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Posted 12/15/06

Fraud alert: Complicated shipping scams target water treatment dealers, well drillers, and pump installers

Staff at the Water Quality Association (WQA) was recently alerted to various complex scams targeting water treatment dealers.

Both involve fraudulent use of credit cards and overseas shipping.

One of the scams begins with contact through a hearing-impaired device, in which the caller asks a dealer if they sell a specific device. The caller asks for a price, after which, they ask what the price would be to send several overseas. In the case of the WQA member, the caller ordered four reverse osmosis units to be shipped to Ghana. The dealer obtained an estimate for shipping multiple units and relayed the total price to the caller. The caller asked to spread the cost over four different credit cards, claiming the four people were part of the company requesting the purchase.

Even though the charges were authorized, the WQA member called the credit card company, before the shipment went out, to further verify the activity. The company said that one of the cards had fraudulent activity reported, and instructed the WQA member not to ship any of the devices.

The credit card company also filled our member in on the rest of the scam. Once the items were processed to be shipped through an overseas carrier, tracking information would be provided to the customer. Once the customer possesses that number, he or she can call the shipper directly, and ask to have the shipment redirected to a US address. In turn, they ask to be credited for the difference in shipping costs, in this case, well over the cost of units being shipped. The scheme ends with the entire shipment being disputed by the customer.

In a variation on the same theme, Culligan is now warning dealers of attempts to defraud water treatment dealers, well drillers, and pump installers.

In these scams, persons have attempted to purchase reverse osmosis equipment and pumps using stolen credit cards. According to the Fraud Warning Alert being disseminated to dealers, one pump installer had $9,700 worth of product ready to ship when he discovered the order came from a stolen credit card. While the order came from someone claiming to be in Seymour, Indiana, the pumps were to be shipped to Ethiopia.

Janice Friedrich of WQA member Butler Water Systems LLC in Fairfield, Ohio, provides this account in the alert:

"We have been plagued recently with scams wanting us to send 'filters' using a credit card for payment. When you process the cards, they may or may not be declined. If it is declined they immediately give you another credit card number. The second card will have all the same numbers except the last two numbers will be different. They give you an address to send five reverse osmosis systems to Accra-Ghana, West Africa. Please understand this is a scam. If you listen, you can hear other callers in the background. It is simply a phone room."

The alert continues, "We have caller ID, and so far, the calls have been coming from Florida, Los Angeles and New York." It also contains details about the hearing-impaired version of the scam.

As one additional dealer warned, "If it smells, be very careful. It is probably rotten."

The National Federation of Independent Business offers these tips to help protect your business from credit card fraud:

Top Tips to Prevent Credit Card Fraud

  1. Get all the information related to the credit card. Have the caller provide the name – exactly how it appears on the card – along with the card number, verification number, and expiration date. Also, ask for the complete name and address associated with the account holder.

  2. Be wary of orders that use different "bill to" and "ship to" addre


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