Credit Card Fraud Targeting Local Merchants

The Financial Reporting Authority (FRA) has received an advisory from the Cayman Islands Bureau of Financial Investigation (CIBFI) of the Royal Cayman Islands Police Service (RCIPS) regarding individuals travelling to the Cayman Islands to commit credit card fraud against local merchants using Point of Sale (POS) terminals.

Merchants using POS terminals in the Retail and Tourism sectors have been increasingly targeted by credit card fraudsters operating within this jurisdiction. Extra caution is advised with respect to receiving payments via POS terminals, specifically with respect to allowing customers to key in card information or otherwise allowing customers to access the POS terminal unobserved by Merchants.

Please find below the modus operandi of the fraudsters.

Individuals are understood to be travelling to the Cayman Islands for the specific purpose of purchasing high value items using stolen credit card information.  They are then seen to make initial ‘insincere’ attempts to pay for items using physical payment cards or near-field communication (NFC) /radio-frequency identification (RFID) enabled devices (e.g., Apple Pay/Google Pay) before manipulating physical control of Merchants’ POS terminals. Once control of the POS terminal has been obtained, these individuals working in groups of 2 or more to distract sales staff, manually enter stolen credit card information themselves.