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Channel NewsAsia - Friday, June 6

SINGAPORE: Duped by fraudsters in a credit card scam, American businessman Steve Mozena was astonished to discover the transaction apparently originated from a country reputedly tough on crime — Singapore.

"As a result, I have been cheated out of nearly US$9,000 (S$12,300), which is a large amount for a small business like mine," wrote Mr Mozena, who owns a small medical equipment and supplies store in California, in an email last week to Today.

He is not alone: Since 2002, various reports have surfaced of credit card—related scams committed by companies or individuals purporting to be in Singapore. The Commercial Affairs Department has received more than 70 complaints from online merchants overseas since 2003.

However, on Thursday, a Monetary Authority of Singapore representative denied that such cases are on the rise.

The spokesperson pointed out: "The cards used in such schemes may have been issued from anywhere in the world, and any number of countries could be used as transit, forwarding or distribution for goods purchased through card—not—present fraud schemes."

The police believe the fraudsters are not based in Singapore.

Since January last year, the US Embassy has carried an advisory on its website urging online sellers to check the legitimacy of the cards if they get an order supposedly from Singapore.

But wherever the real origins of the fraudsters, their actions present a nightmare for small time businessmen like Mr Mozena, as credit card companies inform them of the swindle only after the goods are shipped, in some cases weeks later.

While the legitimate cardholders are not liable for the charges, the business is responsible for a "charge back" — a reversal of a credit card transaction to the merchant.

To make matters worse, they also no longer have control over the items sold. Said Mr Mozena: "I have contacted my insurance broker to see if my business insurance covers the loss. Though if it does, it’s likely my insurance premiums will go up."

The US Embassy advisory cautions traders that orders — placed via telephone or online and usually in the region of US$5,000 to US$30,000 — sent to Singapore could be redistributed elsewhere and, if this happens, the cost of recovering the goods is "prohibitive".

When contacted, the embassy was not able to give any indication of the number of cases reported, as "any crimes that take place in Singapore are under the exclusive purview of the Singaporean authorities".

A police spokesperson told TODAY that between 2002 and 2003, the fraudsters’ modus operandi was to simply add "Singapore" as part of the shipment consignee’s address, even though they were located elsewhere.

But from 2004 on, these cheats began using the contact details of bona fide freight forwarding companies in Singapore as the consignee. Once the shipments arrived in Singapore, the cargo would be redirected elsewhere.

As such, the CAD has been working closely with US law enforcement agencies and regional police forces, other government agencies and industry players through fraud information sharing.

They have also helped victims recover goods worth more than US$350,000, said the police spokesperson.

Despite these efforts, traders like Mr Mozena continue to fall prey to such cons. The police say, public education is the best way to convey the message: Online traders can protect themselves by exercising “greater caution when processing orders from questionable customers who place exceptionally large or unusual orders, provide questionable contact details or multiple credit card numbers for payment”.

Mr Mozena admits that he was not as careful as he could have been. "My company has been in operation for less than a year and my website was not yet secure," he explained.

"These credit card criminals obviously prey on websites not yet finished or secure. But does this make it my fault for being too trusting, especially in dealing with people apparently from a country that is known to crack down hard on crime?"

Meanwhile, the MAS is collaborating with the banking industry to keep an eye on the issue.

"Banks are required to have in place robust fraud detection and prevention controls, as well as remedial procedures to minimise the incidence of credit card fraud," said their spokesperson. — TODAY/sh

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