Immediately thereafter, the electronic messaging is routed to the bank that issued the debit card. At this point, the bank verifies whether the customer has sufficient funds and informs the merchant.
However, numerous card readers have a functionality that provides for an override in the event of a denial. A “forced poster” can enter a code that takes the card reader offline. In doing so, the original denial message is circumvented and the transaction is approved.
Fraud perpetrators can take advantage of the security loophole by entering a fictitious code not provided by the issuing bank, causing the card reader to authorize the transaction.
The customer departs with the merchandise without paying (virtual heist). The merchant is none the wiser because it is unaware the code was fictitious (and the transaction invalid) until days, or even months, after the fact.
If convicted, Robinson, Johnson and Hatwood each face up to 40 years in prison.
