A small Perthshire family business says it has been the victim of a fraud attack that has gone on for almost a year and cost it £10,000.
Award-winning Clootie McToot has the world’s only clootie dumpling shop and café in Abernethy.
Its owner, Michelle Maddox, was one of the contestants on Gordon Ramsay’s Future Food Stars BBC One television show last year.
She has spoken out about the shock of discovering the fraud attack earlier this month, which she says has taken a mental as well as financial toll.
The business’ payment terminal provider Paymentsense claim the refunds have been made in person by people with access to a master code, which only Michelle and her husband Alasdair know.
“I feel like I’m being accused of theft and fraud in my own company and I don’t know how to prove my innocence,” she said.
“Not only do I want to clear my name, I want to make other people aware of what’s happened.”
Accountants alert to Clootie McToot fraud
Clootie McToot started with Michelle selling clootie dumplings at farmers’ markets. It has since gone from strength to strength.
It now employs a workforce of 15 staff, the majority of which have a disability.
And so it came as a surprise when her accountants, Perth-based Morris & Young, contacted her on May 5 to ask why sales were down.
“We couldn’t think of anything and so Alasdair started going through the Paymentsense app on his phone to see what the difference is.
“It was then he found the section on refunds and noticed that six had been processed on a single day.
“I knew immediately that’s impossible – we don’t really have refunds. Nobody buys a dumpling and then wants to return it.”
The refunds started in June last year – initially for 1p, then £1, then £20. Over time they became more frequent and for higher amounts.
They have taken place at all hours of the day and night for differing amounts – but many have been made to the same card.
More recently, some days have had up to eight refunds, with the highest single refund being for £630.
Card terminal probe
Michelle immediately raised the issue with Paymentsense, who she claims should have noticed the fraudulent activity.
She pays a monthly terminal fee of around £60 as well as a transaction fee.
“There were refunds to the same last four digits over and over again. This card never purchased in the shop but refunds were processed all the time. Paymentsense let it go on for months and never flagged it.
“Their argument is that they’ve been for small amounts, which they class as under £500. That’s not a small amount to a family business like ours.
“We haven’t added it all the transactions up. There’s part of us that doesn’t want to. I think it’s about £10,000 in total.
“I was in tears and had to beg them to stop processing the refunds. It took six days before they eventually cut them off.”
Paymentsense Clootie McToot fraud investigation
Paymentsense insist their systems are not to blame. Their investigation lasted just two days.
Their conclusion states: “We have looked into the refunds being made on your terminal and the vast majority of these are being made to a Revolut bank account… and are being processed via contactless.
“This would mean that the transactions were made by someone who had physical access to the terminal as they would have tapped their card to accept the refund.
“In order to process these refunds, you would also need to enter the supervisor password.”
It added that the majority of refunds were under the shop’s average transaction value so would not have been flagged by its banking partner Clover.
Paymentsense said it wouldn’t comment on customer accounts in response to a press enquiry.
‘None of this makes sense’
Michelle highlights the fact that refunds have been taking place at all hours of the day.
Staff members do not know the supervisor’s code for refund – or the security alarm code at the Abernethy premises.
She said: “None of this makes sense. I have never been so disappointed and disheartened before.
“I feel like I’m being accused of theft. They only investigated for two days – I think that’s weird.
“I want to go public with this in case this has happened to other people or if someone can offer help.
“I have reported this to the police and Financial Conduct Authority.
“The stress has been unbelievable and now I don’t know where to turn.”
A Police Scotland spokesperson said: “On May 6, we received a report of fraud from a business owner in the Abernethy area. Inquiries are ongoing to establish the full circumstances.”
The Financial Conduct Authority has been asked to comment.