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For Your Protection: Debit card fraud

debit card
Posted at 6:00 PM, May 21, 2013
and last updated 2013-05-21 14:35:36-04

TALLAHASSEE, Fla. (WTXL) -- Just how easy is it for a thief to steal your debit card, your cash, and your identity? Investigators say easier than you may think.

Four months ago the United States Justice Department announced charges in what they say was one of the largest credit card scams ever.

Eighteen people are charged with stealing thousands of credit cards, creating thousands of fake identities, and stealing at least $200 million. As a whole, the Justice Department reports millions of people are victimized each year in this multi-billion dollar industry.

Investigators say the reality is you very well could also be a victim of credit card thieves.

Detective Dave Teems with the Leon County Sheriff's Office says credit card theft is "one of the biggest things we work."

Teems says credit card theft is a big problem for law enforcement throughout North Florida and South Georgia, in part, because personal information and debit-credit cards themselves can be easily stolen.

"We do see a lot of local burglaries where the first thing over night, someone breaks into a car, they go and immediately try to use the card as quickly as possible," Teems said.

Teems says thieves will often first try to make a small purchase. If the card works, the thieves will then go back and try to make more expensive purchases.

"In one case we had numerous cards that were taken and the first thing they did was run to Walmart at 2:00 a.m. and buy three Playstations and some TVs they can then sell on Craigslist or Ebay or even on the street to try to make quick money on," Detective Teems said.

Once your card is stolen, investigators say it's very easy for thieves to actually use the debit-credit card.

WTXL put it to the test, sending two employees to several local stores. Each time our employees were able to make purchases using a debit card that wasn't theirs. Not once did they ever need a pin code, identification, or asked any questions that may have stopped them from using someone else's debit card.

We wanted to know why store employees don't ask customers for an ID before allowing a purchase to be made. We found the answer inside the policies of the major credit card companies like Visa and MasterCard.

Representatives with both companies confirm it is their policy that "...a merchant must not refuse to complete a transaction solely because a cardholder refuses to provide additional identification information."

MasterCards policy: "9.11.2 Cardholder Identification - A merchant must not refuse to complete a MasterCard card transaction solely because a cardholder who has complied with the conditions for presentment of a card at the POI (point of purchase) refuses to provide additional identification information, except as specifically permitted or required by the Standards. A merchant may require additional identification from the cardholder if the information is required to complete the transaction, such as for shipping purposes. A merchant in a country or region that supports use of the MasterCard Address Verification Service (AVS) may require the cardholder's ZIP or postal code to complete a cardholder-activated terminal (CAT) transaction, or the cardholder's address and ZIP or postal code to complete a mail order, phone order, or e-commerce transaction.

In written statements to WTXL (see full statements below), both Visa and MasterCard say the policies are designed to help protect your personal information. Both companies also say in the event your card is stolen, customers are protected from being charged.

Ultimately, it's consumers who likely still end up paying the price for credit card fraud.

"We all lose," said John Flemming, director of communications for Florida Retail Association, a Tallahassee-based trade organization that represents small and large retail companies. "Depending on where the fraud occurs, at the bank level, at the worst level the merchant is going to have to eat the cost. Ultimately the consumer pays."

Fleming says retailers are working with law enforcement to keep an eye on credit card theft and find ways to cut down on it.

One way businesses can do that, he says, is compare customer signatures.

"First line of defense for a business in credit card fraud is the signature on the card," Fleming said. "if you sign the card and sign the receipts that's enough to protect the business from credit card fraud."

While policies may limit what businesses can do, Fleming and Detective Teems both say it's important for store employees and customers to be aware of their surrounding. Unusual behavior for example, they say, can often be a sign of credit card fraud. In those cases both say you should alert law enforcement.

As for the businesses we visited, we got a statement from one, Target. A company spokeswoman says "We protect our guests by relying on election authorization by the cardholder's bank as the primary approval method for every credit transaction." (See full statement below).

For consumers, Detective Dave Teems says it's best practice to keep a close eye on all of your accounts and check them regularly. If you suspect fraud you should contact local law enforcement and your credit card company and/or bank. Leon County Sheriff's Office also provides a credit card fraud packet you can fill out and submit to the credit reporting agencies in the event you are the victim of a credit card thief.

 

STATEMENT FROM TARGET

"Target is committed to protecting guests against fraudulent purchases. We protect our guests by relying on electronic authorization by the cardholder's bank as the primary approval method for every credit transaction.

This system allows for fast and accurate transactions without the need to check for photo ID and is the system preferred by credit card companies. It has helped control industry-wide fraud losses more effectively than signature comparison. Cardholders are not responsible for fraudulent purchases.

If a guest suspects fraudulent purchases, he or she should immediately report it to the card-issuing bank. It is the responsibility of the credit card company to investigate any case of a potential fraudulent purchase. Target fully cooperates with these types of investigations and provides all requested documentation."

-Jessica Deede, Target spokesperson

 

RESPONSE FROM VISA

"A merchant may ask a Visa cardholder for identification prior to completing their purchase. However, the merchant cannot require identification as a condition of acceptance. If the cardholder refuses to show identification, the merchant must still complete the purchase. While processing the card, the merchant should complete the transaction if they have received an electronic authorization from the issuer.

"Visa invests heavily in advanced fraud-fighting technologies, and we continue to develop and deploy new and innovative programs to protect cardholders. Visa's efforts have reduced global fraud rates to near historic lows, enabling cardholders to continue to use Visa with confidence. While Visa does a lot of work behind the scenes to secure payments, cardholders have a role to play too. Visa recommends cardholders keep in mind these three security basics to help keep their payment information safe:

1. Check your financial statements regularly, and alert your financial institution if you spot any suspicious activity.

2. Report lost or stolen cards immediately.

3. Be suspicious of any unsolicited requests for personal or financial information. Verify the legitimacy of the request first - it could be fraud at work.

"Importantly, in the unlikely event that fraud should occur, Visa cardholders are protected by Visa's zero liability policy, which means they pay nothing in the unlikely event of an unauthorized purchase. For more security tips, visit www.VisaSecuritySense.com or follow us on Twitter @VisaSecurity."

 

RESPONSE FROM MASTERCARD

What is MasterCard's policy when it comes to businesses requiring customers to show or not show ID when using their MasterCard?

A merchant must not refuse to complete a MasterCard card transaction solely because a cardholder who has complied with the conditions for presentment of a card at the POI refuses to provide additional identification information, except as specifically permitted or required by the Standards. A merchant may require additional identification from the cardholder if the information is required to complete the transaction, such as for shipping purposes. A merchant in a country or region that supports use of the MasterCard Address Verification Service (AVS) may require the cardholder's ZIP or postal code to complete a cardholder-activated terminal (CAT) transaction, or the cardholder's address and ZIP or postal code to complete a mail order, phone order, or e-commerce transaction.

This policy is similar to other credit/debit card companies. What's the thought as to why the policy is important?

MasterCard designed this policy to protect identity and privacy of the cardholder from handing over their address to merchants.

How does this policy factor into potential fraud? Having someone use another person's or a stolen credit card?

This policy doesn't discernibly factor into fraud. DCardholders are always protected with our Zero Liability program and the normal dispute process should they notice a fraudulent transaction on their account. Best safety tips for consumers to help avoid fraud?

A few safety tips to help consumers avoid fraud include:

· Never provide your card or card account information to anyone you do not know.

· Check your credit rating from one of the credit bureaus regularly to look for suspicious entries.

· Scrutinize your credit card statement for unauthorized purchases.

· Never use online banking accounts in unlocked wireless environments where information can be easily stolen.

Best safety tips for businesses. What can they do/should they be doing to follow MasterCard policy but help keep fraud potential down?

· Check the embossed numbers on the front of the card. All MasterCard account numbers start with the number 5 (five). If an account number is embossed, the embossing should be clear and uniform in size and spacing, and extend into the hologram (if a hologram is on the card face). The last four digits of the account number on the front of the card should match the four digits printed on the signature panel on the back of the card. These numbers should not be chipped away. And no "halos" of previous numbers should appear under the embossed account number.

· Examine the hologram. The three-dimensional hologram with interlocking globes should reflect light and appear to move when the front of the card is rotated.

· Compare signatures. The back of the card must be signed, and the signature should reasonably compare to the cardholder signature on the sales receipt. Check to be sure that it has not been taped over, mutilated, erased or altered in any suspicious manner. The word "Void" on the signature panel indicates that the signature panel has been tampered with.

· Look at the magnetic stripe. The magnetic stripe on the back of the card should appear smooth and straight, with no signs of tampering.

· Become familiar with new card designs.

· Examine the expiration date.

· Is the customer using the card the actual cardholder? A MasterCard card is non-transferable. Check to see that the signature on the sales receipt matches the signature on the back of the card. Also, be observant of the customer's behavior-does it seem normal, or does the person appear uneasy?

Just how easy is it for a thief to steal your debit card, your cash, and your identity?