Peterborough contracting supply store scammed out of $200K

Peterborough police say a local business has lost more than $200,000 in a phone credit card scam.

Between mid-October and mid-November, police say two unknown men placed orders for home renovation supplies from a contracting supply store totalling approximately $202,000. During each transaction, an employee processed credit card information over the phone and the next day someone picked up the supplies.

The store owners recently contacted police to report being the victim of a card-not-present scam: the cardholder was not physically present and the scammer either provided stolen or fake credit card information.

“Merchants need to use extreme caution when conducting credit card transactions over the phone,” stated Det. Const. Keith Calderwood of the police service’s fraud unit.

“This is a very dangerous way of conducting sales that makes the merchant extremely vulnerable to fraud. Merchants also need to be fully aware that credit card companies will not reimburse businesses for lost revenue as a result of a card-not-present scam.”

Calderwood cautions businesses that phone transactions should only be done with customers they are familiar with or have done prior business.

“New customers need to physically come into the store and show either the actual credit card or a copy of the credit card before the business releases any goods or products,” he said. “This will help ensure the person’s identity and the credit card information.

“Develop a best practice for your business and speak with your payment processor company about the risks and responsibilities.”

The incident remains under investigation.

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