Spotting and Preventing Scams: Good habit is to never leave your account for multiple days without checking it at least once.
Introduction:
With the emergence of e-commerce and online shopping portals, many brands have either switched or started offering their products and services online and through their website or third-party e-commerce portals such as Amazon. Nordstrom is one such company. Nordstrom is a high-end department store found mostly in malls in the east and midwest. They offer high-end fashion, and their product line consists of shoes, purses, clothes, and other apparel.
Nordstrom in 2007 decided to have an online presence and acquired HauteLook for 180 million dollars in stock options. HauteLook offered discounted high fashion offering similar apparel to Nordstorm but at a much lower clearance rate. HauteLook is free to join the membership. Every day at 8 am Pacific time, flash sales are announced with offers on women’s and men’s fashion, jewelry, accessories, beauty products, kids’ clothing, toys, and home decor.
On acquiring HauteLook in 2007, it was renamed Haute Rack Nordstrom and was used to sell off items that failed to sell in the offline stores. These apparel were put up on the website and sold during the flash sales once the season was over, creating a win-win situation as Nordstrom could get rid of excess stock while the customer was getting a good deal on the items they purchased through Haut Rack. However, soon enough, problems started emerging.
HautlkRack:
After the initial launch of HauteLook, people started using the website and giving them business. Usually, when an order is placed, a confirmation mail is sent to the customer, letting them know the order has been placed with the details and the charged amount. This is also backed by messages from the bank saying that ‘x amount has been charged to your account’ While this is a standard procedure, many people started getting messages stating that their account was charged for amounts as high as 3000 dollars. In contrast, they had never even visited the website or made any kind of purchase.
They also received messages giving them their order number without them having even made a purchase. An example of this was a message that read HAUTLK RACK 8885478438 listing the merchant as Hautlk Rack. While some people were oblivious to the fact and didn’t realize till later that their debit or credit card had been charged, some people who maintained the practice of checking their account for any red flags every day were able to catch it and alert the bank in time for them to stop the transaction and refund the money.
Most people, however, we’re susceptible to what can only be called a scam as they were robbed of their money from their accounts or just charged ridiculous amounts on their credit cards, which they had to refute and let the bank do their investigations, which could take as many as 45 days with no guarantee of a verdict in favor of the customer who had been unfortunately duped.
Some people who were using fraud detection services were instantly alerted and were able to block the transaction itself from taking place, meaning that they could keep the money safe in their bank accounts. The message disguising itself as a receipt for online orders also deceived many who believed it to be a receipt for something they might have ordered. Still, on never receiving any deliveries in the days that followed, they grew suspicious, and it was only then that they found out that the money was taken from their account without any order being placed at all.
While Nordstorm denies any responsibility, it is difficult to say who the perpetrators behind this scam were and how they could take advantage of this new eCommerce website and disguise their fraud as part of the website receipts making it look legit. There are ways to avoid this from happening in the future and from even happening in the first place.
Good Practices:
One good practice that can quickly become a good habit is to never leave your account for multiple days without checking it at least once. Checking it every day is ideal, but even if you can check in and see how your account is doing every alternate day or maybe a couple of times a week, you are less likely to miss any discrepancies. If spotted, you would be able to report them promptly to the bank managing the account. While they have the power to refund and reverse transactions, banks cannot do so at a moment’s notice. Once the system has processed a transaction, it is challenging and time-consuming to get the money back.
For these banks, to catch the discrepancies and take the appropriate actions, time is of the essence. This is why those who were able to inform the bank about the error promptly were able to get their money back for the most part. Another helpful yet quite apparent good practice is not clicking on any random links or emails that come as spam or even managing to clear the spam filter.
If you do not know what the link is for, it is not advisable to click the link since it can contain viruses and other malware that can read data on your device and even record entries you make. If that is the case, some malware could have read the customers’ credit card details as they were being entered while making a purchase and then used that to further create false charges on the card that would pass through since all the details would have been accurate.
Many banks also offer fraud detection and fraud protection services that keep track of suspicious activity. If any such action on the card or account is noted, the transaction is blocked. It can only be processed after getting approval from the card or the account holder saying that this transaction is intentional and is being done by me.
Conclusion:
While credit and account fraud is something that affects thousands of people each day, there are small steps you can take to at least protect yourself more than before and help you avoid such unfortunate occurrences. When dealing with bank matters and credit card fraud, it is essential to keep evidence of when the fraud happened and how it happened and inform the bank about it as soon as possible. The acceptable practices mentioned above, if used well, can alert you regarding this enabling you to go to your bank as soon as such a transaction has occurred so that you can get it fixed in time and not have to run around. Waste days and weeks trying to solve and regain the money lost after the transaction has already taken place.
