The switch to EMV chip cards has been a mess for many businesses. The need to purchase new equipment, long delays in certification, customer confusion over using the chip cards, and retraining staff on accepting cards are a few of the problems.
As often happens when there’s confusion, scammers and unethical companies are taking advantage of the confusion. Here are some of the chip card scams you may run into.
- The “You Overpaid” Pitch
- The Free Equipment Pitch
- “This is Visa/MasterCard”
- Merchant Services Call
- EMV Compliance Invoice
- Physical Card Tampering
- The Facts About EMV
Chip Card Scams
Unfortunately, chip card scams are not uncommon. They include phone scams, invoice scams, and even tampering with physical chip cards. Here are some EMV scams that you may run across.
The “You Overpaid” Pitch
We first heard about this from one of the processors that places quotes through CardFellow. In this case, alleged merchant companies call a business and say that they see the business isn’t EMV certified. The caller tells the business that they have been charged excess fees (like an “unsecure transaction fee”) and that they can receive a refund by sending a statement to the caller.
Once you send a statement, they may try to sign you up for different processing, add you to a sales list, or otherwise use your information for their benefit. What you won’t get is a refund; that’s just their ploy to get your statement.
What to do: Don’t send your statement, and hang up the phone. If you need assistance with your EMV equipment or have questions on your pricing, call your processor directly. Don’t assume that a company calling you is your current processor. If you’re a CardFellow client, you can also give us a call with any questions.
The “Free Equipment” Pitch
To be clear, processors offering free equipment isn’t limited to the chip card switchover. It’s just that the chip switch made it a more tempting offer, since businesses that didn’t have chip card machines would otherwise need to purchase them in order to become EMV compliant.
But nothing is free, and the offer of a “free chip card machine” usually comes with a hefty price tag elsewhere.
In this particular situation, processors may call and tell you that you must become EMV compliant, and that they’ll offer you an EMV compliant machine if you switch your processing to them. They’ll probably also say that switching will save you money, which is exactly how a CardFellow client was lured away, only to return when he realized his new processing was more expensive.
What to do: Tell the caller you don’t need new equipment. Note, if you actually do need new equipment, your best bet is to contact your processor or use a tool like CardFellow’s product directory to find a machine that will work for your needs. Companies that cold call offering free equipment are not likely to be a cost effective solution for your business.
“This is Visa/MasterCard”
A number of business owners have experienced this one. A processing rep calls, claiming to be from Visa or MasterCard. They say that they want to check what you’re being charged by your processor. They may make it sound like a quality check, ensuring that you aren’t being overcharged. They’ll usually request statements, and once those are sent, expect their pitch on saving you money.
What to do: Hang up, and don’t send statements. It’s unusual for Visa or MasterCard to call your business, but if you think the call might be legitimate, get the person’s name and call Visa or MasterCard directly yourself.
Merchant Services Call
Another tactic is a call from “merchant services” that includes truthful information mixed in with not disclosing other details. We’ve received this call here at CardFellow, and have included the audio and a transcription below:
This is an automated call about your merchant account from merchant services partners to remind you that the deadline for EMV updates has now passed. Because you have already been notified, please be advised that the fraud liability has now shifted to you, the merchant. If you haven’t made the necessary equipment changes, please call us at [number] to avoid high out of pocket equipment costs and an increase in rates charged per card.
This call includes some factual details. The deadline for a liability shift has actually passed – it was October 2015. However, there’s no reason that “rates charged per card” would go up as a result of not using EMV equipment. The comments about high out of pocket equipment costs and an increase in rates are scare tactics to get you to call back. When you do, you’ll be hit with a sales pitch at best, or a sneaky attempt to get you to switch processors by requesting that you send in new paperwork or an application for EMV processing.
What to do: Don’t call back. This is most often an automated voicemail sent to as many businesses as possible and its success depends on business owners getting scared by the vague threat of higher costs. If you aren’t currently using EMV-capable equipment and want to make the shift, contact your processor yourself to see what models they can support.
EMV Compliance Invoice
The EMV Compliance invoice scam is not a phone call, but an invoice. We have been alerted to this tactic by several doctors’ offices, so for the time being it seems that it targets practices in the medical industry.
A company called EMV Compliance or EMV Chip Services will send an invoice, typically in the amount of $139.50. The company is not affiliated with your current merchant service provider, but sends the invoice in the hopes that you will pay it thinking that you need to send the money to become or stay EMV compliant.
What to do: Before paying any unexpected invoice, be sure to confirm its authenticity. If you receive an invoice for EMV compliance services, contact your credit card processing company. On the other hand, if you’ve received a legitimate invoice, your processor will be able to confirm it with you. Lastly, if you’re a CardFellow client, please call or email us for assistance.
Physical Card Tampering
In April 2018, security news website Krebs on Security published details of a chip card scam that involves physically tampered cards. According to the United States Secret Service, scammers intercept chip cards in the mail, physically remove the EMV chip, and replace it with the chip from an old card. The thief then puts the new chip in a card in their possession. When the business activates their new card, it won’t work because of the old chip. However, the card the thief has – with the new chip – does work, allowing the scammer to drain funds from the business’ account.
The Secret Service indicates that so far, chip card tampering of this nature primarily targets large corporations. However, it’s good to be diligent and ensure that you’re regularly monitoring accounts, including your business accounts, for signs of fraud or unauthorized use.
The Facts About EMV
It’s easy to fall victim to a scam or to a deceptive sales pitch when the topic is confusing. Here are a few facts about EMV, so you won’t find yourself in that situation:
- EMV machines are not required
It’s strongly recommended that you upgrade to an EMV capable machine, but there is no current requirement to do so. However, if you don’t use an EMV capable machine, you’ll be liable for fraudulent transactions and associated costs. Additionally, some processors have started charging EMV non-enabled fees, so it can cost you in more ways than one.
- EMV machines do not mean lower rates
There are currently no differences in interchange for chip cards vs. traditional magnetic stripe cards.
Are we missing any EMV scams or misleading sales pitches in this list? Let us know in the comments!