I don't understand credit card theft

[The Sauce]

I had unauthorized charges on my Citibank card for the second time now. It's such a hastle to go through the whole process of cancelling the card, rerouting all of my automated billing, and signing afidavits on the charges that weren't mine.

Whenever my card gets hijacked they know and freeze it within like 6-12 hours. This time I got called at home the same morning all the charges were made. That is usually quicker than any retailers can even pack and ship out. So how does anyone get away with this? Won't they get busted picking up the goods at the place they have them delivered to? Doesn't all this stuff even get cancelled or intercepted in shipping long before they get it? I mean the FBI has like 5 days to sit around and wait for someone to come pick it up at the delivery site.

 

[Safeway]

The FBI does not sit at every single drop site around the country. That would be impossible. The items are shipped and received.

 

[49erinnc]

Did you see Dateline NBC last night? Great show on CC fraud via internet/email phishing. Pretty amazing at how the whole process worked. NBC purposely allowed credit cards with 5K balances to become exposed. Each one was maxed out in a matter of a few minutes. Most were overseas purchases for electronics that were bought here in the US that used a "drop." Meaning, there was an address, usually residential, where the goods were delivered. Then the person was to ship them to their destination. Typically, the drop person was lied to and totally scammed out of a lot of money.

NBC even created their own online store/delivery service to track the shipments. It was rather fascinating but at the same time, very scary. Someone here probably created a thread about last night's show but I didn't search around for it.

 

[evident]

when i had my cc stolen from my dorm they went into a radioshack in philly and bought about $1000 worth of electronics... i told the local police and they were reluctant to do anything, all they do is sit on their ass and write tickets to college kids, so it's pretty easy to get away with, unfortunately

 

[DrPizza]

I've always wondered the same thing but in a different sort of way:

Why don't the credit card companies get more aggressive with these things? It seems that the attitude of the credit card companies is "we don't really bother to pursue fraud, because it would cost a lot of money to regain that $100 item." This has spawned the attitude of the credit card frauders of "don't worry about it - you'll never get caught. They never follow up."

 

[kranky]

Unfortunately, you can count on this problem getting worse all the time because bad guys understand that no one cares. There have been cases where the victim tracked down who the thief was, called the authorities in the thief's city, and they wouldn't do anything because it's too trivial. So the bad guys see that as long as they make 100 fraudulent smaller transactions instead of one big one, no one is going to prosecute. There are very few crimes you can commit with no chance of anyone seeing you in the act and where it takes a great deal of effort to build a case (find IPs, get court order to force ISP to release records, use records to find bad guy's PC - maybe).

I predict that within a couple years, either there will be a drastic change in how we pay for things online, or half the people in the country are going to have to deal with fraudulent charges and all the aggravation that comes with it, as you have seen the hard way.

 

[slsmnaz]

Originally posted by: 49erinnc
Did you see Dateline NBC last night? Great show on CC fraud via internet/email phishing. Pretty amazing at how the whole process worked. NBC purposely allowed credit cards with 5K balances to become exposed. Each one was maxed out in a matter of a few minutes. Most were overseas purchases for electronics that were bought here in the US that used a "drop." Meaning, there was an address, usually residential, where the goods were delivered. Then the person was to ship them to their destination. Typically, the drop person was lied to and totally scammed out of a lot of money.

NBC even created their own online store/delivery service to track the shipments. It was rather fascinating but at the same time, very scary. Someone here probably created a thread about last night's show but I didn't search around for it.

That was a great show last night. I'm amazed at how stupid some people can be some times (like the guy who thought he was gonna marry a model :laugh

 

[PingSpike]

Who foots the bill on fraudulant charges? Do the merchants ever take a hit?

 

[kranky]

Originally posted by: PingSpike
Who foots the bill on fraudulant charges? Do the merchants ever take a hit?

It's almost always the merchant who gets stuck.

 

[The Sauce]

Originally posted by: Safeway
The FBI does not sit at every single drop site around the country. That would be impossible. The items are shipped and received.

Yah maybe, but really if you think about it all the CC company has to do is call the retailer and shipping company and have the order frozen before delivery. And that would be that. Not much cost there. Just hire someone to sit around and make those phone calls. How hard could that be?

 

[Safeway]

Originally posted by: Snatchface

Originally posted by: Safeway
The FBI does not sit at every single drop site around the country. That would be impossible. The items are shipped and received.

Yah maybe, but really if you think about it all the CC company has to do is call the retailer and shipping company and have the order frozen before delivery. And that would be that. Not much cost there. Just hire someone to sit around and make those phone calls. How hard could that be?

It happens far too often for CC companies to do what you just described. They spend to much time on the phone with credit card debt ridden individuals already. It's a matter of time and feasibility.

 

[Jeff7]

Originally posted by: DrPizza
I've always wondered the same thing but in a different sort of way:

Why don't the credit card companies get more aggressive with these things? It seems that the attitude of the credit card companies is "we don't really bother to pursue fraud, because it would cost a lot of money to regain that $100 item." This has spawned the attitude of the credit card frauders of "don't worry about it - you'll never get caught. They never follow up."

It's the same attitude with the electric companies: Don't bother trimming trees or branches near power lines, just let them fall. It's cheaper to clean up afterwards.

 

[Safeway]

Originally posted by: Jeff7

Originally posted by: DrPizza
I've always wondered the same thing but in a different sort of way:

Why don't the credit card companies get more aggressive with these things? It seems that the attitude of the credit card companies is "we don't really bother to pursue fraud, because it would cost a lot of money to regain that $100 item." This has spawned the attitude of the credit card frauders of "don't worry about it - you'll never get caught. They never follow up."

It's the same attitude with the electric companies: Don't bother trimming trees or branches near power lines, just let them fall. It's cheaper to clean up afterwards.

Negative. Power failures cost millions upon millions of dollars. Electric companies strive for 100% reliability and utilize preventative line maintenance to prevent frequent outages. Frequent outages would cost the city millions upon millions of dollars in lost opportunity. Further, the electric companies aren't making any money is power isn't being delivered.

 

[imported_Imp]

I've always wondered why credit card security was such a joke. At least with a debit card, you need a PIN number for every purchase. Why not for CCs? If we're talking convenience, I think it's easier pushing in a PIN than signing my same ugly signature every time. As for online purchases, they finally have a voluntary 'Verified by VISA', but keyword is voluntary. It's good that most card CC companies have a $50 max fraudulent charges clause, but it's pretty stupid either way you look at it.

 

[Safeway]

Originally posted by: Imp
I've always wondered why credit card security was such a joke. At least with a debit card, you need a PIN number for every purchase. Why not for CCs? If we're talking convenience, I think it's easier pushing in a PIN than signing my same ugly signature every time. As for online purchases, they finally have a voluntary 'Verified by VISA', but keyword is voluntary. It's good that most card CC companies have a $50 max fraudulent charges clause, but it's pretty stupid either way you look at it.

For charges under $25, you don't need a signature.

 

[TankGuys]

Originally posted by: DrPizza
I've always wondered the same thing but in a different sort of way:

Why don't the credit card companies get more aggressive with these things? It seems that the attitude of the credit card companies is "we don't really bother to pursue fraud, because it would cost a lot of money to regain that $100 item." This has spawned the attitude of the credit card frauders of "don't worry about it - you'll never get caught. They never follow up."

They won't work hard to curb the problem because it doesn't hurt them at all. In fact, it *helps* them.

If someone steals your credit card and makes a purchase with it, here's what happens:

1 - Purchase is made. Credit card takes a percentage of the sale as a fee (2-4%)
2 - You call and dispute the charge.
3 - Credit card company takes that money back away from the merchant (without giving back a refund on the processing fees :|
4 - Credit card company further charges the merchant $20-$40 as a "chargeback fee"
5 - CC company gives the customer their money back.

So, as you can see, fraudulent charges help the CC companies just as much as a regular one - if not more so, since they not only get the standard processing fee, but they also collect the chargeback fee.

It's a painful racket, and we merchants are the ones who bear the OVERWHELMING majority of the burden (though this ends up being built in as higher prices for consumers...)

 

[narcotic]

Originally posted by: DrPizza
I've always wondered the same thing but in a different sort of way:

Why don't the credit card companies get more aggressive with these things? It seems that the attitude of the credit card companies is "we don't really bother to pursue fraud, because it would cost a lot of money to regain that $100 item." This has spawned the attitude of the credit card frauders of "don't worry about it - you'll never get caught. They never follow up."

CC companies as well as banks invest millions of $$$ in fraud detection systems. Most of them are pretty efficient, though you always have extreme cases.
Basically, you should know that with any CC (by U.S law) you (the customer) are fully insured against such frauds, unless it was specifically noted to you otherwise.

 

[DeeKnow]

Originally posted by: DrPizza
I've always wondered the same thing but in a different sort of way:

Why don't the credit card companies get more aggressive with these things? It seems that the attitude of the credit card companies is "we don't really bother to pursue fraud, because it would cost a lot of money to regain that $100 item." This has spawned the attitude of the credit card frauders of "don't worry about it - you'll never get caught. They never follow up."

the reason the CC companies dont try any harder is because they dont have too..

you and I and every other sucker who lets them take 2.5% to 3.5% of every single purchase they make - we pay for the fraud

 

[KK]

you wonder how someone could be as dumb as those idiots that dateline had on last night. The one guy using his own money to ship the packages abroad. who breeds this type of stupidity.

 

[Mxylplyx]

Technology should address this soon enough. Just dont allow items to be shipped to any address not registered with the cart itself. This can be addressed by enhancing the pre-auth process for web purchases. For POS purchases, verifying ID's should take care of about 90% of fraud cases, which is something that is hardly ever done. The stupid signature on the back of the card that they check is worthless.

 

[SarcasticDwarf]

While the credit card companies are not making a huge effort to stop it, the real problem is that local police departments do not investigate more than the tiniest fraction of electronic crimes.

 

[imported_Imp]

Originally posted by: Safeway

Originally posted by: Imp
I've always wondered why credit card security was such a joke. At least with a debit card, you need a PIN number for every purchase. Why not for CCs? If we're talking convenience, I think it's easier pushing in a PIN than signing my same ugly signature every time. As for online purchases, they finally have a voluntary 'Verified by VISA', but keyword is voluntary. It's good that most card CC companies have a $50 max fraudulent charges clause, but it's pretty stupid either way you look at it.

For charges under $25, you don't need a signature.

I always have to sign for <$25 items except food, and even some restaurants make me sign.

 

[Anghang]

Originally posted by: kranky

Originally posted by: PingSpike
Who foots the bill on fraudulant charges? Do the merchants ever take a hit?

It's almost always the merchant who gets stuck.

merchant or the bank takes the hit, consumer is liable for up to $50 max.

except debit cards, there's practically no coverage whatsoever if your debit card is stolen and your account is cleaned out, overdrafted, etc...that will all fall on the consumer's shoulders...

i never activated any of my debit cards even though the bank keeps mailing them to me...

 

[nweaver]

Originally posted by: Mxylplyx
Technology should address this soon enough. Just dont allow items to be shipped to any address not registered with the cart itself. This can be addressed by enhancing the pre-auth process for web purchases. For POS purchases, verifying ID's should take care of about 90% of fraud cases, which is something that is hardly ever done. The stupid signature on the back of the card that they check is worthless.

Some good retailers WON'T ship unless it's a bank verified address (NewEgg is one)

I have had my sig checked, like 20 times in the last year. I have my card signed, with "SEE ID" in red over the top. I have had less then half actually ask to see my ID after looking. I thank them for checking every single time.

 

[Safeway]

Originally posted by: Imp

Originally posted by: Safeway

Originally posted by: Imp
I've always wondered why credit card security was such a joke. At least with a debit card, you need a PIN number for every purchase. Why not for CCs? If we're talking convenience, I think it's easier pushing in a PIN than signing my same ugly signature every time. As for online purchases, they finally have a voluntary 'Verified by VISA', but keyword is voluntary. It's good that most card CC companies have a $50 max fraudulent charges clause, but it's pretty stupid either way you look at it.

For charges under $25, you don't need a signature.

I always have to sign for <$25 items except food, and even some restaurants make me sign.

Did you read my post? You don't need a signature for charges under $25. It does not matter what you bought, as long as it is under $25. You seem to think that since restaurants and stores still require a signature, the credit agencies require a signature. It is not true.

Signatures are no longer required for charges under $25.