BACK

Your Business Credit

Can my employer force me to pay for a fraudulent charge?

Employers should provide employees in charge of card payments training on how to deal with potential fraudsters; if they want you to pay, seek legal help

Summary

Employers should offer training on how to deal with fraudulent charges to employees in charge of processing credit card payments. But taking money from employees’ wages to make up for fraudulent charges is not the wisest course of action.

The editorial content below is based solely on the objective assessment of our writers and is not driven by advertising dollars. However, we may receive compensation when you click on links to products from our partners. Learn more about our advertising policy.

The content on this page is accurate as of the posting date; however, some of the offers mentioned may have expired. Please see the bank’s website for the most current version of card offers; and please review our list of best credit cards, or use our CardMatch™ tool to find cards matched to your needs.

Dear Your Business Credit,

I had an issue with a scamming credit card. I am a server. I had a table about a month ago and they paid with a scamming card and told me it was a smart card.

It’s my first serving job and I’m not familiar with all the frauds, so I believed him. The card did not have any chip or band and I had to insert the number.

I did it, but now my boss is telling me I’m responsible for this and that I have to pay! Is that true? – Claudia

Dear Claudia,

It’s really hard to stay ahead of fraudsters these days. They keep getting craftier.

You did not mention if you received any training in processing credit cards and fraud avoidance. Your boss should have trained you and any other servers before you served any tables on how to properly process credit cards.

The agreements your boss signed with the major card companies, such as Visa, Mastercard, American Express and Discover, say the merchant must follow their procedures – and, if he or she doesn’t, could lose the right to process the cards.

Those agreements describe what to do in various scenarios, such as when someone calls in an order over the phone or presents a card without a chip.

Check out all the answers from our credit card experts.

Ask Elaine a question.

See related:  Taking credit card fees out of employees’ tips

Suspect card fraud? Here’s what to do

Any merchant asking employees to process credit card transactions should give them thorough training in what the requirements are.

For any merchants who don’t know where to begin or servers who have not been trained and want to make sure they don’t get scammed, please check out my previous column, “What merchants should do when they suspect card fraud.”

Following the procedures outlined can prevent many common types of deceptive card use, greatly limiting losses due to fraud.

As the article discusses, if you think a card may be fraudulent, there is a way to discretely protect the business without confronting the customer.

  • Call the number for merchants on the back of the card and ask for a Card 10 authorization.
  • The operator will ask you yes or no answers and, if the situation warrants, will discretely call the police for you.
  • Neither you nor the merchant should ever get into a conflict with the customer or try to seize the card. It could be dangerous. There is no situation where this is ever worth it.

Can an employer force you to pay for card fraud?

As to whether the employer can force you to pay for the fraud, I received input from attorney David Reischer, CEO of LegalAdvice.com, which is based in New York City. Individual states’ laws may come into play, according to Reischer.

“It is unusual for an employer to make an employee liable for chargebacks that the credit card company flagged as fraudulent,” wrote Reischer in an email. “A waitress in this situation should be aware that some states have created laws on the issue of fraudulent credit card fees. A waitress should consult an attorney to learn state specific laws on this subject.”

You may have some recourse against your employer under the Fair Labor Standards Act if the employer takes the money out of your compensation.

“An employee that believes an employer is stealing could file a wage claim asserting that charges were unlawfully applied to the waitress,” Reischer wrote. “The employee could also assert the deductions of moneys were unlawful and thus entitled to special damages. An employee could also file claims for conversion [theft of salary or tips].”

A final thought: We’re in a period of full employment. Whether or not your state’s laws protect you in this scenario, I would ask yourself if you want to continue to work for a restaurant that treats employees as you have been treated.

There are many, many restaurants looking for good help who may be willing to give you a job – and the training you need to process credit card transactions correctly. That’s an option worth considering.

What’s up next?

In Your Business Credit

A touching business venture: Turning grief into gratitude

Sergio Andrés Mendoza’s wife lost her battle with breast cancer, but her strength and hope stays with Mendoza to this day. He strives to make every woman feel as beautiful and powerful as the women in his life. With the help of credit cards, Mendoza is on a mission to inspire every woman – one ring at a time.

Published: July 3, 2019

See more stories
Credit Card Rate Report Updated: July 10th, 2019
Business
15.61%
Airline
17.59%
Cash Back
17.68%
Reward
17.58%
Student
17.79%

Questions or comments?

Contact us

Editorial corrections policies

Learn more

Join the Discussion

We encourage an active and insightful conversation among our users. Please help us keep our community civil and respectful. For your safety, do not disclose confidential or personal information such as bank account numbers or social security numbers. Anything you post may be disclosed, published, transmitted or reused.

The editorial content on CreditCards.com is not sponsored by any bank or credit card issuer. The journalists in the editorial department are separate from the company’s business operations. The comments posted below are not provided, reviewed or approved by any company mentioned in our editorial content. Additionally, any companies mentioned in the content do not assume responsibility to ensure that all posts and/or questions are answered.