SHERWOOD MUSIC ’ S MARCUS WANKA ON CTV NEWS
the CVV , a postal code , and driver ’ s licence information . Days later they found out the credit cards were stolen and the driver ’ s licences were fake .
In total , Sherwood Music Sales and Procurement Manager Marcus Wanka tells CMT that the total value of the six guitars was about $ 23,000 . And in addition to losing the guitars , the store got a chargeback from the card-issuing bank because the purchases were made over the phone .
“ So , we had a fella call up that was looking to buy Les Pauls and , initially , he was just looking for information . So , he had a guitar in mind that he saw on our online store and he was asking questions about it ,” Wanka tells CMT about how the fraud went down . “ He called in , which was sort of par for the course at the time because this was around mid-January , so we were locked down .”
Sherwood Music , like most retailers , had a “ no credit cards over the phone ” policy , but because of the circumstances with the lockdown , Wanka acknowledges that they weren ’ t sticking to the policy like they should have . He says that now , having learned the hard way about this type of fraud , he sees that there were red flags in those phone conversations that the store didn ’ t recognize at the time .
The first big red flag was that the man insisted on paying by credit card over the phone rather than purchase the guitar through the website .
“ So , we took the credit card over the phone , then he asked if he could have it shipped with a Purolator label that he provided . So basically , private shipping to an address in Toronto ,” Wanka continues . “ Right away , we did what we normally do ; looked up the address and saw , yeah , there ’ s a house there . So , just got some information from him , got his driver ’ s licence , got the information on his credit card , did what we thought
was our due diligence , typed in the number , and everything checked out . So , the guitar is sold and we shipped it off and away it goes and he ’ s a happy customer .”
Then , a couple days later the guy calls back and goes through the same routine with a different guitar . “ He did this a number of times over a week or two , just sort of upping the ante each time and buying a more expensive guitar using the same method ,” says Wanka . And then a second person calls , wanting to do the same thing , with the guitars being shipped to the same address as the first guy . That ’ s when the folks at Sherwood Music got worried and knew something fishy was going on .
“ Obviously this shows how green we were to the online world , because most of the other stores that we talked to that also got scammed didn ’ t get scammed as many times as we did ,” Wanka recognizes , saying the same thieves also hit nearby Guelph Music , as well as other stores in Orillia and Cornwall , ON , and one in Manitoba . They also tried to scam Mountain Music in Hamilton , ON , but the folks there wisely refused to do any transaction over the phone .
“ We called Visa first and they said you have to call the bank that provided the card . So , okay , we call the bank and they were like , ‘ Yeah , everything looks okay here — no big deal .’ Then we asked , ‘ Well , can you verify the address ?’ and when we asked them that , they said , ‘ Yeah , that ’ s not the address that matches the credit card ,’” Wanka remembers . “ So , we were like , ‘ Is it fraudulent ?’ and they said they didn ’ t know . You know , maybe he lives at his dad ’ s house or something . Who knows , right ? Maybe he ’ s living wherever the address is related to . In the meantime , we then checked his driver ’ s licence with our regional police and they told us , ‘ This is a fake driver ’ s licence and that number doesn ’ t exist .’ So , at that point we were on to him and we went from there trying to do whatever we could to either get our stuff back or get more information from him so that we could maybe have some recourse , which of course never happened .”
To add insult to injury , the Sherwood Music team could later see their guitars being sold on Kijiji by someone in Montreal .
Frustratingly , they were told by Waterloo Regional Police that for jurisdictional reasons , there was nothing that could be done and that they shouldn ’ t engage with the fraudsters .
Looking back at it , while they did try to push the man on the phone to purchase the guitars through the store ’ s website , when he insisted on doing it by phone , that should ’ ve been a major red flag and Sherwood Music should have ended the purchase there . Like most current point-of-sale ( POS ) systems , Sherwood ’ s does flag suspicious credit card purchases and , it also could have avoided the chargeback ( or at least allowed Sherwood to fight it more successfully ).
“ What we learned was that we have to be super diligent . One , never take the cards over the phone for somebody you don ’ t know .
RETAIL SECURITY EXPERT STEPHEN O ’ KEEFE
That ’ s an obvious one , and we kind of already knew that , but given the circumstances , we didn ’ t really have a choice — or we felt we didn ’ t . And two , the big thing was just push everything through online , because that ’ s the only way we can filter things ,” says Wanka . “ We ’ ve got all kinds of fraudulent transactions online all the time . But we ’ re able to see that , say , the CVV doesn ’ t match or the billing address doesn ’ t match and then we ’ re able to call the customer and say , ‘ Sorry , this is weird but we ’ re going to call your bank , so can you give us some more information ?’ and all we do is call their bank and just say , “ I have this number from this customer who bought something in my store . Are you able to tell me if this billing address matches ?’”
“ When we first went online , I ’ m talking years ago , that is when it really came to light that there ’ s actually dishonest people out there . So , early on , we didn ’ t have any systems in place and we were just taking online orders and we would get hit 30 or 60 or 90 days later with a bank chargeback saying there was a fraudulent transaction ,” remembers Rudi Brouwers , COO at Cosmo Music , the Richmond Hill , ON-based MI superstore . Over the years , Brouwers has ( unfortunately ) had a lot of experience dealing with thefts and fraudulent transactions , and in working with regional police to catch the criminals .
CANADIAN MUSIC TRADE 21