SOURCE: Merchant Risk Council

March 02, 2006 14:37 ET

Merchant Advisory: Re-emerging Call Tag Scheme

NEW YORK, NY -- (MARKET WIRE) -- March 2, 2006 -- Merchants have recently reported an increase in Call Tag schemes. A Call Tag is typically issued by a merchant via their shipper (such as UPS, DHL, or FedEx) when a consumer needs to return products. This document is released to alert both retailers and consumers of this scheme.

It was recently discussed at our latest Merchant Risk Council meeting that the Call Tag scheme re-emerged this past holiday season. Several of our large merchants saw an increase in this scam.

A Call Tag is typically issued by a merchant via their shipper (such as UPS, DHL, or FedEx) when a consumer needs to return products.

The scam is as follows. A fraudster uses a stolen credit card along with a stolen identity for this scam. A fraudster has your credit card number, your name, phone number, and billing address. The fraudster then places an order at a merchant for a product with your credit card and uses your information in the order and ships the products to your home. Then the fraudster issues a Call Tag and has the order picked up and shipped to his location.

For example:

A fraudster steals the identity and credit card information of John Q. Public. He then places an order at ABC Merchant and orders a digital camera and uses John Q. Public's credit card number, name, address, and phone number. ABC Merchant does the usual fraud checking and everything matches and looks legitimate. ABC Merchant ships the goods to John Q. Public.

John Q. Public receives the goods, but is confused as to who sent the products. Shortly thereafter, usually the same day, the fraudster calls John Q. Public and says: "Hi John, I am with ABC Merchant and we accidentally shipped an order to you. We will have the shipper pick up the order tomorrow. If you could leave the product on your front porch, we would really appreciate it."

John Q. Public leaves the products on his front porch. Meanwhile, the fraudster calls a shipping company, usually a different one than originally shipped the product and issues a Call Tag. The shipping company goes to the home and picks up the goods and ships it to the fraudster.

Challenges

This scam is very difficult to prevent prior to the products being shipped because the order is completed with 100% credible information.

It is traceable, however, because the fraudster puts their address in the Call Tag and once the order turns into fraud, it is fairly easy to trace the fraudster.

Consumer Advice

If you receive products you did not order, call the merchant to verify the order. While there is no financial liability for the consumer, the charge will appear on the consumer's credit card and the consumer will eventually have to go through the hassle of fighting the charge.

By: Julie Fergerson, Co-Chair, Merchant Risk Council

About MRC

The Merchant Risk Council consists of 7,500 members who share the goal of protecting and encouraging online commerce by establishing best practices for cyber-fraud prevention. The MRC works with federal and local law enforcement agencies such as the Internet Crime Complaint Center (IC3), Federal Bureau of Investigation, Secret Service, the U.S Department of Justice, and the U.S. Postal Inspectors to help catch and prosecute cyber criminals.

To learn more about the MRC and other consumer cyber-fraud resources, go to www.merchantriskcouncil.org.

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