How fraudsters are using Force Sale transactions to commit fraud
The Use of Force-Posted Transactions
Characteristics of Force-Posted Fraud
- Criminals obtain a merchant account using a fraudulent application or by recruiting a merchant to participate in an attack.
- Criminals deceive existing merchants by presenting forged bank letters that authorize “offline” (force-posted) transactions to pay for large sales orders to be laundered through the merchant’s account.
- The merchant may attempt a small initial sale to obtain a single valid authorization code for repeated use or simply manufacture fictitious codes.
- Criminals may use a small number of offshore cards to process numerous transactions that collectively exceed the merchant’s approved sales volume and average ticket amount.
- The attacks may occur over a weekend or a holiday, when acquiring and issuing staff coverage is perceived to be minimal.
- If the acquirer suspends funding, the fraud actors may present forged documentation to convince the acquirer to release funds.
- Failing to detect these red flags may result in significant financial losses and brand damage.