Incidents of credit-card fraud and identity theft have risen dramatically in recent years. With increased use of e-commerce and technology in business, it has become easy for thieves to steal and misuse credit-card numbers.
The dangers do not always come from outside a company. As a selfstorage operator, you should beware of employees who steal tenants’ credit-card numbers and use them fraudulently. The following are examples of the most common ways employees use credit cards to steal from a business and its customers:
- A facility manager documents credit-card numbers and expiration dates as tenants pay their monthly rents over the phone. He then uses them to make online purchases.
- An employee pockets cash payments from tenants and charges their rents to other tenants’ credit cards. By stealing cash instead of making fraudulent purchases, these thieves attempt to cover their tracks. If the credit-carrying tenant notices the double charge, it is easily explained as an error.
- Credit-card skimming is one of the newest types of theft. An employee swipes tenants’ credit cards through an unauthorized magnetic card reader, which records their data. The information is then copied onto counterfeit cards or sold to other parties.
Employee-dishonesty insurance protects you against losses from robbery, burglary, theft, embezzlement and other risks. This coverage can be tailored to fi t the size and scope of any operation. In most cases, business-property and liability package policies can be endorsed to provide coverage for employee dishonesty, the loss of money and securities from the premises, and the loss of other covered business property such as computers.
There is a popular misconception that employee-dishonesty insurance will cover injuries, property damage or litigation that arises from employee credit-card theft. However, insurance policies actually exclude coverage for injuries or property damage arising from an illegal act. The following are tips to deter credit-card theft in your operation:
- Hire the right employees. To determine if potential hires are trustworthy, always checks applicants’ references and previous work experience. Conduct background and criminal checks on prospective employees who will have access to tenants’ personal information.
- Create a caring culture. Research suggests one of the most effective theft deterrents is treating employees well. Companies that establish and communicate positive company values can experience a significant reduction in employee-related crime.
- Consistently balance all incoming funds and outgoing expenses. Most self-storage software programs create reports to simplify this task.
- If you suspect a problem, get to the root of it. If you notice a recurring issue when one particular employee works, try to confirm doubts by moving the employee to another shift with different co-workers.
- If you use temps, hire only those who have had thorough background checks and closely manage their activities.
- Restrict access to tenant information to those employees with a business-related need to use it. Train your staff in protocol for keeping that information secure.
- Provide paper shredders for employees to dispose of personal customer information.
- Use credit-card machines that print only the last five digits of credit-card numbers on receipts.
- If tenants call in to make monthly payments, consider using an automated telephone-payment service. This prevents tenants from giving their credit-card information to an employee.
- Use a third-party processor to handle credit-card payments. The setup for this kind of service is typically free or carries only a small, one-time fee.
This article is a guideline to aid in minimizing risk in self-storage facilities. The information it contains is intended to be of general interest and does not address the circumstances of any particular individual or entity. Nothing in this document constitutes legal advice, nor does any information constitute a comprehensive or complete statement of the issues discussed or the laws relating thereto.
Amy Brown is part of Universal Insurance Facilities Ltd., which offers a comprehensive package of coverages specifically designed to meet the needs of the self-storage industry. For more information, or to get a quick, no-obligation quote, call 800.844.2101; e-mail firstname.lastname@example.org; visit www.vpico.com/universal.