Beware of Relay Fraud!
The Consumer Protection Unit warns Alaskan businesses of a scam involving Relay phone service and stolen or fraudulent credit card numbers. The perpetrators of this scam take advantage of the Relay phone system, an operator-assisted phone service for persons with hearing and speech impairments. Operators "relay" calls by typing what is said to the person with a disability and by reading aloud to the call's receiver. Traditionally, Relay calls were made using a telephone and a TTY machine. Now, relay phone service is available through the Internet, and there is no verification process to determine whether the caller has a legitimate purpose in using the service. Fraudsters appear to be using the service to shield their true identity.
In a typical case of Relay fraud, the fraudster uses the Relay phone system to request a large order of merchandise for out-of-state or international delivery, paid for by credit card. The business receives the order over the Relay system, accepts a credit card payment, and ships the merchandise to the delivery address. Only later does the business learn that the credit card number is fraudulent or stolen, and has lost both the payment and the delivered merchandise. In a common addition to the typical scam, the fraudster insists on using its own preferred shipping service and convinces the business to use money from the total payment to cover shipping and handling.
A business in Fairbanks recently reported its experience with Relay fraud to the Attorney General's Office. In this particular scam, the fraudster pretended to be a building contractor for a church in Africa. The supposed contractor initially contacted the business through the Relay system, following up with numerous emails designed to convince the business that the order for construction materials for delivery to Africa was legitimate. The fraudster insisted on using his preferred shipper that would only accept payment in cash through a wire transfer service. The fraudster asked the business to add a shipping fee to the payment for the merchandise and to pay the shipper from that credit card payment. Fortunately, the Fairbanks business became suspicious when it checked the credit card number and found that the address the fraudster gave for the account was invalid. The business recognized that its new customer was trying to defraud it by getting the business to wire money and ship merchandise based on a fraudulent credit card number.
The Consumer Protection Unit urges businesses to exercise caution when handling orders placed through the Relay system if the caller:
- Will not identify himself or herself or give a company name
- Is content to order whatever the business currently has in stock
- Makes no effort to negotiate a deal or question the price of expensive products
- Attempts to use multiple credit cards after the first one is declined
- Objects to verification of the credit card's information with the issuing bank
- Insists on using its own preferred shipper for delivery overseas
- Attempts to change the method of payment or delivery once the order is approved
Businesses should take the following steps to protect themselves from Relay fraud:
- Ask for the customer's full name, telephone number, and address.
- Collect complete information on the credit card:
- Credit card type
- Issuing bank and bank's customer service number
- Card holder's full name, telephone number, and address
- 16-digit credit account number
- Card Verification Code
- Expiration date
- Verify the information given on the credit card by checking with the issuing bank.
- Call the customer back using the number associated with the credit card holder's account, not another phone number.
- Use your own shipping company, especially for deliveries overseas.
Relay fraudsters may also attempt to pay with counterfeit checks. If the customer pays by check, wait until the bank certifies that the check is valid before shipping the merchandise. Be aware that banks may release funds before confirming that the check is valid. You will be responsible to the bank if you spend the funds and the check is later determined to be counterfeit.
If you feel that you have been the victim of Relay fraud or any unfair or deceptive practice, we encourage you to file a consumer complaint. To request a complaint form, contact the Consumer Protection Unit, Alaska Department of Law at (907) 269-5200 or toll free at 1-888-576-2529, or you can download a consumer complaint form.
Consumer Protection Unit