“A man ran up a $7,753.22 bill at an Apple store,” Patty Ryan reports for The Tampa Bay Times. “When his debit card was declined, he pretended to call his bank. He gave the store clerk a fake authorization code to punch into the card reader.”
“And that’s how the man, 24-year-old Sharron Laverne Parrish Jr. of Tampa, scammed one of the biggest high-tech companies in the world — not once but 42 times — totaling $309,768, according to federal court records,” Ryan reports. “A Secret Service criminal complaint charges Parrish with wire fraud, alleging that he tricked Apple clerks in 16 states into accepting meaningless override codes.”
“Parrish, who lists a home address in the River Grove area of east Tampa, was held without bail in the Pinellas County Jail,” Ryan reports. “The scam was made possible through a practice known as a ‘forced sale,’ ‘forced post’ or ‘forced code.'”
“A credit or debit card gets declined, a customer protests that funds should be available and a merchant calls the card issuer, looking for authorization to proceed. If the issuer approves, the merchant gets an authorization code, creating a record of the override. But that code isn’t special. ‘It does not actually matter what code the merchant types into the terminal,’ the U.S. Attorney’s Office in New Jersey stated publicly in February after a similar case there. ‘Any combination of digits will override the denial.'”
MacDailyNews Take: Seems like a “system” that’s ripe for improvement. Gee, wonder which company could fix this?
“The New Jersey case led to a three-year prison sentence for Temeshia McDonald, 29, who defrauded Victoria’s Secret, Banana Republic and other retailers out of $557,690. She was ordered to pay restitution,” Ryan reports. “Merchants can wind up liable for charges if they override a denial. That was the case with Parrish’s transaction at the Apple store in Brandon on Jan. 18, 2013, according to the court record. ‘Because Apple employees overrode the initial declination against the instructions of Chase Bank, Apple — not the financial institution — suffered the loss as a result of this fraudulent transaction,’ agent Halliwell wrote.”
Read more in the full article here.