Thieves manipulate retail supply chain

via Thieves manipulate retail supply chain

“Organized retail crime” is one of those things of which most of us remain blissfully unaware. While for most of us, the term “organized crime” conjures images of Tony Soprano and Vito Corleone, the true purveyors of organized retail crime activities likely wouldn’t stand out in a crowd of businessmen or your neighbors.

But organized retail crime has become a major menace on the American business landscape. According to a survey released this week by the National Retail Federation, more than eight in 10 businesses have reported an increase in losses from it, with those losses reverberating through the economy in the form of higher prices, more restrictive policies and increased security measures.

Loosely, the term “organized retail crime” refers to any criminal activity that involves more than a single individual and seeks to steal merchandise, information or resources from businesses. These crimes might involve someone hiring thieves to steal certain items for resale on the black market, manipulating store return policies to steal merchandise, or stealing cargo bound for your neighborhood retail store.

“Retailers continue to deal with the challenges that come with fighting organized retail crime,” said Bob Moraca, the NRF’s vice president of loss prevention. “Every day, criminals are getting more creative in the ways they manipulate the retail supply chain. Combating ORC is a full-time job, and it is a constant battle industry-wide for retailers large and small to stay one step ahead of these savvy criminals.”

In the NRF’s 12th annual Organized Retail Crime Survey, the organization asked 59 senior retail loss prevention executives whether they’d experienced losses from ORC in the past year. For the first time in the survey’s history, all of them reported losses from organized retail crime activities.

Among the 83 percent who reported their losses had grown, the average loss was $700,259 per $1 billion in sales, a significant increase from $453,940 last year.

Organized retail crime gangs often use storefronts, pawn shops, flea markets and kiosks to fence stolen goods, and 63 percent of those surveyed said they had recovered merchandise from a physical location. But many criminals turn to the Internet for the anonymity it offers — 58 percent of retailers said they had identified stolen merchandise from an e-fencing operation.

Criminals are also finding ways to manipulate store return policies. According to the survey, 68 percent of respondents said they had experienced thieves taking advantage of generous return policies and returning stolen merchandise for store credit, then selling the credits to secondary-market buyers.

Four new states have enacted ORC laws in the past year, bringing the total nationwide to 34. But the survey found that 56 percent of retailers in states with organized retail crime laws said they had seen no increase in support from law enforcement, the highest in the survey’s history. Retailers continue to support creation of a federal organized retail crime law, which is backed by 79.7 percent of those surveyed.

Cargo theft continues to take a rising toll on retailers. The most common place for cargo theft to occur is when merchandise is en route from the manufacturer to a retailer’s warehouse or from the warehouse to a store. Often, according to Loss Prevention Magazine, thieves will stake out a truck on its way to a retailer, then steal the truck when the driver leaves the truck to refuel, eat or go to the restroom. In an article on its website, LPM’s John Tabor noted that the average value of a shipment in transit in 2013 was $300,000 (sometimes much more), making it a lucrative crime. And since most retailers depend on trucks for at least part of their supply chain, it affects nearly all retail sectors.

Tabor noted the most effective responses to such crimes include increased security measures for trucks on the road, thorough vetting of personnel involved in the shipments and innovative programs working with law enforcement that use technology (such as embedded GPS devices). Most industry experts call for more stringent laws and regulations to address the growth of organized retail crime, which ultimately affects all of us.

“Organized retail crime continues to impact retailers at a larger scale now more than ever before,” said Jonathan Gold, NRF vice president for supply chain and custom policy who heads the organization’s lobbying efforts on organized retail crime. “ORC also poses a threat to unwitting consumers who may purchase stolen merchandise that is not stored properly or may have expired. It is critical for our industry to continue pushing for strong federal legislation that would properly define ORC and make it a federal crime. Until there is a federal ORC law to counter this increasing criminal activity and the ability to transport stolen products across state lines, it will be nearly impossible to put a dent in this $30 billion-a-year problem that threatens retailers, the economy and consumers across the country.”

Credit card skimmers targeting Mississippi

via Credit card skimmers targeting Mississippi

PDF: the_clarion-ledger_state_20161010_a003_1

ATM skimmers have been around for decades. Security experts have long warned us about these devices, which use technology attached to an Automated Teller Machine or a Point-of-Sale terminal to steal information from consumers as they enter data.

The technology has usually been crude — one tactic has been to stick a device to the outside of an ATM located in a casino or convenience store, with crooks often putting an “Out of order” sign on nearby ATMs to direct victims to use a single machine. Thieves would collect data for a few days, then move the device somewhere else and start all over again. Often, cameras would be mounted nearby, recording the keystrokes when consumers entered their Personal Identification Numbers.

But the technological arms race between crooks and security-minded companies has yielded new technologies, and with it more brazen activities to get your money. One piece of technology uses a device installed inside the machine, making it undetectable unless the machine is opened. The tech website Gizmodo.com wrote last month about how these devices are starting to proliferate in the U.S. Skimming activities reap billions each year for thieves, U.S. Secret Service notes.

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And for us here in the Magnolia State, it has hit home with a vengeance recently.Several skimming devices have been found inside ATMs and gas pumps at metro-area gas stations, putting law enforcement on alert. Mississippi Attorney General Jim Hood issued a news release last week to warn Mississippians about the danger.

“These devices may go undetected for weeks, all the while gathering sensitive account information from unsuspecting consumers,” Hood said. “Consumers need to call their financial institutions immediately if they see any unauthorized activity on their accounts, and watch closely for signs of tampering when using gas pumps or ATMs. In the meantime, our office will continue working with other law enforcement agencies in Mississippi to shut down this type of crime.”

Although ATM operators and financial institutions are taking action to protect the ATMs from tampering, Hood suggested some actions you and I can take to avoid becoming a victim:

  • Use pumps closer to the entrance to the service station or convenience store. Skimmers generally target pumps that are most isolated from security.
  • Avoid paying at the pump. Go into the store and pay the attendant directly.
  • If you’re using a debit card, select the “Credit” option, rather than the “Debit” option. This will avoid the possibility of thieves getting your Personal Identification Number.
  • Check with your gas station management as to how they’re checking for devices.

The online security website Krebs.com also recommends that you cover your hand if entering your PIN, to avoid your PIN being recorded by a nearby camera. Always use a wall-mounted bank ATM, rather than a stand-alone device, and never use an ATM located in a secluded spot, especially at night.

And as always, keep a close eye on your bank account balances and activities. The sooner you identify and report suspicious activity, the better.