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Beware of credit card fraud in recession
Visa credit cards.
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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.
I have worked at a number of retail and food chains between 98-05, and a few stores I worked for required us to ask for photo I.D. every time a credit purchase was made. The only people that ever seemed to mind were people that were either really rude to begin with, or wanted to make a point simply to make a point. Power trip. But a lot of customers really appreciated the policy.
I actually know a guy at a local post office who requires it, and though I don't mind, he is a little pushy about it. He hasn't helped me recently, but I kind of want to stick it to him one of these times just to make a point (though I know I would chicken out.)
A lot of people would simply write See I.D. (or CID for the weirdos) instead of signing. Though I think this is actually not accepted, endorsed, or enforced by the credit card companies. But a lot of employees perk up when they see it and want to show the customer they are paying attention and care.
I feel for Cynthia Chalker because I worked for managers who jumped to suspicion based solely on race. But you never know why someone doesn't ask for ID. You should also never rule out the idea that the particular store doesn't have a policy, that employee doesn't care about their job, or the employee forgot.
I don't think this is necessarily anything new that the credit card companies are allowing, but rather more of a holdover from years past. Hard to imagine, but just 20+ years ago credit cards were still being rung up onto a slip of carbon paper mechanically. I was doing it 10 years ago delivering pizza. I think it may simply be an antiquated system that needs some kinks worked out for the 21st century, and I wouldn't be surprised if the credit companies have something up their sleeve. Some companies added a photo to the card, so it seems they are trying things.
I was actually more shocked that I didn't need to show my I.D. when I went to vote. Same with voting,what if I own a credit card and I don't drive? Or it is revoked (god forbid.)?
Matt Baker has it right: require a pin. All you need is the card and nothing else but your noggin.
Overall though, I was a little disappointed in this piece, because if you talk to any person who actually WORKS in retail, you would know they have seen all sides of this and that it is nothing new.
I'm really glad Mr. Lazarus' hindsight is 20/20, we could surely learn a thing or two from him. Perhaps next he can tell us about how we shouldn't get forged dollar bills as change, I think it's about time someone finally brought that up.
They are supposed to be matching the signature on the back of your card to the signature that is signed for the transaction. Showing Photo ID is not part of the procedure. Why? Probably because it is so easy for Fake ID to be obtained. To give you an example, a couple years ago people were going around with fake credit cards and fake IDs to a number of Southern California gas stations. They would always go into the station (not pay at the pump) and handed the card and ID to the clerk immediately at the beginning of the transaction, before the clerk asked for any ID. It is psycological for a clerk to assume a customer who automatically and voluntarily shows ID with a credit card is honest, so of course no signature check was done. Long store short, these were counterfeit cards and counterfeit IDs, but the cards swiped and auth codes were sent to the stations, so the transactions went through and were later found to be fraud. Checking the ID did nothing. In fact, had the clerks really checked the card and signature closely, they may have caught on that the cards were counterfeit.
The cards have security features on them that can be visually checked by a clerk.
If someone wants to use your credit card, they will use it. For all you know, the person who took your card had fake ID. It is also possible this was an inside job and whoever took your card had connections at all of these stores so your card was run without question. Checking ID for credit card use creates a false sense of security and actually exposes the majority of card users (who are honest) to identity theft and illegal recording of their personal informtaion. You show that card and ID, the image of that card and ID is recorded on the store's security camera for who knows who to see (and potentially use in the wrong ways).
The credit card fraud story has a twist to it.Crooks now have computer programs that know a valid credit card number. Then they get fake ID to match the card
number. It happened to me. I never lost my card or ID. The bank caught on after the second charge and cancelled the card. Showing your photo ID does nothing to stop fraud.
Only problem with PIN every transaction is 1. increase in cost to have secure PIN pad's installed at every credit card terminal, 2. increased vulnerability of your PIN # coming out with constant usage... good and bad to everything.
RE: BWB (Buying While Black) definitely true. This happens with certain groups of white people also though, people with a Russian or Eastern European background for example... definitely legitimate complaint.
I prefer not to show my ID to anyone unless required by law. My ID has my address and my driver's license number, information that I want to protect more than my credit cards.
The surest way to protect your credit cards is to sign them. If the merchant were to check the signature on the card against the signature on the receipt, it would be easy to determine if the card is legit.
I also make sure my cards are secure, either on my person or locked in glove box in my locked and alarmed vehicle. I also only have two.
For info on merchants asking for ID, see page 29 on the VISA merchant rules. If merchants just followed these rules, it would alleviate a lot of credit card fraud problems.
http://usa.visa.com/download/merchants/rules_for_visa_merchants.pdf
I am sorry mr. lazarus was the victim of this crime. However, my experience as a dark-skinned african american woman is that i am almost always asked for ID when i make a purchase with my credit card. Whether the purchase is $10 or $1000. On a recent trip to LA on business, this was my experience EVERY transaction. So much so, I assumed there was some sort of local law. It wasn't until my white colleague used a credit card for a purchase and was not asked for ID did i realize this was happening. Long story short, i think it all depends on what you look like if you are asked to produce id with your credit card purchase. For the record, it also happens in new york city, where i live, just not as often.
