LP Magazine

MAY-JUN 2019

LP magazine publishes articles for loss prevention, asset protection, and retail professionals covering shrinkage, investigations, shoplifting, internal theft, fraud, technology, best practices, and career development.

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an Internet-accessible computer," according to a research note by the Privacy and Data Security Group at labor law firm Ballard Spahr LLP. "This decision is likely to have a very significant impact on cyber-security-related litigation in and beyond Pennsylvania, as negligence is now a viable cause of action for inadequate data security under Pennsylvania law." The firm expects to see a spike in data breach-related claims brought in Pennsylvania courts and under Pennsylvania negligence law, and that entities that operate in Pennsylvania or collect personal information about Pennsylvania residents need to review the reasonableness of their current cyber-security policies and procedures to protect personal information from unauthorized access or acquisition. Case 3: Security Screenings and Compensated Time Following eight years of litigation, in 2014, the US Supreme Court ruled that a staffing company's employees, working in Amazon warehouses were not entitled to be paid for the time they spent in anti-theft security lines at the end of their shifts. That did not end the matter, however. The Sixth Circuit Court of Appeals revived the workers' claims under Nevada law because time undergoing a security screening is compensable according to that state's wage law. The court noted that some state laws don't apply the same test as federal law when determining whether certain time at the workplace is considered work time that must be compensated. So Amazon and its staffing company may have to pay warehouse workers for their time going through anti-theft security screenings at the end of their shifts, the federal appeals court ruled. "Employers must carefully scrutinize the interplay between applicable federal and state laws to ensure they are in compliance," said Elayna Youchah, an attorney with the law firm Jackson Lewis, in an analysis of the verdict (Busk v. Integrity Staffing Solutions, 6th Cir., No. 17-5784, Sept. 19, 2018). Return Fraud: An Analysis of a Chicago ORC Group By Stephanie Lin Return fraud is a growing concern and costly challenge for many retailers. Losses to retailers from return fraud are astronomical, costing retailers billions of dollars every year. While it is crucial to enhance security and employee trainings to mitigate return fraud, it is also imperative to comprehend the routine behaviors and the techniques offenders use to conduct returns. To better mitigate return fraud in a brick-and-mortar setting, the Loss Prevention Research Council (LPRC) conducted a series of offender interviews. The intent of the project? To understand the implications behind return fraud and the mechanisms by which return offenders circumvent store's return policies and complete fraudulent returns. Case Study: A Chicago ORC Ring During the interview process, the LPRC researchers discovered an organized retail crime (ORC) ring based out of Chicago and were able to investigate this group closely to learn more about their return methods and routines. The organization has been established for about four years and comprised of five to six people. The leader of the ring used to work for the loss prevention team of a drugstore. The organization operates under the notion that "big corporations rip off their employees and cheat people out of their money." They therefore rationalize their unethical behavior by the belief that they are not taking from the people but rather from immoral corporations. Recruitment The organization specifically targeted active cashiers of various retail stores. The technique the recruiters use to recruit members is to approach the store cashiers during a casual conversation, ask the cashier about their job and salary satisfaction, and tell them lies to attract them to the organization. The leader of the group makes the final decision on whether to accept the candidate. The leader makes his decision based on observations of various tasks and seeks people who can most effectively and accurately complete these tasks under ten minutes. Tasks might include: Q A game of chess, to see how quickly and efficiently their brain would work. It didn't matter if they won or lost. Q Mapping out the floor plan and laying out the place that the group needed to hit efficiently under two minutes. Candidates need to locate the cameras, identify where the team is needed, and select what they want to steal. The ultimate goal of these exercises is to find someone who is: Q Upbeat, willing, and determined. Q Able to communicate effectively. Q Capable of articulating situations during a theft operation. The people who are recruited by this organization tend to share a set of beliefs regarding the immorality of large corporations. They believe their actions are justified because of this. Similarly, they view stealing as their "compensation package" (metaphor of the ledger) and regard it as their right to take some items for themselves at the expense of the company to justify the company's unethical behaviors. Retail Targets and Methods of Theft The targeted stores include but are not limited to drugstores, department stores, supermarkets, and big-box stores. Typically, this group has continued from page 74 76 MAY–JUNE 2019 | LOSSPREVENTIONMEDIA.COM

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