Scammers exploit credit card terminals at Calgary sex show

Vendors at a recent Calgary trade show say their credit card payment processor didn't do enough to help them use and activate a security feature on their terminals that could have prevented fraudulent transactions from going through.

The scam involves purported customers presenting what looks like a legitimate, regular credit card to pay for goods. The card is actually a fake "administrative card," which gives them complete access to the terminal, and allows them to manually enter in an alternative, usually stolen credit card number.

"Everything checked out on our end, and we got approved with the transaction," said Corey Mehaney, owner of Subcana.

He lost out on more than $700 worth of merchandise when he was hit by an alleged fraudster at the Taboo Naughty but Nice Sex Show in Calgary.

When the fake transaction goesthrough, it'scharged to the manually-entered number and isn't linked to the actual credit card presented.

But within several weeks, the purchaseisdiscovered as fraudulent and the vendor has to pay back the fraudulently charged funds, along withbeing on the hook for a "chargeback" fee from the credit card processor. That's when the vendor realizes their merchandise was actually stolen.

Password feature prevents scam

A password feature, built into Moneris's terminals since mid-2017, can prevent this scam from working. It would require merchants to enter in a unique password each time a credit card is manually keyed in.

But multiple merchants at the Taboo show told CBC Newsthey had never heard of this feature from their credit card partner.

"The only way we find out about it is after a chargeback, which actually costs us money," explained Mehaney.

Subcanacalled Moneris to report theexperience with credit card fraud during the Taboo show after security officials at the venue advised they were potential victims.

"After I was able to contact our payment provider [Moneris], they did talk about a password protection for the machines," said Mehaney.

Laurel Hurlburt, owner of E-Sensuals, a booth only metres away from Subcana, found out about the password feature from Mehaney.

Her business had been previously hit by the same scam in another city, so she knew what to watch for and was able to stop another fraudster from pulling the same trick at the Calgary Taboo show.

Hurlburtsaid she's concerned she never heard about this scam or how to protect her credit card terminal and business directly from Moneris.

"I had got more details from a Facebook group," said Hurlburt, who believes Monerisshould issue a direct warning about this type of scam.Hurlburtalso said that when she called to report her previous experience with a credit card scam, she was not informed about the password protection.

"I'm going to call them [Moneris] and ask to help protect myself," said Hurlburt, after hearing about the password feature's existence from her trade show peers.

Moneris does provide tutorials

Moneris's website and set up material do provide information on the password protection feature, including a YouTube link where setting up the security feature is described more than three-quarters of the way into the video.

The company declined multiple interview requests with CBC News, but in an emailed statement said they "proactively communicate with ourmerchants to advise them about this and other security features."

According to Moneris, all new terminals have the password system ready to use, and that merchants are asked to seta unique password for manually-keyed credit card transactionsas part of initial activation.

While the feature has been available since April 2017,MehaneytoldCBCNews his business has had aMonerismachine for onlythe past several months and that he was not made aware of the password system when he activated it.

The feature is not mandatorydespite being able to prevent the type of credit card fraud that hit the Taboo trade show in Calgary.

"It is ultimately up to ... the merchants, in this case, to determine if and how to use the available protections," saidDarren Leroux, senior manager of communications with Moneris in an email to CBC News.

• MORE CALGARY NEWS|Calgary turning downtown office towers into condos and apartments
• MORE CALGARY NEWS|More than 1,000 donated items of winter clothing stolen from Calgary charity
• Read more articles byCBC Calgary, like us onFacebookfor updates and subscribe to ourCBC Calgary newsletterfor the day's news at a glance