Being a small business owner is hard work. Promoting the business, balancing the checkbook, paying the creditors, paying your employees, and more. It’s a lot to manage, but it all falls on your shoulders.
As the “shop small” movement continues to expand, it means your life will only continue to become busier – especially in the upcoming weeks. This is great news for you!
The not so great news?
One slip-up when it comes to keeping things in order could mean facing charges of credit card fraud. As a North Carolina business owner, get ahead of the game and know what credit card looks like so that you’ll know how to spot and avoid it (or even fight charges, if necessary)!
Types of Credit Card Fraud in North Carolina
In this state, there are a couple of different ways a business owner can intentionally or unintentionally commit credit card fraud during the purchase process.
Credit Card Theft
Stealing a credit card with the intention to use it is the most obvious type of credit card fraud. This also includes stealing the card number or other information, not just the physical card.
If a customer uses a stolen card or stolen information to complete an online order, you could be held liable for credit card theft, as well.
When a person falsely makes, duplicates, signs, or otherwise alters a credit card with the intent of depriving the rightful owner of those funds, that is card forgery.
Someone can also be guilty of this crime in North Carolina if they have credit cards with the names of two or more unrelated people.
Similar to stolen cards or information, when you are proven to have utilized a forged card, you may be held at least partially responsible for any theft.
Factoring of a credit card occurs when a business owner, or any of their employees, used the card to process a transaction without the cardholder’s permission. Anyone who even attempts to do this is also considered guilty.
You should always get a cardholder’s permission in person or it should be expressed via hand-written or typed approval before charging the purchase.
Penalties for Credit Card Fraud in North Carolina
Credit card fraud can be charged as either a felony or a misdemeanor, and largely depends upon the amount that was defrauded and any relevant criminal history.
Misdemeanor Credit Card Fraud
For fraudulent activities that amount to $500 or less, you would likely be looking at a Class 2 Misdemeanor charge. This carries a possible sentence of 1-6 months in jail, as well as a possible fine or order of restitution to the victim.
Felony Credit Card Fraud
Forgery and factoring are always considered felonies in North Carolina. Additionally, if a card is stolen and the value of any services or goods that are obtained fraudulently exceeds $500, then the perpetrator could be guilty of a Class I Felony.
These charges could result in six months or more in jail, plus an appropriate fine upon conviction.
Avoiding North Carolina Credit Card Fraud
As a small business owner, you already have enough on your plate this holiday season. You don’t need credit card fraud charges derailing your fourth-quarter efforts.
Steer clear when it comes to credit card charges by incorporating the following tips into yours and/or your sales associates’ routine.
Get all of the Information
Always get all of the information to verify the card user is the rightful cardholder. This means verifying the name, identity, and signature. This is especially important if you’re processing a transaction over the phone. Get the name, the billing address, and the security code.
Watch for Suspicious Activity
A frequent shopper who always uses a different card? A shipping and billing address that doesn’t match? Large orders with a “rush” on shipping? These are all suspicious activities that could indicate fraudulent activity. Be wary.
Speak Up, Ask Questions
Don’t be afraid to ask a customer for additional information to verify their identity or right to use the credit card. If an order is made online or via phone and you have a funny feeling, don’t be afraid to ask the customer to fax you a picture of both sides of the card.
Dealing with NC Credit Card Fraud Under Your Business’s Roof
If you believe you or an employee has completed a transaction with a fraudulent card or other information, you should report it immediately.
Secondly, do your best to ensure the card or card information is not being retained by any of your employees or anybody else who may have had access to it.
Especially during the holiday season, it’s important to educate yourself and your employees on what credit card fraud looks like. A charge of credit card fraud – warranted or not – can seriously damage your business.
As the business owner, you are responsible for ensuring that all of your employees are educated on how to prevent, identify, and report credit card fraud.
If you have questions regarding any accusations or particular situations, reach out to an experienced NC fraud attorney for advice.