Bulk tire credit-card scam gains traction at Edmonton auto shops

Edmonton police are urging businesses to be vigilant after a credit-card scam made the rounds at local auto shops last year, defrauding one retailer of $36,000 in a single transaction.

Eight incidents of the scam cost local retailers more than $70,000 last year

How an Edmonton business owner avoided a $22,000 scam

6 years ago
Duration 1:53
Lloyd Darius, owner of Award Automotive, made a few extra phone calls to prevent being taken for $22,000 in a tire credit card scam.

Credit-card scammers who prey on local auto shops defrauded one retailer out of $36,000 in a single transaction last year, Edmonton police say.

The scammers used stolen credit cards to try to buy tires in bulk over the phone, said investigator Linda Herczeg, a detective with the economic crimes section.

Police investigated eight cases where fraudulent credit cards were used for bulk tire purchases in 2016, with a total loss to Edmonton retailers of $70,485.

One local shop was hit twice in the same month, for a total loss of $8,360, police said in a statement.

"It's slow times economically," Herczeg said. "People are out of work. People are capitalizing on the opportunities to take advantage of people. And businesses are slow, so they are wanting the profit and they are wanting the sale."

Linda Herczeg, a detective with the Economic Crimes Section says there's actually a 50 per cent increase in credit card fraud from 2015. (David Thurton/ CBC)

Police believe the same group of people may be involved in a series of tire scams across northern Alberta, including 13 fraudulent purchases in Boyle last year worth a total of $141,000.

Const. Sean Milne with the RCMP serious organized crime branch said officers are investigating to see if the tire scams are linked.

But Milne said there seems to be no specific reason criminals are targeting auto shops. 

"Scammers tend to be indiscriminate in what they go after," Milne said. "So if it is tires one day, it could be construction supplies the other. Anything they can sell on Kijiji could be a possible target for fraud."

Lloyd Darius, owner of Award Automotive in Edmonton, thinks he was targeted by the scam.

Just before Family Day long weekend in 2016, he got a call from a man who wanted to buy 52 specialized off-road truck tires for an oilfield company. The customer offered to give his credit card details over the phone and send a courier to pick up the order.

Darius was suspicious and decided to do his own research. He realized the company existed but the credit card did not.

When confronted by Darius, the caller promised to take his business elsewhere and hung up.

'It was too good to be real'

Concerned about the caller, Darius spoke to his tire supplier and learned that another shop in the area purchased the same 52 tires for a customer, but was on the hook for the cost of the tires because the credit card was stolen.     

"It was too good to be real," Darius said. "Especially in a slow economy, a $22,000 one-shot tire deal in a day? Let's face it, that's going to pay all your rent and utilities for the month."

Police are reminding businesses to be cautious with credit card purchases and report any suspicious activity to the EPS crime prevention office or Crime Stoppers. 

"If someone is calling you over the phone and they want to do a credit card purchase and you haven't done business with them before, you want to be cautious," Herczeg said.

Credit card payments should only be accepted, Herczeg said, if customers correctly enter their pin or present ID that matches the name on the card. 

With files from David Thurton