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MPD Warns Merchants on PayPal Scam

Monday, August 4, 2014

The Metropolitan Police Department is currently investigating a fraud scheme involving PayPal MasterCard Prepaid Debit cards stolen from retail stores. At this time, it appears that the suspects are using these stolen cards to exploit an often misunderstood feature of Point of Sale Systems at restaurants and retail stores, which allows the merchant to approve an offline transaction for a card. Suspects have tricked merchants into believing the charge has been approved.  Merchants later discover that they are receiving chargebacks for transactions processed in this manner.  Merchants may be able to avoid being victimized by not allowing offline transactions using PayPal MasterCard Prepaid Debit Cards, unless the merchant personally contacts MasterCard or PayPal and obtains confirmation that the card is valid.  Merchants who are unsure about the proper way to confirm the validity of any card should refer to the user agreements and handbooks for their credit card processing equipment.  Merchants should also contact the organization responsible for processing their credit card charges for further guidance.

PayPal MasterCard Prepaid Debit Cards display the name “PayPal Customer” along with a 16 digit number and the PayPal logo in the upper left hand corner.

The Metropolitan Police Department is asking any retailers with information about PayPal MasterCard Prepaid Debit Cards, which have been stolen from their stores, or who have been the victim of this Fraud Scheme to file a police report.

Anyone who has information regarding these crimes should call police at 202-727-9099.  Additionally, information may be submitted to the TEXT TIP LINE by text messaging 50411.  The Metropolitan Police Department currently offers a reward of up to $1,000 to anyone who provides information that leads to the arrest and conviction of the person or persons responsible for a serious crime committed in the District of Columbia.