I've had those calls on my machine that say "press x now" or something like that. I don't think I've noticed anything on my bill, but I'll go back and check it now. Thanks for posting this!!
<<shudder>> I don't know what is more scary - that they got away with it for so long, or how many consumers don't realize they got scammed.
I thought if you got credit card numbers from someone other than the consumer, and made charges to them without their authorization, it was stealing, and identity theft and you went to prison, not just some wrist slap, "don't do it again", and return some money if you have any left! In this case the calls, being automated, are no more than a pretense to creating the appearance of a consumer "authorization". If the consumer catches it in time, the bank is presumably stuck, unless they ignore the consumer's dispute. At $10 per charge they were trying to be too much trouble to be worth disputing. The reason I posted this is that illegitimate charges, even if disputed, may get passed about as collection accounts, where they will now be presumed to be legitimate. Merely having your credit card number is treated as "proof" that the consumer ordered something, just as having a SSN is "proof" that a consumer opened an account. None of these numbers are digital signatures capable of authenticating any transaction, or withstanding even simple attempts to acquire and fraudulently use them, and they are already in the files of innumerable businesses and other institutions, accessible by thousands of people, yet we persist in regarding them as practically equivalent to a notarized signature. It's kind of barbaric mysticism.
I'm thinking that often time consumers just paid it instead of fighting it because "it is only $10". On debit cards, the consumer is liable for any charge under $25, so i am hoping these were credit cards. It is unfortunate that banks do not have to protect consumers like credit card companies are required to.
That's why Clark Howard calls them "fake Visa" and "fake MasterCard." They try to sell you on the concept that they're the same, but they're not. And the money is out of your account. They won't put it back until they verify that you are right, in most cases. A secured credit card is better if you can't get a regular card.
The TV ads claiming your money is safe, and they will return it immediately, are a joke. Only teens have lives simple enough to have no serious repercussions from even a 1 day temporary drop in their checking accounts. Complete misrepresentation of the likely mess due to bounced checks.
That's for sure. My husband (W-A-YY before he was my husband) had a problem when he used a debit card at a hotel. They put a hold on the card for like 150-200% of the estimated room amount. That's in case you go to the bar, restaurant, etc and put it on your room, they know they're covered. When he checked out, they charged the card for the amount of the bill. Unfortunately, that doesn't release the hold. The hold didn't release for almost 10 days, and then only after he went back and raised you-know-what. Normal hold is 10 days to 2 weeks. On a credit card, it's no big deal. On a debit card, the hold stayed on his account and he bounced several checks. He had been with the bank for a while, and as I recall, they didn't really return the checks. They just charged him a fee. Of course, then the fee overdraws the account, etc. In his case, the bank refunded the fees and took care of it. But the hotel didn't even apologize. It was a good hotel, too--he was trying to impress me. We hadn't been going together very long. Shortly after that I made sure he got a REAL credit card! He hadn't seen any reason for one, because his debit card was "the same as" a credit card. NOT!!
It would be interesting to know where they obtained their list of credit card account numbers. This scam would not even be possible without this. Do VISA and MasterCard merchant contracts allow sale of customer lists with credit card numbers to other companies? I would think not just due to the likelyhood of scams like this. In one case a few years back (Taves, et al), the credit card lists were sold to a crook by a bank. http://www.faughnan.com/ccfraud.html#CPBank "... According to an LA Times story reporting on FTC investigations (Jeff Leeds, 9/11/99) CP Bank sold Ken Taves about 900,000 (90%) "of the credit card numbers that he allegedly used to run up $45.7 million in mostly bogus charges against consumers worldwide". [12] Apparently the bank made millions processing credit card transactions for adult industries. In addition to numbers harvested from the adult entertainment business, they also sold numbers from the two-third of the bank's 250 merchant accounts belonging to other merchant accounts including mail-order firms and retailers. ..."
There is a similar economic principle operating here as with the S&L debacle of the early 90s, the sub-prime loan market, and the past-SOL debt market. It is a variant of Gresham's Law, whereby cheapened and increasingly dubious business practices can actually grow and thrive if allowed to, at the expense of more legal, equitable, and legitimate businesses and practices. There is money to be made pretending to be one sort of business, credit risk, debt quality, product quality, or whatever, while actually being of poorer quality, as long as you don't have to scam the same mark in the future. Normally, lower quality products or paper, poorer credit risks, etc, are worth less, and valued as such by the market. This allows the possibility to obtain such "assets" at heavily discounted prices from face value, since their real value in legitimate commerce is small. But you can turn lead into gold, if you can create value that is not seen by the market. You may just have to break some laws to do it, but those risks are in the same mix of risks as the original asset, so if you have no scruples, it's just part of the business model.
Remember that ChoicePoint sold information to bogus companies. Perhaps the crooks set up one of those bogus companies and got the data that way. I didn't think the whole account number was there, but maybe if you're a member you get enough that you can figure it out. You could probably get the first part, that identifies the bank, easily enough. Assuming you are a company that subscribes. Maybe we should all form "Creditnet Associates" and subscribe to the CRAs and see what we get!!
It would be interesting to establish that if a merchant or bank provides bulk credit card information to another "merchant", who then is determined to have used that information fraudulently, that such sale or provision triggers California's id theft disclosure law: http://ag.ca.gov/idtheft/ "... Under the state law (AB 1386-Peace/CHAPTER 915, Stats of 2002.), notices must be given immediately following discovery of the privacy breach unless a law enforcement agency determines the notice would impede a criminal investigation. " These cases parallel the ChoicePoint information sale to criminal enterprises. Only by requiring disclosure with tracability to the original provider of the information used in the fraud, can liability be pinned on a responsible party.
My understanding was that credit reports to consumers could be requested with truncated account numbers, but credit reports to lenders (and presumably other "users") included complete account numbers. The front door is locked, but the back door is wide open.
That's exactly what I was thinking. If we don't hold companies and their officers accountable for their actions, this will never stop.
The first line of security for credit card transactions, as weak as it is, is that a "merchant" should not have a card number until a consumer provides it. If a merchant submits a charge, the system presumes that they got the number from the consumer.
