Posts Tagged ‘credit card fraud’

Identity theft topped 2009’s list of customer complaints released by the Federal Trade Commission (FTC). It most frequently took the form of credit card fraud.

The report analyzed the complaints by type and location. Identity theft accounted for 278,078 complaints, or 21 percent of the total. The state with the most identity theft complaints was California, with 42,209. Florida, Arizona and Texas reported the highest number of such complaints per capita.

Third-party and creditor debt collection and Internet services also generated large numbers of complaints. The combined number of complaints related to these issues was still less than that for identity theft.

The complaints are received and stored by the Consumer Sentinel Network. Last year, there were more than 1.5 million complaints sent to the network, 54 percent of which were related to fraud. The median amount paid on these fraud complaints was $399, according to the report. Of the fraud-related complaints that reported initial contact, almost half pointed to e-mail.

Along with the list of top complaints, the FTC released a new animated video about filing a complaint. The video, which is available in Spanish, identifies various types of scams and directs consumers to ftc.gov/complaint to file a report.

Normally when we think of identity theft, we think of the many high-tech ways in which victims precious names are stolen and their bank accounts and years of their financial future drained with it. While it’s true that organized criminals are beginning to take more interest in perpetrating identity theft, the typical identity crook isn’t some high-tech computer hacker but rather an unsophisticated criminal who’s prowling for victims and taking advantage of how difficult it is to prosecute identity theft crimes.

Still, who’d think that a razor blade and some glue could be the tools of the trade? Some identity crooks are resorting to credit card shaving, a process whereby the crooks might purchase valid credit card numbers from other crooks and then manufacture a “new” card with that number. They don’t need an elaborate scheme and a fancy production system. They simply purchase a valid number for only a few dollars, then use the razor blade to shave appropriate numbers off of gift cards or expired credit cards and glue them onto another card — essentially manufacturing a card that resembles the valid credit card.

But wait a minute! How about that magnetic strip on the back of the card that’s supposed to hold matching information for the credit card? Well, that’s a simple security measure to avert. They scratch it so that it’s unreadable. Bring back any memories when you were making a valid transaction with your credit card and the card reader couldn’t read your card? Let me give you a hint: If the reader fails to read your card, the clerk takes a few extra seconds to key in the credit card information via the keypad.

To make it worse, being the victim of identity theft via credit card shaving might mean that it’ll take longer for you to detect. Credit card shaving isn’t going to be the method used if the crook physically possesses your credit card. That means your card is likely going to be comfortably tucked away into your wallet and you won’t be aware that there’s a fake duplicate out there being used to make purchases.

Under certain circumstances, credit card shaving could pose a real and increased identity theft risk to you. However, if you make a point to go through your credit card statements very thoroughly, you should be able to notice that unauthorized activity, report it to your credit card company and likely be responsible for only a small portion of that unauthorized activity.