the criminal goes to a bank machine and withdraws the excess amount on that card. Later, of course, the check bounces.
A Vietnamese criminal named Minh C. To, also known as Big Ming, headed up a credit card ring that recruited legitimate cardholders to overpay their credit card accounts using counterfeit checks. Once the accounts were boosted by the checks, Big Ming and the recruits would start buying merchandise. Big Ming would fence the goods and split the profits with the recruits. To cap off the scheme, he had the recruits file for bankruptcy so they wouldn't be liable for the debt. Before Big Ming was stopped, the ring defrauded credit card issuers of more than $100 million.
So it pays for card companies to be very suspicious of any payments that exceed what a cardholder owes.
BANKING ON YOUR EMBARRASSMENT
And there are endless ingenious schemes criminals employ to tack on charges to your credit card. A group of thieves, apparently from Russia, created a phony adult porn website. They then stole 3 million credit card numbers from a computer database, and had the site bill each account ten dollars. Otherwise, they didn't use the cards. The amount was so small that many customers didn't even notice it. Others did, but were too embarrassed to report it as being unauthorized to the bank. Those ten dollar charges added up to $30 million in charges. Oddly enough, law enforcement authorities were convinced that the real purpose of this game was to launder money.
DEBIT CARDS - THE DOWNSIDE
A lot of consumers like the idea of using a debit card rather than a conventional credit card. With a debit card, money comes right out of your own bank account when you make a purchase. There's no bill thirty days later. By using a debit card, you're deprived of a month's worth of float, and since we're a country built on float, most people don't like them. I'm one of them. But there's another issue with them that bothers me. Since the money is immediately extracted from your account when you make a purchase, it becomes harder to contest a fraudulent charge. On a credit card, if something is on your statement that you didn't buy, you refuse to pay for it. With a debit card, the money's already gone and you've got to try to recover it. And the law doesn't protect you as well. If you don't report a lost card within two days, you can be liable for up to five hundred dollars. And if you don't report an unauthorized transaction within sixty days of when your latest statement was issued, there's no liability limit at all, just the size of your bank balance.
I don't own a debit card myself. Two of my three sons, though, use them. They tell me they don't like writing checks and that's why they have them. Young people, it seems, are bothered by the chore of writing checks, so it may be a generational thing.
SEARCH THAT WAITER
In the last few years, an entirely new approach to credit card fraud has opened up. A case that was reported in Time magazine told about a crook in Miami who had charged more than five hundred thousand dollars against a hundred different American Express cards. American Express had determined that none of the cards had been stolen. That meant they had to be counterfeit. But that was a lot of cards.
American Express ran elaborate computer analyses of the account numbers and their recent activity. What it found was startling. Each of the victimized cardholders had recently eaten dinner at one of two New York restaurants. What did that mean?
Federal agents in New York obtained the cooperation of the owner of one of the restaurants, a Brazilian steak house called The Plantation. He was an honest and reputable owner, and he was as puzzled as anyone about the seeming connection between his restaurant and the fraudulent cards. In short order, after searching the employee dressing room, the agents found the answer in an open locker: a skimmer.
A skimmer is one of the newest and much-prized toys on the frontlines of fraud. It's a compact, battery-powered black device, not much larger than a hand-held Palm or a cell phone. It has a slit in the front, and Velcro is affixed to the back. When a credit card is swiped through the slit, the skimmer reads and stores all of the data that is embedded on the card's magnetic stripe - the card number,