Business Owners: Beware of EMV Chip Card Scams and Misleading Sales Tactics
The transition to EMV chip cards has been challenging for many businesses, with issues ranging from the need for new equipment to delays in certification and confusion among customers. Unfortunately, such confusion often attracts scammers and unethical companies. Here are some common chip card scams you might encounter, even if you’ve already upgraded your systems.
Common Chip Card Scams
- The “You Overpaid” Pitch
- The Free Equipment Offer
- “This is Visa/MasterCard” Calls
- Merchant Services Calls
- EMV Compliance Invoices
- Physical Card Tampering
The “You Overpaid” Pitch
Scammers posing as merchant service companies may call and claim that your business isn’t EMV certified and that you’ve been charged excess fees, such as “unsecure transaction fees.” They’ll offer to refund these fees if you send them your statements. However, this is just a tactic to obtain your information, and you won’t receive a refund.
What to do: Do not send your statement and hang up. If you have questions about your EMV equipment or pricing, contact your processor directly. If you’re a CardFellow client, feel free to reach out for assistance.
The Free Equipment Offer
While some processors promote “free” equipment, this often comes with hidden costs. With the EMV transition, many businesses need new machines, making this offer seem attractive. However, switching processing providers to get a “free” EMV machine may ultimately result in higher fees, as experienced by a CardFellow client who switched only to return when they realized their costs had increased.
What to do: If you don’t need new equipment, inform the caller. If you do need a new machine, consult your current processor or use a resource like CardFellow’s product directory.
“This is Visa/MasterCard” Calls
Some scammers will call, claiming to be from Visa or MasterCard, stating they want to review your processing fees to ensure you’re not being overcharged. They’ll typically ask for your statements, leading to a sales pitch.
What to do: Hang up without sending any statements. It’s rare for Visa or MasterCard to contact businesses directly. If you think the call may be legitimate, ask for the caller’s name and verify by calling Visa or MasterCard yourself.
Merchant Services Calls
You might receive an automated call from “merchant services” with a mix of truthful and misleading information. For instance, they might mention that the deadline for EMV updates has passed and warn you about potential increased costs. This is often a scare tactic to prompt you to return the call, where you’ll likely face a sales pitch.
What to do: Don’t return the call. If you want to upgrade your equipment, contact your processor directly to discuss options.
EMV Compliance Invoices
Scammers may send you invoices for EMV compliance services, typically around $139.50, from companies that are not affiliated with your merchant provider. The goal is to get you to pay, believing it’s necessary for compliance.
What to do: Always verify the legitimacy of unexpected invoices. Contact your credit card processing company to confirm if the invoice is valid. If you’re a CardFellow client, reach out for help.
Physical Card Tampering
In a more complex scam, thieves intercept chip cards in the mail, remove the EMV chip, and replace it with a chip from an older card. When the legitimate cardholder activates their new card, it won’t work, while the scammer uses the modified card to access funds.
The U.S. Secret Service reports that this scam primarily targets larger corporations, but all businesses should remain vigilant and monitor accounts for signs of fraud.
The Facts About EMV
Understanding EMV is crucial to avoiding scams. Here are some important facts:
- EMV Machines Are Not Mandatory: While upgrading to an EMV-capable machine is strongly advised, it’s not a requirement. However, using non-EMV machines can make you liable for fraudulent transactions, and some processors may charge additional fees for non-compliance.
- EMV Machines Don’t Lower Rates: There is currently no difference in interchange fees between chip cards and traditional magnetic stripe cards.