Dolores 0:00

In this episode about point of sale scams, we're talking about the small stuff. The everyday stuff. The scams that happen at the shoptill, at the petrol station and always in plain sight. And we're discussing why almost nobody gets caught. But if you'll excuse the irony, I'll put money on it, that you've been a victim, many many times. That you're a serial victim! Edward. We spend a lot of time on this podcast looking at major frauds. Perpetrated by property developers, bankers, accountants, etc. White collar crime. Today's episode feels very different.

1:02

It is, Emily, yeah, very different. And in some ways, that's what makes it so interesting because the frauds we usually discuss, the big ones, the complex ones, those affect a relatively small number of people. What we're talking about today affects virtually everyone. Every single person listening to this has almost certainly been on the wrong end of a point-of-sale scam at some point, and probably many times. They just didn't know it, or if they did know, they didn't do anything about it.

Dolores 1:33

And that's the key thing, isn't it, they didn't do anything about it.

1:37

Exactly, and that's what makes this category of fraud so attractive to those who commit it. The amounts are small. The victim rarely notices, and even when they do notice, they almost never complain. Who are you going to call? Action Fraud? The police? To report that a barman shortchanged you on a Friday night? I don't think so. You take the hit, you shake your head, you move on, and the person behind the counter knows that. They're counting on it.

Dolores 2:05

So it's a low risk scam, low consquences, and highly repeatable.

2:09

Precisely, and when you multiply that across hundreds of transactions a week in a busy bar, a petrol station, a local shop, the amounts stop being small very quickly. This is not petty crime in any meaningful sense. It is a systematic, deliberate, ongoing extraction of money from people who are not paying attention, and I want people to start paying attention.

Dolores 2:35

You've got a number of personal examples for us today. Let's start with the first one.

2:40

So the first one goes back a good few years. I was on holiday in Greece, a group of us, out for the evening at a busy bar. It was late. It was noisy. There was music. People were packed in three deep at the bar. A classic holiday nightclub situation. You know the kind of place.

Dolores 2:58

Yes, I think everyone knows that kind of place. But can they still remember their night out!

3:03

Hopefully. So I ordered a drink, handed over the cash, a large note, and the barman handed me back the change, a small bundle of notes, and something made me stop. Maybe it was the accountant in me. Maybe it was instinct. I'm not sure which, but I counted it, and the amount of change I had got was wrong. He had shortchanged me, not by a huge amount, the equivalent of about five euro, but he had shortchanged me deliberately. I was absolutely certain of that

Dolores 3:33

How can you be certain it was deliberate?

3:34

Because of what happened next. I said, "Excuse me, I think you've shortchanged me." His English was very limited but functional, and without a word, no argument, no confusion, no checking, he simply reached into the till and handed me the difference immediately. No hesitation, no let me check. He knew exactly what he'd done. If it had been a genuine mistake, he would have checked first, but he didn't need to. He knew the amount. He just hoped I wouldn't notice

Dolores 4:04

And most people wouldn't have noticed if they had been short changed.

4:07

Most people absolutely wouldn't. Think about the environment. The last thing on your mind is carefully counting a handful of foreign currency notes in a dimly lit bar. You take the change, shove it in your pocket, and go back to your friends. And that's exactly the environment the barman relies on. He's chosen his moment perfectly. Cash transaction, no receipt, foreign currency that looks like monopoly money to most tourists maximum distraction, minimum security

Dolores 4:37

And if he's doing that to every third or fourth customer across a busy night?

4:41

It adds up very quickly. Five euro here, three euro there. Do that fifty times on a busy Saturday night, and that's a conservative number. And you're talking two hundred, two hundred and fifty euro in your pocket that nobody is going to miss and nobody is going to report. Tax-free, risk-free every week, every summer season. It's not a small amount of money over time. It's a very tidy supplementary income.

Dolores 5:08

So what's the lesson from the bar con?

5:10

Count your change every time before you walk away. Not in a confrontational way, just check it. It takes ten seconds, and if it's wrong, say so immediately and calmly. Nine times out of ten, they'll correct it on the spot because the last thing they want is a scene. They want you to walk away quietly.

Dolores 5:30

And your next example of being the victim of a small-time point of sale scam is at the petrol station.

5:36

Now this one is interesting because it involves a card payment rather than cash. And I think that card payments have made people significantly more vulnerable to point-of-sale fraud, not less. Because with cash, there's a physical transaction. You can see what's happening. With a card, it's invisible. The number appears on a screen. You tap or insert your card or your phone, and off you go. Most people don't even look at the amount before they approve it

Dolores 6:04

Guilty as charged, I'm afraid. You're not alone, Emily, and almost everyone does it. Anyway, I went into a petrol station, filled up the tank, picked up a few bits from the shop, and bought some lottery tickets at the counter, paid by card. The amount came up on the screen, I paid. But I always, always ask for an itemized receipt. It's a habit. The person behind the counter looked at me as though I'd asked for something slightly unusual, which tells you something in itself. But they printed it, I took it, I went back to the car. And you looked at the receipt? I looked at it, and there it was. The lottery tickets had been charged twice. Ten pounds worth of lottery tickets charged twice. So ten pounds for tickets I never received. Now, on a receipt that includes eighty odd pounds of petrol and a handful of other bits and pieces, that's easy to miss. You're not mentally adding up the total in the petrol station. You're thinking about where you're going next. You're running late, which is precisely what they rely on. So you went back in to speak to the cashier? Sure did. I went straight back in, showed them the receipt, pointed out the double charge, and same as the bar in Greece, no argument, no checking, no confusion. Ten pounds cash handed back to me immediately from the till, which raised an interesting question in my mind. Which was? Well, I'd paid by card, so h-how and why were they giving me cash back? Because if the charge had been a simple scanning error, the logical thing would be to reverse the card transaction. But they didn't do that. They handed me the cash from the till, which tells you something about the mechanics of what they're actually doing. My suspicion, and I think it's well-founded, is that when they double scan a lottery ticket, they take that second ticket for themselves. The system records two sales, one for the customer and one effectively for them. If someone comes in and catches them, they hand back the cash from the till, which they can then replace out of their own pocket later, and the discrepancy disappears. If nobody catches them, which most of the time nobody does, they've got themselves a free lottery ticket, or two or ten across a busy day of transactions That's actually quite a clever scam, in a depressing sort of way. It is. And it's not limited to lottery tickets. If they have double-charged some other goods, they've got those items for free for their own personal consumption later. Any item that can be scanned twice and pocketed, cigarettes, scratch cards, high-value confectionery, is vulnerable to the same technique. The card payment environment makes this easier, not harder to get away with because people simply do not check. The money feels abstract. It's going out invisibly, and unless you get the itemized receipt and actually check, you'll never know. So what is the scale of this type of fraud at petrol stations and convenience stores and the like? Significant. The evidence suggests it's widespread and growing. Double charging, scanning errors that aren't errors, these are well documented. And because the amounts per transaction are small, and because the overwhelming majority of customers never check, petrol stations and the shops attached to them are amongst the most fertile grounds for point-of-sale fraud that exists. You pull in, you're in a hurry, you pay, and you go. Perfect What I will say is this: the evidence we do have suggests that this type of fraud has been increasing significantly in recent years. As cash has declined and card payments have become universal, the opportunities have multiplied rather than diminished. New forms of payment because of technology, contactless, phone-based, app-based, create new vulnerabilities, and the consumer's engagement with their own spending has, if anything, become more passive rather than less. We pay faster and check less. And so on to your next example. And this one feels different from the others. It is different because in the bar, at the petrol station, the scam happens at the moment of payment. You can catch it if you're paying attention. With car servicing or any service where an expert is examining something you can't easily see for yourself, you're in a fundamentally different position. You're not just dealing with a point of sale, you're dealing with a point of trust Explain what happened. Well, I brought my car in for a service and an MOT to an authorized car service center. Standard stuff. And as always happens, they came back to me with a list of things that needed doing, some of which were going to affect the MOT result, some of which were advisory. Suspension components, a dust cover, various bits and pieces underneath the car that I had absolutely no way of verifying myself without lying on the ground with a torch So I agreed to those items because I had to take their word for it, and some of them were going to fail the MOT. But then on the list was an item about the windscreen washer fluid dispenser. They were saying that there was a crack in the pipework, it wasn't working, and they needed to replace the whole unit. About eighty pounds to fix when you include labor. And here's the thing, I knew that wasn't right. I knew it for a fact because I knew the washer fluid was simply empty. I'd been meaning to top it up for weeks. There was nothing wrong with the pipe or the dispenser. It had run dry. That was all. So you challenged it? Yep. I said, "No, I'm not agreeing to that item. There's nothing wrong with that dispenser. It's out of fluid, that's all." And you could almost hear the pause at the other end of the phone. They said they'd check with the mechanic, and when I picked up the car, that item had been quietly removed from the bill. I filled the washer fluid reservoir myself afterwards. Job done. So you saved yourself an overcharge of eighty pounds? Yes, that's right. And I only called it because I happened to know what the actual problem was. If I hadn't known, if it had been something I couldn't diagnose myself, I'd have paid eighty pounds without question. And that's the point. The car service environment is uniquely vulnerable because the expertise gap between the mechanic and the customer is enormous. They know what's under the car, you don't. They speak the language of suspension geometry and brake pads and differential seals, you don't. And that knowledge gap is, for some garages, an open invitation. And the surveys suggest this is extremely common? Extremely common. A significant majority of drivers, and the figures on this are quite striking, report either fearing they've been overcharged at a garage or believing they've been sold repairs they didn't actually need. It's one of the most distrusted service environments in customer experience, and that distrust is not irrational. It's based on experience, personal experience, the experience of family and friends, and a general awareness that this goes on all the time. The particularly insidious thing is that it's not always the individual mechanic doing it. Sometimes it's a garage policy, a quota of upselling, an expectation that service advisors will add items to the list. The individual at the counter may not even think of it as fraud. It's just the way the business works, which of course makes it no less of a scam Okay, so let's talk about the psychology of this. Because these are not the fraudsters we usually discuss on this podcast. These are not masterminds. These are people working ordinary jobs. And that's what makes this psychologically fascinating because the people committing these point-of-sale scams have, in most cases, completely rationalized what they're doing. They're not losing sleep over it. They're not thinking of themselves as criminals. In their minds, they're doing something small, something victimless, something that nobody is really hurt by. Every little helps, as the saying goes, and they've applied that sales jingle to their own supplementary income. Ha, using the sales slogan as justification for fraud. Edward, that's quite something! It sure is, and the rationalization runs deep. They're not hitting any one person hard. The bar customer is having a lovely holiday. They can afford a few extra euro. The petrol station customer just spent eighty pounds on fuel. They won't notice ten more. The garage customer agreed to four hundred pounds of car repairs. What's another eighty? Each individual act feels inconsequential. And because the victim almost never complains because they've either not noticed or decided it's not worth the hassle, there's no feedback, no consequence, no correction. The behavior is reinforced every single time it works, which is most of the time. And from the customer or consumer side, why do we, let it happen? Several reasons. The first is distraction. These scams are designed to happen at exactly the moment when you are least focused, when you're tired, when you're busy, when you're in a hurry, when you're somewhere noisy or unfamiliar. The environment does half the work for them. The second is the invisibility of card payments. We've moved into a world where money feels abstract. You tap your card or your phone, a number flashes on the screen, and it's done. You've spent money without really seeing it leave your bank. What's now considered to be old-fashioned physical transaction, counting notes, checking coins, that focus the mind in a way that contactless payment simply doesn't. And the next reason why we let this happen? I think deep down, a lot of it has to do with social conditioning. We're conditioned not to make a scene, not to be a difficult customer, not to hold up the queue, not to question the expert. From childhood, we're taught to trust the professional, accept the advice, pay the bill, and move on. Challenging a mechanic, querying a receipt, counting your change in front of the barman, these things feel awkward, confrontational, rude even. And that social discomfort is a gift to anyone who wants to take a little extra from you. So we're complicit in our own fleecing? To a degree, yes. Not willingly, but through passivity, and passivity can become very expensive over time. You've given us the bar, the petrol station, the local shop, the car service centre. Are there other everday situations where people are just as exposed and being exploited? The restaurant. Restaurants are another place where overcharging, whether intentionally or unintentionally, can occur. And this one happened to me just recently, actually. It's very fresh in my mind. I was dining out abroad as it happens, but this applies just as much at home. When the bill arrived, I did what I always do. I read it, every line, and there was an item on there that I didn't recognize, something I hadn't ordered. It turned out to be a bottle of wine and a fairly expensive one at that. We're talking about something in the region of twenty percent of the total bill. Twenty percent. That's not a rounding error! It's not. I called the waitress over calmly, no fuss, and said that I wasn't sure what that item referred to. She took the bill away. Two minutes later, she came back with a revised bill, apologized, said there had been a mistake, and that was that. I paid the lower amount, thanked her, and we moved on. Now, was it intentional? Was it a genuine error? I honestly don't know. And the truth is, it doesn't really matter. Whether it's deliberate or not, I was about to be charged for something I hadn't ordered. The effect is identical. And most people would not have caught the error. Most people absolutely wouldn't. Think about the end of a restaurant meal. You've eaten well. You've had a glass or two of wine. You're with your friends or family. There's conversation going on. The last thing anyone wants to do is sit there with a calculator working out whether the bill is right. In a larger group, it's even worse. Different people have ordered different things. Someone has had a starter. Someone didn't. There may be service charge automatically added. It becomes genuinely complicated. And the restaurants and the staff know that. The bill arrives. Someone glances at the total, someone taps their card, and everyone heads for the door But not you! I always review my bill or check, whatever you like to call it, before I pay. I've made a habit over the years of always doing that. I'll even do it when I'm with guests. I'll make some casual remark about it. Say something like, "Bear with me, I'm an accountant" and I'll have a look through the bill. Ninety-nine times out of a hundred, everything is perfectly correct. But that one time it isn't, as happened recently, and I'm, then I'm glad I've looked because the money is better in my pocket than in the restaurant's till for a bottle of wine I never drank And this leads into a broarder discipline, doesn't it? Exactly. Verify what you're being asked to pay every time, everywhere. It takes moments, and it costs nothing. The alternative is paying for things you never had and never knowing that you've been overcharged. You also mentioned credit card statements. And there is another discipline you have here, right? Yes, this is something I feel strongly about, Emily. I have a very simple system. Every time I make a credit card transaction, I ask for a receipt. I come home, and I record it. I write it down, the date, the description, the amount, on a simple running sheet. When my monthly credit card statement arrives, I reconcile every entry against my sheet line by line, tick by tick. It takes perhaps ten minutes a month, and it has saved me money on more than one occasion. I suspect our listeners will find your attention to detail either very impressive, or mildly alarming! Possibly both! Some of my friends certainly think it's amusing. I'm the one at the restaurants checking the itemized receipt while everyone else is heading for the door. The cashier at the petrol station staring at me slightly blankly because I've asked for a printed receipt, and they're not used to being asked. But here's the thing, it works because when something appears on your credit card statement that shouldn't be there and you do the reconciliation exercise, you find it, and it does happen. Mistakes are made, Erroneous entries do appear. Can you give us an example. I had a credit card statement arrive with a charge for an internal flight in a country I have never visited, a significant charge, several hundred pounds for a flight that had absolutely nothing to do with me. Someone, somewhere had obtained my credit card details and used them. Anyway, I called the card company. The charge was reversed. The card was canceled and replaced. Inconvenient, but caught, and caught only because I was checking the statement against my own records. On another occasion, I was traveling through an airport. I used my card for a purchase, and when the statement came through weeks later, there was an additional charge that I didn't recognize and didn't match up with my listing. My card details had been compromised somewhere in the airport transaction chain. Again, I caught it. It was reversed, but only because I was looking And most people don't look at the details. Most people look at the total on their credit card statement and think, "Does that feel about right?" And if it does, they pay it. That is not checking. That's guessing, and it's a very expensive way to manage your finances. Edward, what are the practical takeaways today for our listeners? Three things. Three simple things. First, when you pay cash, count your change before you walk away every time. It's not rude. It's not confrontational. Second, ask for an itemized receipt whenever you're buying more than one thing. At the petrol station, at the supermarket, at any till where multiple items are being scanned, glance at it before you leave. It takes ten seconds. Third, check your credit card statement properly, not the total, every line. If something doesn't look right, call the card company. Final thoughts, Edward? You are not being difficult by checking your change. You are not being awkward by asking for a receipt. You are not being paranoid by reconciling your credit card statement. You are being a responsible adult with your own money. It just comes down to paying close attention. The devil is in the detail, and it's worth every penny. Remember Every little helps Thank you for listening today. We hope you have found this episode to be useful. This brings us to the end of season one of the Fraud Files podcast. Edward will be back in a couple of weeks for more riveting episodes in season two. So until then, stay alert, and stay vigilant.

Simon 23:25

Fraud Files is produced by Rock Solid Pods. Fraud Files is available on Spotify, Amazon, Apple, You Tube and wherever you get your podcasts.