Small Business Identity Theft & Other Nuisances I Don't Have Time to Deal With

So, a couple of weeks ago, I received a voicemail message from a man in Boise, Idaho, who said that his bank had contacted him regarding a suspicious attempted charge to his credit card.  He said his bank gave him my phone number and the business name Custom Coverings by Rebecca (which is the original name of my design business -- I changed the name to Custom Interiors by Rebecca about 3 or 4 years ago) as the merchant for the transaction.  I checked my merchant credit card processing account as well as the business bank account that any credit card sales are deposited into, and found no record of the transaction.  I assumed it was an error, maybe a couple of digits transposed in the merchant number for the transaction, and put it out of my mind.

But then today I got another call on my business line, this time from a woman in Colorado Springs, Colorado, telling me the same thing -- her bank had red-flagged a debit card transaction because the card number was keyed in manually and because the transaction was in Charlotte, North Carolina and the cardholder lives on the other side of the country.  Again, supposedly my business is the one keying in her card number.  What's going on here?!  If these charges were being run on my equipment, or on any equipment associated with my merchant credit card processing account, the transactions would show up in my bank records.  I'm alarmed that I've gotten two of these phone calls now.  Obviously some crook somewhere has impersonated my business to establish their own merchant credit card processing account -- they're running phony charges on stolen card numbers, with the money depositing into some bank account somewhere with my business name and information on it, and then they withdraw the cash from the bank.  It's a variation on old-fashioned credit card fraud, where thieves try to make purchases with stolen cards at retail locations.  You can read more about delightful scams like these involving other small businesses here, and here.   

You might be thinking, "So what?  They aren't stealing anything from you, and the people who called you didn't lose any money either because their banks stopped the charges."  True, but how many other transactions are there besides these two people who took the extra time to call me and tell me that the charges weren't legit?  The man in Idaho wanted to know if someone had come into my "store" (I have no store; I work out of my home) with a fake card that had his number on it, and the woman from Colorado was concerned that my "store" had been defrauded out of whatever goods the criminal had purchased with her stolen debit card number and wanted to let me know what had happened.  I wonder how long this has been going on, and how many other victims are involved that I don't know about?

Also, it's not so easy to open a merchant credit card processing account.  You have to fill out paperwork listing all the information that would go on a loan application, like your EIN or Social Security number if your business is a sole proprietorship like mine, with your address, how long you've been in business, phone number, and bank information so they know where to deposit the money when someone pays you with a credit card.  The credit card processing company is supposed to verify all this information.  If this crook set up his account using my business name AND my business phone number, what other information do they have?  Do they have my Social Security number?  If so, what's to stop them from taking out small business loans in my name?!

The really annoying thing is that I haven't been able to figure out what to do about this yet.  Obviously I want the fake merchant account closed down, but I don't know who to call to report that it's a fraudulent account.  It's not like there's just one MasterCard/Visa Merchant Services number I can call.  There are tons of different companies offering credit card processing services to merchants, just like there are lots of different places where consumers can apply for these credit cards.  I tried calling the number for voice authorization, but they transferred me to a couple of different departments and ultimately decided there was nothing they could do to help me.  I tried calling the Charlotte-Mecklenburg Police Department to file a police report, but after waiting on hold for 45 minutes I was simply told that there was nothing I could do about it because I was not the victim of a crime.  I even called the local office of the FBI, and they told me that it wasn't any of their concern, either.  Somewhere, somebody has to have a database of merchants who accept credit cards, and someone needs to shut this operation down, don't they?! 

I HATE CREDIT CARDS!!  Please, if there's anyone out there reading this who knows who I should call to resolve this issue, PLEASE let me know in the comments section.  All I can do at this point is to notify the credit reporting agencies to put an alert on my file and notify me if anyone attempts to open a new line of credit in my name, but meanwhile someone is still impersonating my business to steal from innocent consumers across the country, and I feel powerless to stop them.  I don't know the merchant account number that they're using, or which card processing company set up the account, and there are hundreds of them...

As of March 2nd of this year, my business no longer accepts credit cards.  I finally closed my real merchant account this month because so few clients are choosing to pay by credit card anymore, yet every month there's a $35 fee for having a merchant card processing account, and whenever I did have a charge transaction the credit card companies would take a percentage of those sales.  Every other month it seems I was getting another notice from MasterCard and Visa about rate increases, or new security procedures requiring me to sit on hold for half an hour in order to update my credit card terminal...  Since credit card transactions never accounted for even 10% of my business, and since I've only had one credit card transaction in the last 6 months, I decided to cancel my merchant account and stop accepting credit cards altogether.  It felt good to simplify things a little and tell the Merchant Services people to go take a hike.  I just wish I knew for sure that my personal information is still secure and that the fake Custom Coverings account was shut down.

UPDATE 3/22/2011: Yet another call today from a woman whose debit card was fraudulently charged by the lowlife scum impersonating my business.  This morning I called Bank of America Merchant Services, my former credit card processor, and the woman I spoke with there told me there is no way to find out which of the hundreds of card processing companies out there set up this fraudulent account, and the processing company is the only entity who can shut it down.  The Bank of America rep suggested that I check my credit report, which would list a new merchant account opened in association with either my Social Security number or my business EIN.  I checked my credit reports, and there's nothing there -- so the thieves must have used someone else's name and social security number in association with my business name.  I found a MSNBC article online about that happening to another business.  The thieves used the name and Social Security number of another individual who had no connection with the company they were impersonating and listed this guy as the CEO on the merchant services account application.  They also made some slight changes to the business address in hopes of ensuring the monthly merchant services statements get lost in the mail instead of delivered to the legitimate business they are impersonating.  That seems to be what has happened here -- if I got a welcome package or statement in the mail for an account I did not authorize, I'd just call the number on the statement and have it shut down.  Grrr...  The only good news is that the thieves do not seem to have my Social Security number and there are no crazy loans out there that I didn't know about.  I just feel terrible when these people keep calling me about the charges being made to their credit cards in my name!