Fraud Prevention for A/OPCs | Smartpay (2023)

Fraud Definition and Types

Fraud is 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 payment solutions for transactions not part of official government business. Like any deception, fraud has its fair share of victims.

GSA is posting this information to help you, your agency, and the Federal Government avoid being victimized. Fraud can come in many disguises, such as false emails, mail, or phone calls. Likewise, intentional misuse of a GSA SmartPay payment solution by the account holder can result in fraud. In addition, non-account holder fraud involves the use of the payment solution or account holder information by an unauthorized person.

As a GSA SmartPay cardholder, you should be aware and take necessary steps to protect your account and yourself.

Different Types of Fraud

Some of the different types of fraud include:

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  • Counterfeit Accounts — To make fake cards, criminals use the newest technology to “skim” information contained on magnetic stripes of cards, and also to pass security features (such as holograms).
  • Lost or Stolen Accounts — Often physical cards are stolen from a workplace, gym or unattended vehicle.
  • Card Not Present (CNP) Fraud — Internet fraud occurs whenever account information is stolen and used to make online purchases. Usually, a merchant will ask for the CVC code (located on the back of the card itself) to help prevent this type of fraud.
  • Phishing — Phishing occurs whenever an account holder receives a fake email directing him or her to enter sensitive personal information on a phony website. The false website enables the criminal to steal information from the account holder.
  • Non-Receipt Fraud — This occurs whenever new or replacement cards are mailed and then stolen while in transit.
  • Identity Theft Fraud — Whenever a criminal applies for an account using another person’s identity and information

Detecting Fraud

One of the first signs that you have been a victim of fraud will be at least one “mystery expense” showing up in your monthly statement. To help detect fraud, you should verify your statement by:

  • Looking for transactions you do not recall making;
  • Checking for unknown vendors; and,
  • Searching for account withdrawals you do not remember making.

Avoiding internal/external 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:

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  • 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.

Misuse and Abuse

Intentional use of a government account for other than official government business constitutes misuse, and depending on the situation, may constitute fraud. Each agency develops and implements policies related to employee misuse. Examples of misuse include:

  • Purchases that exceed the account holder's limit;
  • Purchases that are not authorized by the agency;
  • Purchases for which there is no funding;
  • Purchases for personal consumption, and
  • Purchases that do not comply with the policies that govern each particular payment solution type.

Potential consequences for the account holder may include: counseling, cancellation of the card, a written warning, notation in employee performance evaluation, reprimand, and/or suspension or termination of employment.

In the case of a centrally billed account (CBA), either purchase or CBA travel account misuse, the employee may be held personally liable to the Federal Government for the amount of any unauthorized transactions. Depending on the agency and the circumstances, there are a number of applicable laws that can result in fines or imprisonment.

Additionally, in certain cases, vendors are authorized to take certain actions against account holders whose accounts are cancelled for delinquency, such as:

  • Assessing late fees;
  • Utilizing collection agencies to recover the delinquent balance;
  • Reporting the delinquency to national credit bureaus, and
  • Salary offset.

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.
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If I become a Victim of Fraud

If you discover that someone else has used your account, promptly report the incident to your A/OPC and the bank’s customer service representative. Once your account (or the account holder information) has been reported lost or stolen, the account is immediately blocked. If necessary, the bank will then issue a new card with a new account number. Also, your bank will send you a letter explaining the steps you can take to protect yourself further. Sometimes, unauthorized transactions will appear on the billing statement, even though the account was reported lost or stolen. You should report all unauthorized transactions by calling the bank's customer service telephone number.

If your GSA SmartPay account falls victim to fraud, contact your A/OPC and your agency’s bank immediately.

U.S. Bank
fraud_help@usbank.com
(877) 595-6256

J.P. Morgan
abuse@chase.com
(888) 297-0781

Citibank
emailsproof@citigroup.com
(800) 274-6660

If Fraud has already occurred

If an account holder reports fraud, it is your responsibility to contact the issuing bank for further investigation. The bank will block/cancel the account and replace it immediately. If you suspect an account holder is guilty of fraud, you can file a complaint with your agency’s Inspector General. Investigations are initiated upon receipt of a complaint or other information that gives a reasonable account of the wrongful or fraudulent act. Many agencies provide fraud hotline numbers to report fraud. Be as specific as possible when calling or sending a complaint. The following should be provided:

  • The employee's full name
  • Rank or pay grade
  • Duty station
  • Specific suspected fraudulent act or wrong doing
  • Specific dates and times
  • Specific location of where the suspected fraudulent act occurred
  • How the individual completed the alleged fraudulent act

Based on the findings of the investigation, you may be required to notify an employee’s supervisor and human resources office for further internal administrative action. Depending on the action you may also need to contact other organizations including:

  • The bank’s fraud unit
  • The Inspector General
  • The Fraud Hotline
  • The DOD Criminal Investigative Service (DCIS)
  • The Federal Bureau of Investigation (FBI)
  • The Naval Criminal Investigation Service (NCIS)
  • The U.S. Army Criminal Investigation Service (USACIDC)
  • The Air Force Office of Special Investigators (AFOSI)
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Reporting/Monitoring Fraud

Program Coordinators should use electronic reports to monitor and track misuse and fraud. The following reports may be utilized to detect misuse and fraud within your program:

  • Account Activity Report –This report shows all active accounts and spending for each account during a billing cycle. It provides details on each transaction, including transaction date, transaction type, merchant name, and dollar amount. It is particularly useful for identifying suspicious merchants, unusually high spending patterns, excessive convenience check usage, and untimely purchases.
  • Declined Authorizations Report – The declined authorization report will identify account holders who have attempted to use an account to buy an item for which they are not authorized, that exceeds their single-purchase limits, that exceeds their monthly purchase limit, or from a merchant that falls under a blocked Merchant Category Code (MCC).
  • Disputes Report – The disputes report identifies date, merchant, reason code, dollar amount, and status of each dispute filed by an account holder. Approving officials and A/OPC’s should track and follow up on disputes to determine their outcomes. Account holders should attempt to resolve disputes directly with merchants prior to filing a disputes report. If a merchant is consistently appearing on the disputes report, the A/OPC should determine whether the merchant may have billing issues, quality issues, or is attempting to commit fraud by submitting false transactions.
  • Unusual Spending Activity Report – The banks offer various reports identifying transactions that may warrant further review.
  • Lost/Stolen Account Report –The lost/stolen account report identifies accounts that are reported lost or stolen. This may either be an indicator that the account holder needs to secure his/her account or that the account holder is attempting to disguise misuse or fraudulent activity by denying the charges.
  • Master File – The master file should be reviewed periodically to eliminate account holders who are no longer employed in the agency, correct addresses, and verify whether card limits and authorization controls are appropriate.
  • Ad Hoc Reports - Your bank may offer an ad hoc reporting tool that enables you to create customized reports with the data elements you specify.

Taking Action

Potential consequences for the account holder may include:

  • Counseling,
  • Cancellation of the account,
  • A written warning,
  • Notation in employee performance evaluation,
  • Reprimand, and/or
  • Suspension or termination of employment.

In the case of purchase account, the employee may be held personally liable to the Federal Government for the amount of any unauthorized transactions. Depending on the agency and the circumstances, there are a number of applicable laws that can result in fines or imprisonment.

Additionally, in certain cases, the issuing banks are authorized to take certain actions against account holders whose accounts are cancelled for delinquency, such as:

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  • Assessing late fees;
  • Utilizing collection agencies to recover the delinquent balance;
  • Reporting the delinquency to national credit bureaus; and
  • Salary offset.

FAQs

What are some fraud prevention policies? ›

Key Factors in Preventing Business Fraud
  • Know Your Employees. Fraud perpetrators often display behavioral traits that can indicate the intention to commit employee fraud. ...
  • Make Employees Aware/Set Up Reporting System. ...
  • Implement Internal Controls. ...
  • Monitor Vacation Balances. ...
  • Hire Trustworthy Experts. ...
  • Live the Corporate Culture.
29 Sept 2022

How do you measure fraud prevention? ›

Top 10 Fraud Prevention Measures to Protect the Value of Your...
  1. Documented procedures.
  2. Reconcile bank statements monthly. ...
  3. Conduct background checks. ...
  4. Implement a fraud and ethics policy. ...
  5. Control access to funds. ...
  6. User access controls. ...
  7. Regular financial reporting package. ...
  8. Control access to what makes you money. ...
4 Nov 2015

How can you shop smarter when using your GSA SmartPay purchase account? ›

Here are some tips to help you shop smarter when using your GSA SmartPay Purchase Account:
  1. Use GSA Advantage! to conduct quick and easy market research and to order already negotiated low-price items;
  2. Take advantage of the Blanket Purchase Agreements (BPAs) your agency has negotiated to get better prices;

What are is most common anti fraud controls in an organization? ›

Five Anti-Fraud Controls to Implement Immediately
  • Robust Code of Conduct. ...
  • Separation of Functions. ...
  • Certifying and Auditing Financial Statements. ...
  • Testing and Evaluating Internal Controls. ...
  • Fraud Risk Assessment Consulting.
6 Oct 2022

How can a business avoid fraud? ›

Remember these ten simple tips to reduce the risk of business fraud and keep your business and staff safe.
  1. Be sceptical. ...
  2. Know your business inside out. ...
  3. Know your customers and suppliers. ...
  4. Identify areas where your business is vulnerable to fraud. ...
  5. Develop a strategy and talk about fraud. ...
  6. Take extra care against cyber attacks.

What is an A OPC? ›

The Agency/Organization Program Coordinator (A/OPC) is the primary liaison between you and the bank.

Who is liable for all charges on a GSA? ›

Who is liable for charges? IBA Accounts: The GSA SmartPay Master Contract stipulates that liability for all charges rests with the individual account holder. If the account holder fails to pay his/her account on a timely basis, the bank may suspend or cancel the account and assess late charges and fees.

What happens if I dont pay my SmartPay? ›

Failure to pay the monthly bill in a timely manner may result in the loss of their charging privileges. If the account is suspended, the account holder will be unable to use it until the bank receives payment.

What are the three types of fraud against organizations? ›

Occupational Fraud Categories

Occupational fraud, as stated, can be put into three categories: asset misappropriation, corruption, and financial statement fraud. We describe these areas next. Asset Misappropriation is the most common form of occupational fraud but the least costly on average.

Is responsible for notifying the A OPC? ›

The bank is required to notify the A/OPC and the Designated Billing Office (DBO) requesting payment on accounts with undisputed past due (45 days from billing date) charges. The bank shall provide a pre-suspension/cancellation report to the A/OPC to identify the undisputed overdue amounts.

Who oversees the proper processing of invoices? ›

Designated Billing Office (DBO) Role and Responsibility

The DBO oversees the proper processing of invoices and ensures invoices are paid within the Prompt Payment Act timeframes.

Which of the following is an example of purchase account misuse? ›

Thus, any purchase made that is for the account holder's personal use rather than for official government purposes is considered to be misuse. For example, an account holder who uses the purchase account to buy himself lunch because he had no cash available that day is misusing the purchase account.

What are GSA requirements? ›

Step 1: Check Your Eligibility to Become a GSA Contractor
  • Potential contractors must be in business for at least 2 years before they acquire a GSA Schedule contract. ...
  • GSA requires that you have either 3 Contractor Performance Assessment Reporting System (CPARS) reports or that you provide 3-5 customer references.
13 Apr 2022

What is GSA compliance? ›

What Does GSA Compliance Mean? GSA Approval is a non-industry specific status for organizations that manufacture and sell products to the United States Government through the General Services Administration (GSA).

What agency does GSA fall under? ›

The General Services Administration (GSA) is an independent agency of the United States government established in 1949 to help manage and support the basic functioning of federal agencies.
...
General Services Administration.
Agency overview
Annual budget$33.6 billion
Agency executivesRobin Carnahan, Administrator Katy Kale, Deputy Administrator
8 more rows

How do I get out of a SmartPay lease? ›

You can pay off your Lease early to save on total fees. To pay off your Lease early, log into your SmartPay account and navigate to the “Make a Payment” tab. Here, you will see a “Payoff Lease” button that will begin the early payoff process.

Does SmartPay show on credit report? ›

Yes. We use alternative credit reporting agencies to verify your personal and financial information. As with any credit application, it's important to be as accurate as possible when completing the SmartPay application. This type of verification may appear as an inquiry on your credit report.

Does SmartPay affect credit? ›

You are personally liable and responsible for all charges whether or not you are reimbursed by your agency; Your credit rating may be affected if the account is cancelled; You may be subject to disciplinary action and/or salary offset for late payment.

Which of the following are GSA SmartPay purchase account benefits? ›

The GSA SmartPay accounts save the Government time, money and resources. The GSA SmartPay purchase program provides the Government with financial and cash management control over low dollar value high volume procurements and can serve as a payment tool for larger transactions consistent with agency policy.

How does the SmartPay rewards app work? ›

The SmartPay Rewards app is a convenient way to save 10¢ per gallon on gas, every day or pay for in store purchases. To make your visits even more rewarding, every time you use the app you will earn progress towards earning free drinks and food. It's free and easy to get started.

How do I use my government purchase card? ›

The Governmentwide purchase card may be used to (1) Make micro-purchases; (2) Place a task or delivery order (if authorized in the basic contract, basic ordering agreement, or blanket purchase agreement; or (3) Make payments, when the contractor agrees to accept payment by the card.

What is a shop smarter subscription? ›

ShopSmarter is an online shopping program that offers consistent 10% Cash Back at 1,000+ online stores. As a member, you can earn up to $1,000 in Cash Back every year, plus browse the latest deals and discounts for even bigger savings when you shop online.

What are the responsibilities of a purchase account holder? ›

Purchase Account Holder Responsibilities
  • Securing the account;
  • Maintaining records relating to all transactions;
  • Using the account ethically and appropriately;
  • Performing market research;
  • Observing all dollar limits on purchases;
  • Complying with green purchasing requirements; and.
  • Reconciling and documenting transactions.

Does SmartPay charge a fee? ›

SmartPay is an extremely flexible pre-paid, electricity plan (fee-free for current customers!) With SmartPay, you buy the energy you need, before you need it, on your schedule, not ours.

What credit score do you need for SmartPay? ›

SmartPay is a no-credit-required lease-to-own product. "No credit required" means that, although no minimum FICO score or established credit history is necessary to apply, SmartPay may check past payment history based on the information you provide in the application.

What is SmartPay limit amount? ›

Upto Rs.1800 a year. (max cap of Rs150 / month)

How do I receive money from SmartPay? ›

How do I pick up a money transfer? Please complete the receiving amount form in a nearby service point location and notify the cashier of the transfer's control number and receiving amount, in addition to your proper identification. The cashier will proceed with your payment along with a copy of receipt.

What are the three external frauds? ›

External fraud by suppliers includes: • Short or inferior supply of goods. Payment for services and goods not supplied. Kickbacks for biased selection of suppliers. Payments to bogus vendors for false claims.

What are three examples of misuse of the government purchase card? ›

Examples of misuse include: (1) purchases that exceed the cardholder's limit; (2) purchases not authorized by the agency; (3) purchases for which no funding exists; (4) purchases for personal consumption; (5) purchases that do not comply with the Federal Acquisition Regulation (FAR) and/or other applicable procurement ...

What are 3 examples of abuse of the GPC? ›

What are the three examples of misuse of the Government Commercial Purchase Card?
...
Terms in this set (23)
  • Purchasing office supplies for home use.
  • failing to certify "purchase card certification statements" on time.
  • violating a specific-use policy.
17 Nov 2020

How much does shop smarter cost? ›

And the Shop Smarter membership fee is $9.97/month. What is this? Some other cashback platforms offer a free version and a paid version. This platform only offers a paid version which comes with all the benefits for earning rewards.

What are 3 smart shopping tips? ›

Smart Shopping Tips
  • Think about some of the meals you will make.
  • Look at what you have on hand.
  • Write a list of what you need to buy.

What is Best Buy shop smarter? ›

Instead of overspending or endlessly searching for money-saving coupons online, our members use ShopSmarter to earn 10% Cash Back, browse the latest store-verified deals, get special discounts on lifestyle subscriptions and products, and stack year-round savings on practically anything they buy online.

Videos

1. 2022 GSA SmartPay Forum - GSA001 - Advanced Concepts in Purchase Card Management
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3. SmartPay Training Video
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6. How UK Residents Can Pay ZERO Taxes Legally! UK Tax Avoidance Strategies for United Kingdom Taxes
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