Recognise and report signs of scam and fraud
About scams and fraud
Scams and fraud are unfortunate hazards of the digital age. When you accept a card purchase, there is always a chance that the card or card information was stolen and is now being used for fraud. The fraudster can keep racking up charges until the true cardholder notices the unusual activity and disputes the transactions with their bank.
Payment card companies hold sellers liable for fraudulent transactions. Square works hard to catch unusual activity and notify you of fraud or potential scams, but you are always your first and best line of defence.
Before you begin
If you suspect fraud, let the customer know you can’t accept the sale. Contact Square Support if you have any questions or concerns about a customer.
Recognise scam and fraud
When scammers steal someone else’s card information, they typically have one of two goals:
To obtain goods from you without paying for them.
To fraudulently obtain funds by deceiving you.
Scammers tend to follow identifiable patterns—telltale signs that you should be wary of before completing a transaction with a buyer.
Scammers will sometimes ask you to use part of a debit/credit card transaction to pay a special vendor (such as a driver, caterer or event planner) or shipping company. Often their request will instruct you to conduct an irreversible money transfer such as a wire, Western Union, money order or bank transfer. These types of requests are highly indicative of a scam.
In this case, the true cardholder would dispute the transaction with their bank and you’d be responsible for returning the full amount. To protect yourself and your business, never send part of a customer’s payment to a third-party vendor or shipping company.
If a customer avoids any in-person contact when the transaction type would normally call for it, they may be attempting to scam you. Common examples include catering, hairstyling, and photography. The customer may explain their absence by claiming to be in the hospital or hearing impaired. This approach is often used by scammers for two reasons: to hide their true identities and to gain sympathy in the hope that you’ll be more willing to accommodate unusual requests.
Many illegitimate purchases involve special requests or irregularities around the delivery of goods. These include:
- Billing and shipping postcodes that don’t match
- Insistence on rush-shipping/service (can indicate the buyer is in a hurry to complete the transaction before the stolen card information is reported)
- Large, repeat orders in a short time span
- Bulk orders of goods that can be easily resold (blank t-shirts, electronics, USB drives etc.)
- Requests that you wire funds to a shipping company recommended by the buyer
There are certain indicators that a buyer may be using a list of multiple stolen debit/credit card numbers to make fraudulent purchases, such as:
- The card is declined. A “declined” response can indicate that the scammer wasn’t aware of the card’s credit limit, or the issuing bank has flagged the transaction.
- The buyer asks you to split and/or charge an order to multiple cards. As with card declines, a fraudster may attempt to spread a transaction over several cards in case the purchase exceeds the credit limit of a single card.
While these listed signs are often associated with fraud, they do not necessarily mean a buyer is attempting a fraudulent purchase. If you suspect fraud, contact Square Support.
Respond to Square fraud notifications
To keep your account safe, Square may alert you via email or SMS of suspicious transactions.
Square offers live transaction monitoring, which allows us to spot suspicious transactions and review them. If we determine a transaction on your account is likely to be the work of scammers, we’ll alert you via email. Once you receive an alert via email, we ask that you not ship the order(s) being investigated or accept further payments from the customer in question until you hear back from us. In the meantime, we’ll look into the details of your transaction(s) and compare them with other known fraud patterns we’ve identified.
This review process is typically completed within one business day. We’ll send a second email to let you know the outcome of the review or if we need any additional information from you.
If we determine a suspicious account activity we will reach out to you via SMS notification to your registered phone number with Square. Once you receive our SMS notification you will need to contact us via phone at your earliest convenience to proceed with the account review.
Protect your business
If you suspect fraud, let the customer know you can’t accept the sale. Contact Square Support if you have any questions or concerns about a customer.
You can also follow best practices for avoiding fraud and scams:
Never wire or send money to any third-party at your customer’s request (including Western Union, MoneyGram, bank transfers, etc.)
Don’t take card payments for services that are outside what your business normally does.
Never use a third-party delivery service that you’re not familiar with. Always send your goods through a certifiable delivery company (such as StarTrack or DHL).
Avoid splitting large orders into multiple small payments.
Match the billing postcode to the payment card’s postcode. If they don’t match, ask why. The reason should make sense within the context of the order.
Ask for government identification to verify the buyer’s identity. However, never store cardholder data (such as the debit/credit card number) on any systems (on paper, online, or in an application).