The Music & Sound Retailer columnist Allen McBroom details a scam that’s targeting MI retailers.
“Hi, I need to buy some gear. Four powered speakers, three sets of high-end headphones, a 12- channel mixer, and a powered sub. I have the model numbers I need, can you help me out?” When we heard that opening line on our phone last week, we immediately thought “Yeah, man, a good sale’s about to happen!” The customer, Steven, said he was in Starkville, Miss., (our town), but couldn’t leave home due to COVID quarantine, but he’d like to buy local, not online. Could he pay us right now over the phone? We rang up the $2,000-plus sale, ran the card (which cleared just fine, even had the three numbers on the back), and started getting the gear together so it could be picked up right away. Steven was going to get FedEx to pick up the gear, so he could send it to his son, who is a professional DJ in Powder Springs, Ga., and he needed the gear right away.
The employee who made this sale was pretty happy about the big ticket value, until we started talking about the details. What is the buyer’s home address? What did he sound like? What address in Georgia would be getting the gear? What is the son’s name? Can we go to his home with a portable card processor and get a swipe on the card?
The more questions we asked, the more this deal was starting to smell fishy. After getting some more details, we figured the sale was a scam, and we probably needed to get out of it. Luckily for us, we refunded the money before FedEx showed up, and all we lost was some time, but we gained a real lesson in paying attention.
Across America, this scam is being perpetrated on music stores over and over. Stores in Illinois, New Mexico, Missouri, Mississippi and other states have been hit hard for tens of thousands of dollars is chargebacks due to fraudulent purchases. Each time the scam is run, it follows a scenario similar to the one described below.
The phone rings, and the caller ID says the call is from Christland W. The caller gives his name as Steven Maxx, and his email name is Steven Mark, and his email is a Yahoo email account. He has a distinct accent, the sort of accent I associate with New Delhi, India, and there is audible chatter in the background, very similar to the background noise heard in boiler-room call centers.
Steven says he would like to come to the store, but due to being quarantined, he cannot get out right now. Since we’re local, he trusts us to take care of him. (Steven’s phone number checked back to Riverside, Calif. When we later looked at his local address on Google street maps, his address was an empty lot.) Steven describes the gear he needs, gear which our website shows to be in stock and available. He orders about $2,000 worth of gear ($2,000 seems to be the magic number for Steven’s orders) and asks us to get the gear together, he needs it right away for his son, and in several of the scams he describes the son as “a professional DJ in another state”).
Steven then pays for the purchase with a credit card, and he has all the details, including the security code and the correct zip code. (The zip code was from another state, but being a university town, that’s usually not a red flag for us.) He then texts or emails instructions on where the order needs to go, he is sending FedEx by in an hour or so to pick up the gear. (The instructions specify that FedEx is picking up the gear on Steven’s FedEx account number, and the gear is being shipped overnight priority.)
Within the next two hours, a FedEx truck pulls up, and the driver comes in to pick up the gear, with the shipping prepaid.
We refunded Steven’s credit card within 30 minutes of the sale, and when he called to ask if the gear was ready for pickup, we told him on a sale of that size, we were required to swipe the card. (That was a new requirement I just made up on the spot, but as the owner, I can set whatever requirements I like.) We told Steven we knew he was quarantined, but we wanted to provide excellent service, so we would come over to his address, all he had to do was stick the card out the door, and we’d run the card right there on the spot. No need to leave home, we’d be there in less than 15 minutes.
Steven suddenly said to forget the whole thing, he needed to think about this, and to just send FedEx away when they showed up. It looked to us like our concerns were justified.
The whole thing was a scam, and it’s working over and over with music stores across America. One credit card holder contacted one of the music stores on the phone, and said he’d had over $7,000 on bogus charges on his card alone, and all the charges were from music stores.
The story of what happened to us was posted in the IMSO (Independent Music Store Owners) forum, and within an hour or so, several other stores spoke up saying the same scam had been attempted on them, often by a scammer using the same name or a variation on the Steven Maxx name, the same quarantine story, and the same “pro DJ son” spiel. One store actually had an order waiting for FedEx when they read the familiar story online, and were able to cancel the order before the pickup happened.
Corson Music in Champaign, Ill., had taken a good-sized order from Steven Maxx at the same Riverside, Calif., phone number when Dyke Corson, the owner, read about the scam on the IMSO forums. “We were actually boxing up the order for FedEx when I saw the article about the scam, so we checked the local address Steven Maxx gave us, and guess what? It was the address for a church right here in Champaign, a church we already had in our system. That cinched it for us, and we knew it was a scam.”
Tim Woestendiek of Tower Music in Fenton, Miss., had a very similar experience with probably the same scammer. About a month before we got the scam call, Tim got an order for around $2,000 for some gear he didn’t have in stock. He took the order, ran the credit card (which cleared just fine), and special ordered all the gear. The buyer/scammer, who used a variant of the name Steven Maxx or Steven Mark, called Tim every day for two weeks until all the gear was in. At this point, the buyer asked that all the gear be shipped. Tim was noticing that this Steven had a foreign accent, and all the calls sounded like they were originating in a call center. On a hunch, Tim called his card processor, and found out that Steven’s credit card had been cancelled, so Tim called the scammer and asked him to send a photo of the card and a photo of his ID card. Not surprisingly, the buyer/scammer suddenly canceled the order.
According to one credit card processor, these stories have all the earmarks of a typical call center scam, and the store stands to lose more than just the value of the gear.
The store eventually gets a chargeback on their card processing account, so the $2,000 deposit is sucked back out as a fraudulent charge. Next, the store is out the gear, and gear is very hard to replace right now. Just to add insult to injury, it is possible the shipping company could come back and try to get shipping fees out of the shipper store, because the scammer used the same bogus card to fund their new FedEx overnight shipping account.
There are some things one can do to prevent scams like this from taking chunks out of the store’s general fund, and most of those things involve being fully involved and paying close attention.
Using the details of our attempted scam operation, let’s look at the red flags that were present in this transaction.
POSSIBLE RED FLAGS
Inconsistent buyer names. Our scammer used the names Christland W, Steven Maxx, and Steven Mark. These are all very Anglo names, and the caller had a distinct non-Anglo accent.
Email address from yahoo, hotmail, or gmail If the buyer is using a university or government email address, or an email address that would be very hard to spoof (i.e., a well-known commercial business email address), the email has a much better chance of being real than the easily attained and disposable email addresses afforded by companies like hotmail or yahoo.
Buyer arranges truck freight and marks it OVERNIGHT. Overnight priority shipping is great for time-sensitive business documents, or parts to fix expensive machines that cannot afford to be down, but DJ gear? Overnight priority is picked up right away, because the scammer wants the purchase to be in the shipping pipeline as fast as possible, before anyone notices the inconsistencies of the sale. The scammer doesn’t care how much the shipping costs, because, well, he’s using a stolen credit card to pay for it.
Buyer asks very few questions. We’ve all had enough $2,000 level sales that we know how the discussion goes. If this the best option for me? Do you have something else that would do the job that costs less? Is there a discount? When those typical parts of the conversation are left out, you need to be asking more questions about the buyer.
The address for the destination is a vacant rental property. Our friend, Google, showed us pretty quick that the delivery address was a vacant rental house in Powder Springs, Ga. This is such a simple check to do, I’m surprised it’s not done more often.
The buyers’ address is a vacant lot. Same observation as above. If you get scammed and lose money and gear, it’s too late to check the address then. Check it before the deal wraps up.
Quarantined buyer sounds like he is in a boiler room operation. Listen closely to the phone call. What do you hear in the background? Does it agree with the buyer’s story? Do you hear many voices, are the voices obviously not local to you?
The sale was too easy and too fast. This may be the most obvious clue of all. If it’s too easy to be true, it’s probably not.
Consignee’s name (son) is Indian, and buyer’s name (dad) is Anglo. Disregarding for the moment the buyer having three different names, a dad’s name will usually be at least similar to the cultural background of the son’s name, or somewhere in the ballpark of being similar. In our case, the son’s name sounded Indian, the dad sounded Scot/Anglo/Something-Not-From-India.
Buyer refuses to let you come to his address, for his convenience, and do a card swipe. Quarantined people can still swipe their cards at their doors, and the refusal to do that sounded another alarm for us.
Any one of the conditions above doesn’t raise the alarm for us. Two of them in the same deal will cause us to check our details carefully. All 10 in the same transaction, and it’s highly likely the deal is a fraudulent purchase, and if we aren’t vigilant in watching our store transactions, we could be out the money, the gear, and possibly even the very expensive shipping.
It’s probable this scammer will change his tactics once they are widely recognized by the music store community, but while he can change the names, the addresses, and the story line, some things will remain constant. He’ll be using a credit card that is valid at the moment he calls you. He’ll want the product shipped, and shipped quickly. The sale amount will be larger than your average ticket amount. The caller will have a plausible reason he cannot come to the store. He’ll not be someone you already know. The address details won’t pass the Google test in a store-satisfying manner.
In the end, it’s our duty as store owners to be vigilant, plugged in to the daily activity, and aware of any unusual patterns. And, don’t be hesitant to cancel/refund a credit card transaction if you have doubts. Scammer aren’t going to work too hard to make a scam transaction stick, they’ll just move on to the next victim. Be alert, and make sure the next victim isn’t you.
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