Fraud Alert…this isn’t going to be pretty

tamrawilson Uncategorized

“Hi. It’s Capitol One. Did you just spend $19.99 at iTunes with card ending 5206?”

When I woke up to this text last Thursday, I knew it wasn’t going to be a good day.

Someone had swiped my credit card data and run up some charges. They’d first tested the account with a .99 charge to iTunes. Then the crook made three more charges of $19.99 to iTunes within a few minutes—while I was asleep. Then came a fourth iTunes purchase of $20.98 before Capitol One got wise.

After more than 90 minutes on the phone, I learned more disturbing news. The thief had tried to buy equipment from Hometics for nearly $375, but that charge was declined. Capitol One’s consumer tracking program realized that I don’t ordinarily buy fancy massagers in the middle of the night. Before that, the fraudster had tried to purchase $1 in beauty supplies to ensure that my card was valid.

I spent the better part of two hours trying to straighten the mess out, going over my on-line statement, speaking to several customer service representatives at Capitol One and iTunes—dealing with the inevitable phone loop. “Please state your name, the last four digits of your card number, your mother’s maiden name, the name of your first pet, your mailing address with zip code.” You know the security drill.

The crook didn’t have to do any of this while making off with $80 in merchandise charged to my account. The charges are technically still on my account, pending investigation by iTunes and Capitol One. That might take days or weeks.

So who’s really holding the bag here?

Ultimately it’s other customers, i.e. you and me. We’ll pay with higher fees for goods and services, fancier technology to prevent fraud, more hassle when opening a credit account, more irritating security questions.

While I had the customer service rep on the line, I asked him what the chances of catching the crook were. His reply: “Less than one percent.”

This one incident cost me and customer service representatives at least an hour of our time. And then Fed Ex got in on the act. After I changed the passwords for my iTunes and credit card accounts, Capitol One shipped a new card overnight to the tune of $25.

I figure this incident essentially stole more than $100 in real goods and services plus inconvenience. I’m convinced that my card was electronically skimmed a day or two earlier. This would explain how the swindler had my number, expiration date and CVV code and was in such a hurry to run up a bill.

The good news is that the spree was caught early, and my credit card company covers the loss. And it could have been far worse. The crook could have stolen my card information while I was on an extended stay out of town and I had no other credit card to use, which is all the more reason to carry more than one credit card.

Credit card theft is a multi-billion dollar enterprise these days.

And while consumers bemoan how companies track purchases and consumer behavior, few consider how that very technology can be their friend. Without tracking, this crook wouldn’t have been caught until I reviewed my next credit card statement. The thief would have run up a heftier bill for me, the merchants and my credit card company to sort out and ultimately pay for.

Yes, I will pay for it. So will you. Merchants and credit card companies don’t write off such losses and forget it.

Had I been a victim of identity theft, the stakes would have been far higher. According to the Federal Trade Commission, recovering from identity theft takes an average of six months and 200 hours of work. Think about that the next time you answer security questions and get caught in the phone loop with customer service.

Meanwhile the crop of thieves keeps growing because it’s so lucrative and the chances of getting caught are so low.

Nilson Report estimates that in 2016, losses from credit card fraud topped $24.71 billion. That’s billion with a “B.” And that figure was 12 percent higher than in 2015.

I know my incident last Thursday wasn’t unique, but it is another sign of the times, and it isn’t pretty.