Beware of credit card fraud in recession

Visa credit cards.

TEXT OF INTERVIEW

Steve Chiotakis: Los Angeles Times columnist David Lazarus had his own bout with identity theft. His credit cards were stolen from his gym locker recently. And the crooks went on a city-wide spending spree. David, it's eery to think about the frequency of these types of crimes. What was it that stood out to you?

David Lazarus: I was astonished at how quickly this happened, because within a half hour of my theft, the guy's at Toys R Us, running up nearly $500 in goodies -- I don't even do that at Christmas time, for goodness sakes! Then he's immediately at Best Buy, buying an Apple laptop, then off to another Toys R Us, then back to the same Best Buy, and then off to Target, where he tries to buy $575 worth of stuff. And thank goodness the banks are now guessing that something is amiss and turning down the transactions.

Chiotakis: They put the kabash on it.

Lazarus: It took 'em long enough, but it finally, the system starting working.

Chiotakis: So you went to the police to report all this, what did they tell you about how common this is?

Lazarus: I was amazed, when I was giving my police report and the officer who took my report and the officer who took my report said you know what, we have some shifts where the only crimes coming over the transom are identity theft and credit card fraud. He said that since the economy went downhill, these crimes have started going through the roof.

Chiotakis: You know, I hardly ever see anyone checking my photo ID when I pull out the credit card to charge something on it. What did the card company say about the fact that the thief was not showing ID for these purchases?

Lazarus: Well, when I started investigating what had happened to me, that was the biggest surprise of all. It turns out that credit card associations like Visa and Mastercard say that only a signature check is sufficient. They can check IDs if they want to, but -- and this is very important -- it is not ground for turning down any transactions, unless the merchant sees some other grounds for being suspicious.

Chiotakis: Have we really gotten to a place in time where the inconvenience and the delay of checking a photo ID outweigh the costs and the ills of identity theft?

Lazarus: I think it's astonishing that we are now so innured to the idea that plastic is the way to go, and that even more importantly fraud is a part of the equation, that we're willing to accept fraud for the sake of convenience. Moreover that the credit card companies are prepared to swallow a degree of fraud so that they can get the $3 trillion in transactions in credit and debit card purchases every year -- that to me is the more extraordinary thing. It's like saying, you know, it's OK if your house burns down, 'cause we'll rebuild it. A smarter approach is to say, look, let's prevent the house from burning down in the first place.

Chiotakis: All right, so what do consumers do to protect themselves against this kind of fraud?

Lazarus: Check your plastic. Use a good, strong lock at the gym, for goodness' sakes. But always stay on top of your credit card bills online. And then when this does happen -- and it probably will happen -- you can do a fraud alert on your credit file. But bottom line is, it's all about you. You have to watch your own situation, no one else is going to watch it for you.

Chiotakis: David Lazarus, columnist from The Los Angeles Times. Thanks for joining us.

Lazarus: Thanks for having me.

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