Avoiding Fraud

Some tips to avoiding fraud are:

  1. Secure account numbers and information.
  2. Safeguard your personal identification number (PIN). Do not write it down — memorize it. Do NOT share your PIN.
  3. Monitor your card during transactions. When the card is returned, check to make sure it is indeed yours.
  4. Make a list of account numbers with key contact information, in case you need to report a lost or stolen account.
  5. Immediately report lost/stolen accounts and/or any questionable charges.
  6. Sign the back of a new card as soon as you receive it. If you do not receive a replacement card before the expiration date of the older card, contact the bank.
  7. Destroy unwanted or expired cards and shred (or secure) monthly statements and receipts.
  8. Always verify charges appearing on your monthly statement. Note that online statements provide a faster, more efficient way to check for fraudulent activities.
  9. Unless you initiated the purchase, NEVER give your account information over the telephone, through the mail, or on the Internet.
  10. Consistently check your account for accuracy of personal and billing information. Notify the bank if your personal information and/or address needs updated.
  11. Never let a telemarketer or salesperson pressure you into agreeing to a deal.
  12. Be aware of common scams. If you are unsure of a situation, please contact your A/OPC or the bank.
  13. Examine your credit report at least once a year.
  14. Update the anti-spyware and anti-virus software on your computer.

Understanding Account Holder Misuse and Fraud

Fraud can be defined as a deception deliberately practiced with the motive of securing unfair or unlawful gain. Specific to our topic here, fraud can be an attempt to cheat the Federal Government and corrupt its agents by using GSA SmartPay accounts for transactions not part of official government business. Fraud can come in many disguises, such as false emails, mail, or phone calls. Likewise, intentional misuse of a GSA SmartPay account by the account holder can result in fraud. The employing agency of an account holder who misuses the account or who participates in fraud may cancel the purchase account and take appropriate disciplinary action against the employee.  In the case of account misuse, the employee will be held personally liable to the Federal Government for the amount of any unauthorized transaction.

Depending on the facts involved, an employee may be subject to fine or imprisonment for action relating to purchase account misuse and fraud.  Employees issued an account have a responsibility to use the account to procure supplies and services at the direction of the agency under official purchase authorization.  Examples of misuse include:

  • Purchases that exceed the account holder’s limit,
  • Purchases not authorized by the agency,
  • Purchases for which no funding exists,
  • Purchases for personal consumption,
  • Purchases that do not comply with the FAR and/or other applicable procurement statutes and regulations, and
  • Purchases billed by the merchant but not received by the agency.

There are guidelines and procedures for disciplinary action to be taken against individuals for the improper, fraudulent, or abusive use of the purchase account. Purchase account misuse/ fraud may have the following potential consequences:

  • Counseling,
  • Cancellation of purchase account,
  • Notation in employee performance evaluation,
  • Reprimand,
  • Suspension of employment,
  • Termination of employment, or
  • Criminal prosecution.

Understanding Non-Account Holder Fraud

Non-account holder fraud involves the use of the purchase account or account holder data by an unauthorized person.  Non-account holder fraud is investigated by special units within the banks.  Any information acquired that relates to non-account holder fraud should be reported.  The risk of non-account holder fraud is higher in certain situations including:

  • Account/Card never received – A new or replacement card has been mailed to the account holder but was not received.  This may be due to a third party interception.  In this case, the account should be cancelled and new card issued. 
  • Lost or Stolen Account/Card – If the account holder reports the account as lost or stolen, the account will be cancelled and new one issued.  Reporting the account as lost or stolen does not relieve the Federal Government for payment for any transactions that were made by the account holder prior to losing it.  If transactions not made by the account holder appear on the statement, the account holder has 90 days from the date of the transaction to file a dispute.  If it is not done within 90 days, they may forfeit their rights to dispute.   
  • Altered or counterfeit cards – This occurs when third parties obtain account information and used that information to make purchases with an altered or counterfeit card.  If the banks recognize a fraudulent pattern of use at the time of authorization, the bank will validate the use of the account with the account holder and/or suspend the account.  If transactions not made by the account holder appear on the statement, the account holder has 90 days from the date of the transaction to file a dispute.  If it is not done within 90 days, they may forfeit their rights to dispute.
  • Account takeover/ Identity theft – In this case, the account holder’s identity has been compromised and a third party has requested a new account by providing confidential information about the account holder.  Any account holder who believes that he or she may have been subject to identity theft should contact the bank’s customer-service department.  Once a determination is made that an account has been compromised, investigation is the responsibility of the bank. Unless a government employee is determined to be involved in the fraud, the agency generally does not participate in the investigation.  The account will be closed, and a replacement account opened.