Posted on 08/19/2010 9:51:07 AM PDT by davidosborne
Greetings my fellow FReepers. Before anyone complains that this post in "unsourced" let me say that as a recent VICTIM of Credit Card Fraud as well as a law enforcement officer I am very concerned about this epidemic that is hitting our nation HARD ! My main concern about this is....... WHO is paying for it? When a victim of credit card fraud reports unuathorized transactions to their bank they are reimbursed immediately for the unlawful transactions. The bank then becomes the victim, but who reimburses the bank? Is it US the taxpayers? If so what is the DAILY cost of these transactions? Who is tracking this data?
For the past 2 months I was TDY to Fort Knox, KY and while in Kentucky I got a phone call from DISCOVER asking if I had made a charge at a grocery store in OHIO. I told them no and my card was immediately canceled and I was reimbursed for this charge. Important to note is that the fraudulent transaction on my account was done using a physical CARD SWIPE, not a keyed in number, but I had possession of MY card, so the only way that could be possible is if a FAKE PHYSICAL card was made using my credit card account number.
Important to note is that I DID NOT file a police report, and DISCOVER did not request that I do so as a condition of refunding the ammount of the fraudulent transaction. My first day back to work, as a law enforcement officer, after returning from military duty, I personally took 4 reports of credit card fraud. Now these are cases in which the bank REQUESTED that the victim file a report with law enforcement. So you can be sure that the REPORTED cases are only a fraction of the actual cases out there. Have you or someone you know been a victim of credit card fraud? What are we going to do about this?
The bank is NEVER the victim, it’s the merchant. As a merchant who sells performance automotive tuners online, I can tell you that it is I who loses the money on these fraudulent transactions (if they get by me and the product gets shipped).
The bank loses nothing whatsoever other than time involved with having processed and then reversed the charges.
Agree...The interest rates charged by these credit card companies is criminal.
Never, ever, ever, ever use an ATM/Debit card for purchases. If your credit card number is stolen and money is charged to it, it doesn't affect you other than maybe having to use another card while it is being investigated. They're just numbers on a computer. If someone steals your ATM/Debit card number then that is real money in your checking account that is being taken out and you might not have access to that cash during the investigation of the charges. Even look at changing your debit card for an ATM only card, or at least have general charging priviledges removed from it.
If you must have a debit card for some reason, link it to an account with a small amount of money in it and move money to the account as you need it.
I am extremely careful - and was never hit.
That is until late May/early June.
What a headache.
I am extremely careful - and was never hit.
That is until late May/early June.
What a headache.
One of my peeves: Grabbed a cheap snack at a Burger King in a mini-mart gas station. Asked for ID. I pointed out the absurdity of this over a very small amount when I could fill up my car outside with no questions asked (except for pumps that ask for your zip code).
Against contract? CC used at airlines, Amtrak for exapmple, no ID no tickey
My daughter paid with a credit card at TGIFriday’s one evening. The next week someone bought $350 worth of computer equipment online using that number. You can’t trust restaurant personnel with your credit card—Need to go to cash register yourself to pay the bill.
Europe has a "smart card" design for a decade if not more. The smart card can't be copied, and all purchases require posession of the original card. US cards are just dumb pieces of paper with a number on them. Cards themselves have no value, it's the number that matters. Lose the number and have a problem.
Card skimmers are now installed by criminals in many locations. Some are installed *inside* gas pumps, for example, and they connect directly to the wiring of the pump. Nobody can detect the skimmer without opening the pump, and as you can imagine this is not done frequently.
Carrying cash is not a good option - if you lose the wallet you lose your money forever. With a c/c you have time to cancel. Not buying over the phone or the Internet is also not a very appealing option today.
There are some one-time cards. I personally never used them. Another option is to have a debit card that can't be overdrawn, and you transfer the money into the card's account only when you need to make a purchase. This should be easy with most banks.
There are technological solutions that can fix this problem for good. But banks in the US are clinging to their plastic; they think they are better off this way. Smart cards cost more, and there would be a need for investment into secure purchasing infrastructure, you'd need to scrap hundreds of millions of mag stripe terminals and replace them with smart card terminals... and for what? Losses to the bank are tiny, and they certainly write them off anyway, so after taxes the bank doesn't lose anything. Besides, if a merchant posts a fraudulent transaction and the bank issues a chargeback it's the merchant who is on the hook, not the bank.
When properly done, such a secure system can be very reliable, short of torturing you to make you pay for something the attackers want. It would work this way. You have a card that has a cryptographic processor inside. A terminal "talks" to the card, and uses modern encryption to verify that the card is yours, and that you are you (by entering a PIN.) Note that the card does the encryption and authentication here - without the card nothing will happen; there are simply no numbers on the card. To buy from home you would swipe the card at your home terminal (a PC with a cheap USB dongle), and the PC software would route the encrypted communication to your card and back. Again, the PC doesn't need to be trusted - only the card and the bank's computer know the plaintext. And you can't open the card, it's tamper-proof. If you lose the card the attacker needs to know the PIN to use it, and with a PIN long enough the bank computer will not allow him to try and try again. I think there are cards with a fingerprint reader.
So the only thing that is missing is the "can do" approach. Engineers are standing by, ready to clamp down on the c/c theft. But the executives do nothing. A familiar theme these days.
This same thing has happened at the company I work for - company credit cards - someone keeps “swiping” them in California. We’ve had to cancel each of the cards at least once because of this.
So what I gather is that they are getting the information, and making the fake cards.
The last one was the result of a problem at a hotel in Oregon my boss went to while on vacation.... or so says the letter we received from them.
Publix is an upscale grocery store chain located throughout the south east US. If they were attempting to spend 500, it would have been a mighty fine feast.
Especially out of the country. Horror stories, i.e., restaurant, take card out the back door and make purchases at nearby retail stores, or online.....you don't know about it until returning home days or weeks later....OUCH!!
I've never seen that happen, although sometimes the CC company's confirmation system may ask for more ID, but that is the CC company not the store demanding it.
Against contract? CC used at airlines, Amtrak for exapmple, no ID no tickey
But in those cases you need the ID for the purchase no matter what the method - check, credit card or even cash (unless you're a 15 year old kid flying to Tennessee). There isn't an extra level of security for credit cards.
Thanks for the heads up Dave.
Never had an issue. I have a debit card, they accept it at car rental places, they take it at Hotels, I buy plane tickets.
I don’t need credit.
I have NO CREDIT SCORE, a credit score is a score on how good you are at paying back debt. I got rid of debt, I got rid of Credit cards, I own my future, I am not in debt to it.
You can pay cash for a car, you can rent, you can buy anything. Credit is not needed.
Presidential FRAUD is chronic.
I have a Citibank card I have had for many years and use only for medical expenses. For many years I didn’t use it at all. The only charges are to my personal physician at a fairly large medical group and two eye groups. I also pay for prescriptions from my Medicare Advantage insurer.
In April or May, My statement included three identical $333 charges to Brookstone
I called the CC company and was referred to the fraud division where their immediately canceled the card and reissued a different one. They also canceled the charges and one additional of which I was not aware.
They would not discuss the fraud or possible source of the fraud. It had to come from one of a very limited number of medical vendors
The CC company fraud division is on the ball and instantly resolved the issue. There was some post event correspondence and a required affidavit that I did not make the charges in question.
Probably us the customers, through fees.
bert,
Thanks for sharing that story. I would be curious to know who ended up paying for the merchandise that was received? Did the merchant end up eating it?
what fees are you referring to? I dont pay any interest or fees on my account. In fact I get 1-5% cashback on all my purchases? another interesting question who pays for that? I am assuming the credit card companies cover the “cashback” with the fees that they charge the merchant for processing the charge. but what about the fraudulent charges? If the merchant is out the merchandise AND the money how does that help our economy?
King_Corey,
IF everyone paid cash for everything how often do you think stores would get robbed? Would that not be a higher risk for the employees who run the register?
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