Glasgow auction house McTear’s have scrapped payments over the phone in a bid to tackle credit card fraud. They now use an online system, which they say customers prefer and is safer all round.
McTear's, who believe they could be the
first auctioneers to make the move, have launched the new system
after they fell victim to a con last December which cost the firm a
five-figure sum in jewellery, as well as another attempted fraud in
that same week.
Brian Clements, who owns McTear's, told ATG
that he would "absolutely" recommend other auctioneers to follow
suit.
He finally made the decision to scrap phone
payments after one fraudster started harassing his staff over a
Rolex watch worth more than £6000.
"The guy ended up being really abusive to
the girls in the office and I took the telephone over and said to
him - I knew what was going on at that point - 'I'll refund it to
your card', but he started reading off a number that was not
anything to do with the card it had been paid with," he said.
"That essentially was that. We took a
decision as a company not to take any payments over the telephone,
by credit or debit card, because you are totally open.
"The only people that will lose are the
auction house in this scenario.
"As a private indvidual, even if you've had
your card stolen, or been careless about it, it doesn't matter,
you're still protected, and the credit card company, they never
lose. It is always the auction house that loses.
"It's at your peril if you take payments
over the telephone for anything, and even with existing customers
now we don't take payment over the telephone."
Online Payments
McTear's stopped taking such payments in
January but didn't want to rely on bank transfers because the
process can be cumbersome. This meant committing to online
payments.
Any fears that scrapping phone payments
might put some customers off proved unfounded, said Mr Clements. He
has been delighted with the reaction so far, and says many people
were, in fact, uncomfortable with reading out their card details on
the phone.
"The reaction has been very, very
favourable," he said. "I'm uncomfortable personally reading out my
card number if I'm paying for something over the telephone, to a
company that I might be dealing with on the first occasion. You are
giving them all the details: card number, expiry date, name,
three-digit code, so it's all there for people to use.
"I would say in terms of putting people off
it is the contrary. It is actually a much securer way, not only for
us but for the bidder.
"Ultimately their card details are going
into a system we have access to, but they are completely safe - and
really this kind of payment system is commonplace in internet
purchases anyway, if you go and buy something at Amazon for
example."
The auction house uses a system operated by
a firm called Sagepay, which involves paying a fee, but Mr Clements
said the overall start-up cost was about £400, a minimal sum in the
context of the thousands that can be lost through fraud.
It had taken some time to arrange, though:
"It is not an overnight set-up, it will take you at least several
weeks to get it… not for the actual web design, that was done
within a few hours, but getting hooked up, approval from card
companies and so on, takes time."
But he says the online system has led to
other cost savings in terms of staff time. "If we added up the
hours in a week after a live auction with all the payments made by
people far afield, and processing those payments, the time would
run into days in a couple of weeks," Mr Clements added.
• the-saleroom.com, part of the same group that
publishes Antiques Trade Gazette, provides auctioneers
with an online payment system.
The system is fully integrated into the
online toolboxes that the-saleroom.com provides to auctioneers and
is fully Payment Card Industry (PCI) compliant.
When bidders register to bid at an auction
on the-saleroom.com, they enter their credit or debit card details
and where appropriate pass through 3D Secure.
An auctioneer using the-saleroom.com for live bidding can then
process payments using a tokenised version of the bidder's card
details.
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