Detecting Fraud

As a program coordinator, it is your responsibility to train account holders about how to detect fraud.  Have the account holder check their billing statement for:

  • Transactions they do not recall making;
  • Purchases from unknown vendors; and,
  • Account withdrawals they do not remember making.

It is also the responsibility of the program coordinator to monitor the account holders for instances of internal fraud or improper use of the card.  Below is a checklist of questions to highlight indicators that may point to account holder fraud.  Keep in mind, these are only indicators.  Merchant Category Codes (MCCs) are often used to highlight transactions requiring further investigation.   While a transaction with a merchant in a questionable MCC may initially raise questions, further investigation may reveal that the transaction was a legitimate purchase or that the merchant was misclassified.

  • Does the transaction fall within a bolded merchant category code in the MCC table?
  • Does the merchant name appear to be outside the cardholders’ general area of responsibility?
  • Does the account holder have several transactions with the same merchant within a short time frame, and does the amount of transactions total more than the simplified acquisition threshold?
  • Has the account been closed due to fraud and a new card issued?
  • Has the account holder disputed transactions on a frequent basis?
  • Has the account holder had multiple declined authorizations?
  • Does the account holder have transactions occurring on non-working days?
  • Does the account holder have higher than normal expenditures during the billing cycle?
  • Has the dollar limit on the account been raised during the billing cycle?
  • Has the contractor been debarred by the Federal Government? (see System for Award Management for a listing of excluded parties)
  • Is the account holder unable to provide receipts?
  • Does the account holder have multiple transactions of even dollar amounts? (e.g., $20, $100)
  • Has the account holder allowed others in the office to use his/her account for making purchases?
  • Does the account holder have recurring purchases of a high dollar value?
  • Does the account holder have transactions with two merchants with two different names but same address and owner?
  • Does the account repeatedly do business with the same merchants (minimal rotation?)
  • Does the account holder make repeated purchase close to his/ her single purchase limit?
  • Does the account holder consistently hit his/ her monthly limit?
  • Does the merchant address appear to be a home address?

The GSA SmartPay® program provides charge cards to agencies/departments throughout the U.S. government, as well as tribal governments, through master contracts that are negotiated with major national banks.

SmartPay® Charge Cards are for Official U.S. Government usage only.


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