Farm dealer outlines how to protect yourself from new scam in credit card fraud

TEESWATER — An Ontario farm equipment dealer was recently swindled out of a $4,000 tractor part by a scammer who bought the salvaged John Deere rear end over the phone with a fraudulently obtained credit card number. The transaction went through as smooth as butter. But two months later — long after the part shipped and the buyer took delivery — the legitimate credit card holder discovered the fraud and the payment was retroactively withdrawn from the victimized dealer. By then, the U.S.-based buyer and the illicitly acquired part were, of course, nowhere to be found.

Matt Ireland of Teeswater Agro Parts says his family’s Bruce County business is also out the nearly $800 cost of shipping the part to a small house outside rural Cloquet, Minnesota.

Ireland said the shop routinely sells and ships parts ordered by telephone and occasionally runs into buyers unable or unwilling to pay. What’s frustrating in this case is that payment was actually received. “We always make sure we get paid before we ship, but this is probably the first one in 10 years where we did get paid and now … it’s just gone,” he said.

Ireland said the buyer called in November about the compact-tractor rear end advertised in Agdealer. The caller had a Middle Eastern accent and claimed to be representing a Montana parts business. He wanted the part shipped directly to his “customer” located the next state over, in Minnesota, “which I didn’t think was a big deal,” Ireland says. “We do that all the time, direct-ship to your customers, so they don’t have to wait for it.”

The business mentioned by the caller seems to be a real outfit and in retrospect, the caller may have been spoofing their telephone number (faking a phone number in call display), though Ireland can’t say for sure. “Their phone number comes up, and I can call them today,” he said. But the Montana business he calls denies any knowledge about the John Deere part and told Ireland they never employed the caller he spoke to.

Ireland says that police in Minnesota and Ontario have been informed.

The scam came to light when the compromised credit card holder noticed more than $12,000 in unauthorized charges on his account in January, he said, including the purchase from Teeswater Agro Parts. Ironically, the owner of the card is another equipment dealer located just up the road from Ireland. His card number had fallen into the wrong hands after doing business elsewhere. When he inquired with Ireland about the charge, “we looked up the amount and sure enough, this other company (in Montana) had used their card, and when we called them, they said, no, this guy (the scammer) doesn’t work here,’” Ireland said.

“There’s a lot of fishy stuff and a lot of answers we’re still waiting for.”

It was also surprising to Ireland to learn that his payment processor, Moneris, was able to reverse the transaction and take back the money so long after the fact.
It’s a quandary because the operation relies on dependable credit card payment, especially when shipping directly to American farmers. Wiring money directly from U.S. banks is a pain for those customers and sending cheques is too slow as parts are usually needed as soon as possible, he said. Cheques, for that matter, are increasingly frowned upon by security experts. Jonathan Neutens, head of agriculture at Alberta’s ATB Financial, recently advised farmers to stop using cheques because that’s become the largest source of fraud, The Western Producer reported.

The OPP has also issued recent fraud warnings for people selling items online, emphasizing the need to receive actual payment before shipping — although Teeswater Agro Parts did exactly that and still was defrauded.

In the meantime, Ireland said he’s taking extra precautions to verify the identity of new customers. He has recently used Google Maps to find other nearby businesses, which he calls to verify that the buyer is legitimate. “We did that just this week,” he said.

On the other hand, that’s harder with individual farmer customers. “I don’t mind calling the odd business, but … if a random farmer from, say, Vermont calls me and gives me a credit card, how am I supposed to know that’s valid or not?”

He added, “How do you do a background check on a new farmer down there? You’re not going to call his neighbors and ask him if he’s a solid guy or not, because that doesn’t look good as a business, right?”