Resolving Credit Card Fraud

In December 1999, the Wall Street Journal ran an article about generals, admirals, and other military personnel who experienced identity theft and Internet fraud. An invisible party was able to secure enough information to obtain credit cards in the names of unsuspecting individuals. In turn, this Internet thief ordered thousands of dollars in merchandise with fraudulent, new cards. To make matters worse, this party used the Internet to inform other online thieves how they could steal using this technique.

Do you believe this is an isolated incident? Hundreds of times per day, the new online shoplifter is using his new abilities to obtain other’s credit information and steal from the many new companies conducting
e-commerce. A survey by the National Consumers League reveals Internet fraud has increased over 600% in the past year alone. The Internet and the Titanic are in the same class. The thieves and the iceberg have something in common — only a small percentage will of each are seen. The collision is inevitable. The world knows about the Titanic tragedy. Unfortunately, Internet companies have only began to shout, “Iceberg.” Will the knowledge needed to stop this collision come in time, or will companies continue to be blinded by the drive to make one more sale?

It is unlikely that an average world citizen will ever dealing with Internet fraud. When a thief decides to use someone else’s credit information to steal from e-commerce companies, the victim’s and the e-commerce company’s worlds change forever. Who is the victimized party here? The company who lost? Or the victim who had her credit information compromised? Both parties are the victims of the crime. The one who feels the greatest loss is the victim whose credit information was compromised. The victim will do her best to explain to the company that she did not place an order. The victim may be angry that more precautions were not taken before the order was fulfilled. The company may be angry that the victim did not take greater precautions with her credit information. The anger of both is justified. Since both parties have to blame someone, they blame each other. Consumers need to take steps quickly reduce their liability.

First, as a consumer you should make sure family members or friends did not use your credit information. If someone other than a family member has compromised your credit information, contact your bank or credit card company. The steps for handling and solving this problem are outlined on your statement and original credit card agreement. Follow the instructions carefully in order to avoid future problems. The merchant contacts are listed on your credit card statement. Never assume that your financial institution or credit card company will do this for you. File requested forms for disputes as instructed by the merchant, your financial institution or the credit card company.

You should also file a police report. It is not a waste of time. Many law enforcement agencies will investigate this new form of crime. If the merchant has the proper software and personnel, they will provide law enforcement agencies that contact them with the equivalent of an Internet fingerprint. The information captured should provide law enforcement enough information and documentation to obtain a subpoena to serve upon the domain administrator. The phone number and address from where the order was placed and the credit information given can be obtained.

You may not realize someone has obtained credit in your name. Thieves will do anything to steal or obtain your credit information including searching your garbage. Skimming is becoming popular. Skimming is the process of capturing of your credit card information in a small electronic device that stores the information from your magnetic strip. The information can be downloaded to a computer and used to steal merchandise worldwide. It can also be sold and someone can steal from merchants worldwide. Additionally, thieves can set up a computer to automatically run algorithms programs to order merchandise from e-commerce merchants. When an order is accepted, the program will automatically start the order process with another merchant.

This nightmare is what the e-commerce craze has imposed upon law-abiding citizens. Until safeguards are put in place and attention to this crisis increases, victims will be violated and the unsuspecting merchants will have goods stolen.

Financial institutions and credit companies need to develop communication channels to notify customers of purchases within a few minutes after a purchase. Individuals need to quickly verify mistakes on the credit statement. E-commerce merchants need to use the most advanced equipment and software to screen information with equipment and trained personnel. Consumers, companies, and agencies need to cooperate to slow the thieves down.

If you suspect that your credit card or other forms of credit have been compromised, the following steps should be taken as soon as possible: (1) call your financial institution or credit card company and review all previous suspected charges; (2) cancel the affected account; (3) follow the financial institution’s instructions, but remember merchants may have additional rules; (4) call the merchant(s) and ask them the procedures(s) needed to resolve fraudulent purchases; and (5) file a police report and ask the police if they investigate Internet fraud.

Merchants need to take a few simple suggestions: (1) listen when a consumer calls about Internet fraud; (2) explain how your company handles fraudulent purchases; (3) send necessary forms or paperwork to the consumer; and (4) fully-cooperate with the law enforcement agencies.

The problem of Internet fraud is in its infancy and the growth rate is alarming.Companies need to make the investment to slow Internet shoplifters. Since most consumers are innocent victims, companies need to take the burden of obtaining the proper software, security, and qualified personnel to maintain a safe and secure e-commerce order process.

Consumers should remember the merchant has not only lost the product, but also the money involved in purchasing the lost product.Merchants need to remember the consumer is the victim of a crime and the security we all need to have has just been taken away.

Al Cameron