Brisbane business stung by Asian credit card scam - couriermail.com.au - 10 Jun 2008

A BRISBANE exporter of fitness equipment has been the victim of a credit card fraud scheme operating out of Asia

Paul Timms, owner of the Australian Institute of Personal Trainers in the northern Brisbane suburb of Banyo, said the sting would have put him out of business if it had happened a few years ago when he was just starting out.

As it is, the AIPT can recover from its $10,000 loss but it had a newfound wariness of foreign orders by credit card.

"The first order came through (from Indonesia). It was a few hundred bucks," Mr Timms said. "I thought, `that's pretty good'."The next one that came through was for about a grand. I thought, `Oh, that's a good customer'.

"The customer then began ordering 20 blood pressure meters at a time, between $3000 and $4000 worth."That's not a huge sale for us but it was a promising pipeline, to the point where we started to beef up the inventory of those particular items we were stocking," Mr Timms said."

We never expected to be the target of fraud because you're processing credit card payments all day long."It was Mr Timm's 21-year-old accountant, Lisa Singleton, in just her second full-time job, who picked up a hole in the accounts.

The bank broke the bad news. The "customer" had been stealing credit cards from the US and running a "skimming" scam."What they do is take the first eight numbers and keep changing the last couple, using the same expiry date," Ms Singleton said."Then when the real credit card holder finds it on their statement, they dispute it with their bank and we're 100 per cent liable."At least Mr Timms' business was able to call its courier and have the final package recovered.Timms says a $10,000 fraud might have driven him out of business five years ago.

"Luckily, our business has grown very quickly in the past three years and we've got the EBIT (earnings before interest and tax) capacity to deal with that sort of loss."The business has a newfound wariness of foreign orders by credit card.One technique for verifying an overseas purchaser was passed on to Ms Singleton by the Commonwealth Bank."

What you can do is process (the payment) and then ask the client how much was actually taken out of their credit card," she says."So that way we can actually verify it is their account and their credit card."

The bank is also working to arrange a more secure online purchasing facility.Austrade chief economist Tim Harcourt says Asia in general is improving as a place to do business, with small operators more likely to be stung in the US."There's an old expression: the exporter that doesn't go to Asia because he's scared he's going to lose his shirt loses his pants in America," Mr Harcourt says.

He urges businesses to tap into Austrade's global networks to source foreign buyers and "see if they're kosher".There is also insurance through the Export Finance Insurance Corporation's Headway program.