Unauthorized tap-to-pay fraud increasing

According to frankonfraud.com, there is a rise in donation “Tap to Pay” fraud where consumers are approached in a parking lot (Target, WalMart, etc.) by individuals (scammers) requesting a small donation to help with <insert any sob story>.

The victims believe they are donating $10 or $20, but the scammer is manipulating the transaction and billing them for thousands. Technically, these transactions were authorized by the consumer but processed for the wrong amount.

CFPB Electronic Fund Transfers FAQs state, “Unauthorized EFTs include transfers initiated by a person who obtained a consumer’s access device through fraud or robbery and consumer transfers at an ATM that were induced by force. Comments 2(m)-3 and 4.”

Do these transactions fall under Reg E or under Visa/MasterCard Zero Liability protections? Financial institutions should be careful in how they process these disputes to avoid regulatory criticism or chargeback declines for improper filing.  Consistency in how you handle Reg E disputes is important!

Here are some related articles for more information:

• Scammers reportedly using ‘tap to pay’, credit card transactions to take thousands from shoppers.
• Couple gets scammed for $4,500 upon entering Chicago store, man thrown by car in confrontation – CBS Chicago.