Detecting fraud

As a program coordinator, it is your responsibility to train your cardholders about how to detect fraud.  Some tips to suggest include:

  • Looking for transactions they do not recall making;
  • Checking for unknown vendors; and,
  • Searching for account withdrawals you do not remember making.

It is also the responsibility of the program coordinator to monitor the cardholders for instances of internal fraud, or improper use of the card.  Below is a checklist of questions to highlight indicators that may point to cardholder 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 cardholder have several transactions with the same merchant within a short time frame, and does the amount of transactions total more than $3000?
  • Has the account been closed due to fraud and a new card issued?
  • Has the cardholder disputed transactions on a frequent basis?
  • Has the cardholder had multiple declined authorizations?
  • Does the cardholder have transactions occurring on non-working days?
  • Does the cardholder 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 https://www.epls.gov for listing)
  • Is the cardholder unable to provide receipts?
  • Does the cardholder have multiple transactions of even dollar amounts? (e.g., $20, $100)
  • Has the cardholder allowed others in the office to use his/her card for making purchases?
  • Does the cardholder have recurring purchases of a high dollar value?
  • Does the cardholder have transactions with two merchants with two different names but same address and owner?
  • Does the card repeatedly do business with the same merchants (minimal rotation?)
  • Does the cardholder make repeated purchase close to his/ her single purchase limit?
  • Does the cardholder 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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