Fraud loss is on the rise, with Canadian auto shops experiencing a significant 89 per cent increase year-over-year from 2022 to 2023, according to data from payment service provider Moneris.
One of the main culprits of this issue is “MOTO (Mail Order/Telephone Order) Tire Fraud.” It’s a scam in which a fraudster places a large order for winter tires over the phone using stolen credit card information. The orders are more difficult to verify and track because they are often shipped out of province.
“Last year, there was an almost 90 per cent increase in reported fraud losses at auto shops,” said Maria Cameron, Director of Portfolio & Process Risk Management & Collections, Moneris Enterprise Risk Management (ERM), in a statement. “A big driver of this increase can be attributed to ‘MOTO Tire Fraud,’ where fraudsters use stolen credit card details to buy tires.”
She also said fraudsters often target high-ticket items that are in-demand for easy re-sale, and that companies — especially in provinces where winter tires are mandated — should keep an eye out for this.
“Much like how customers are recommended to do preventative maintenance on their vehicle, the same applies to businesses when it comes to fraud prevention,” said Cameron in a statement. “‘MOTO Tire Fraud’ is easily avoided if you follow payment acceptance best practices. The simplest thing to do is refrain from taking payments over the phone from customers you don’t know or aren’t familiar with.”
She said companies can also ask for in-person payment at pick-up through a secure payment terminal. Or they can use a secure online payment solution with fraud prevention “baked in to help validate the customer’s identity.”
A guide from Moneris on preventing credit card fraud can be found here.
