum- someone asked about when to process a customer’s card and the thread went a little off course in a very useful way, toward a discussion of fraud. Alan provided a useful resource, that of the Children’s Credit Coop. The CCC is a member’s only organization that monitors the payment histories of children’s wear retailers. A bit pricey (about $1,000 a year), it could be useful if you’re at that stage. By the way, joining a private membership group (which includes our forum) means one can share privileged information that in a public arena, could be considered problematic. As long as the conversation is limited to members, it’s private. Being inaccessible to the public, one is not subject to liability of slander or libel. Legally, it’s a private conversation and you can’t be sued for sharing horror stories, say with given sewing contractors of choice apparel.

Anyway (sorry I keep derailing here), I found some interesting material on the CCC site, one of which was a list of 39 tips to preventing credit fraud. While we’ve talked about some of these things before (such as the suspiciously large order or rush orders), there were some new ones. This was an interesting one I never would have thought of:

4. Be aware of shipping multiple carton COD orders with one COD tag. Frequently the customer will accept the cartons without COD labels and refuse the lead carton. The most effective procedure is to divide the COD amount by the number of cartons and use a COD label on each carton.

Do go and look over the list. Being aware of these fraud strategies can save you an endless amount of grief -particularly if you don’t have the wherewithal to subscribe to a credit checking service. Some of these things are amazing. I am always surprised at how devious some people can be.

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  1. SarahM says:

    Thanks so much for that post. The List of 39 is great to read and remember. I wish I had read it in my first few months of business!

    In my case, I had the prompt payment for small order, the day I received the check she ordered a dozen more and I delivered them and in the interim the first check BOUNCED. (Short story, I got all my money back, but only by persistance.)

    I think we are eager to please and to deliver on time and these scam artists know it and prey on it.

    I am going to print the list off and put it on a wall somewhere! I would also add, if you have a bad or weird feeling about someone, go with your gut.

  2. Brian Kroon says:

    Interesting points, with over a quarter century in the business I have seen ethics and morals in business erode greatly. We now let the credit card companies handle the risk.

    Our losses to liars and cheats got so bad we now require 50% when we accept the job and 50% when we ship. When we changed several years ago to this policy my client list dropped from 235 customers to 6. It almost cost me the business, but now several years latter we are healthy, wealthy (almost) and wise!

    Those that cannot abide by these terms are NOT adequately financed to be doing business.

  3. cdbehrle says:

    great post and Brian is exactly right- 50 down/50 COD is the only way to go. Selling to stores for years these were my only terms. And yes while it’s initially hard to say no to a sale (and even harder to get a sales reps to say no) It quickly cuts through the chafe and makes life a lot easier. The list of 39 is an excellent reminder to never, ever suspend your disbelief.

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