U.S. Exports Facilitated by Fraudulent Credit Card Transactions are on the Rise

If you receive a credit card order from Singapore, check its legitimacy before you ship. The U.S. Commercial Service, American Embassy Singapore, has received multiple complaints from U.S. merchants reporting fraudulent credit card transactions committed by companies/individuals purporting to be in Singapore. The initial investigation of the fraudulent transactions has revealed that the shipments are actually being sent to freight forwarders in Singapore and diverted to unknown consignees in neighboring countries.

Warning Signs:

The orders normally range from US $5,000 to US $30,000. The “buyer” places the order via telephone or Internet email correspondence.  The “buyer” either splits the total purchase price between several cards or makes several attempts (using multiple credit card numbers) to complete the transaction. Once the transaction/credit card number(s) are accepted, the “buyer” requests immediate air shipment. Not aware of the fraud that has just occurred, the merchant complies with the customer’s request of an expedited shipment.

The U.S. Commercial Service, U.S. Immigration and Customs Enforcement, and the Singapore Police Force, Commercial Affairs Department have identified that the “Ship To” addresses are normally those of freight forwarders near Singapore’s primary air cargo and passenger airport (Changi).  When the goods arrive, they are relabeled and transshipped to countries throughout the region.  Once this occurs, the recovery of the goods is prohibitive.

The fraudulent transaction has a direct impact on the U.S. merchant, since the credit card company notifies the merchant of the fraud only after the goods have been shipped (in some instances weeks later).  The merchant, therefore, is now not only responsible for the “charge back” from the credit card company, but he also no longer has control over the merchandise.

What can you do to protect your business against credit card fraud?

• Work with your card company. Sign up to participate in authentication programs such as Verified by Visa and MasterCard’s SecureCode.

• When taking orders over the phone or Internet, ask the customer for the card’s expiration date and include it in your authorization request. An invalid or missing expiration date can be an indicator that the customer does not have the actual card, but merely the credit card number. 

• Use fraud detection tools such as the card’s validation code as part of the authorization process. 

• Be wary of multiple credit card numbers being supplied for purchases from a single IP (Internet Protocol) address. 

• Be wary of orders charged to multiple cards and destined for the same street address. 

• Be alert for transactions with more than one of the following characteristics: first-time customer, the customer does not appear to have a “working” knowledge of the item requested, “big-ticket” items, multiples of the same item, requests for expedited shipment for items of seemingly low value/importance, and orders shipped to an international address (wherein a simple Internet search reveals that the “Ship To” address is located in the area of airport cargo terminals/freight forwarders).

Protect Yourself.

Common sense is your best defense.  If the order appears “too good to be true” or if you have questions, check it out.  

If you receive a credit card order from a new customer in Singapore and have any questions immediately contact:  

U.S. Commercial Service
Singapore.Office.Box@N0SPAM.mail.doc.gov
Tel: [+65] 6476-9037
Fax: [+65] 6476-9080

If you have not shipped the order, the Commercial Service can verify the bona fides of the buyer. If you have already shipped the order and have received a charge back, we will work with the FBI and the Singapore Police Force to register the case but chances of recovering the merchandise are slim.

If after reading this warning you decided that the transaction was most likely fraudulent and you declined the order, please let us know by taking two minutes to fill out this webform. 

This information will be compiled and forwarded in aggregate to the Singapore Police to aid in their investigation of these schemes.

We are measured by assistance we provide U.S. companies, including protecting them from fraudulent activities.  We would like to report this as such.  All information will be kept strictly confidential.

If you believe that your company has been a victim of internet credit card fraud you can also file a complaint through the FBI Internet Crime Complaint Center at http://www.IC3.gov.  

A little about Singapore.

Singapore is currently the 9^th largest international market for U.S. goods and services and is a major trading center for firms doing business in Southeast Asia. Singapore is home to more than 1,500 U.S. businesses. The U.S. and Singapore signed a Free Trade Agreement in 2004.  Since the signing, U.S. exports to Singapore have increased by nearly 50 percent. The vast majority of transactions occur without problem. However, credit card fraud, as reported to the U.S. Commercial Service, is growing. U.S. firms are encouraged to contact their credit card companies and the Commercial Service of the U.S. Department of Commerce with any concerns.