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Credit Is Bad Enough: Debit? Forget It
by Paul McGoldrick
My first personal experience of credit card fraud came while I was trying to buy a new piece of luggage at an outlet store on the Oregon coast. I was told that my card was “over my credit limit.”
It was a weekend, of course, and at that time the 24/7/365 mentality of the credit card companies had not really clicked into vogue. On the Monday I discovered that my account, with a fake card, had been charged well over $10,000 in perfume purchases from a Parisian vendor. The perpetrator had even charged his return ferry fare to the UK on the same account!
I was not out of pocket one penny – why should I have been? – but there is somehow a lingering mental feeling that perhaps one has been guilty of some indiscretion that allowed a criminal the opportunity to undertake his thieving ways. The credit card company was, of course, also not out of pocket because they simply debited the bad charges from the vendors involved.
That was not the case some years later when, back in Oregon again, someone copied my bank checking account details on to their own stock of checks, complete with a fake name (including gender) and address. These fake checks, presumably backed with fake ID, were used to make purchases at larger, busy, stores such as Target. I only became aware of the fraud after my next bank statement was reconciled.
What I found in that particular case was that an automatic credit was not to be forthcoming and your bank assumes you are guilty – probably because they will have to bear the costs of the fraud. I had to file a police report in my local community (which was very unwelcome to local statistics) and I had to make a long return drive to my bank branch in Tigard (outside Portland) to explain myself with the cancelled, bogus checks to support my claims.
The final outcome, and credit to my account, was welcome, but it brought home to me the fact that banks simply do not look at checks anymore. The whole process is so automated that signatures are not validated, dates are not verified, and account data goes unchecked.
At a later time I was jostled, innocently I thought, while using a bank ATM in the lobby of a very swish hotel in New York. I didn’t realize until the following morning that my ATM card had disappeared in the physical upset, but a call to the bank’s hotline stopped all further withdrawals on the account – leaving the crooks with only one day’s worth of the allowed monies. They weren’t caught but my card was gobbled up the next day by another ATM machine in Manhattan when they tried to reuse it.
My bank believed me on that one too, probably because I was able to repeat all the questions that I had been asked by the hotline. There isn’t much logic there, I know, but that’s the impression that I got from them.
My accounts have been mostly left alone for the last few years although I am now expecting a second replacement American Express card in the last months. The last experience was a phone call from AmEx Fraud Department to inquire whether I had attempted to charge $1 to an airline and $100 in gift certificates online. Both charges were, sensibly, declined.
This last attempted heist of my credit originated in Arizona, where I physically was at the time. It should be obvious to AmEx that the card data could only have been lifted at one particular establishment, and I hope that the petty nature of the attempted fraud will not deter them from keeping a closer eye on that location.
I will, again, not be out of pocket, although the inconvenience of having to wait for a replacement card is a little vexing when I need to book hotels for a trip to the UK next week. As always, AmEx encourages me to closely look at my next statement to ensure that there are no illegitimate charges on there. The UK trip is already vexing because it is to replace an abandoned journey as a result of the British Airways cabin crew strikes in late March and now the spewing of volcanic ash from the unpronounceable Fimmvorduhals volcano under the unpronounceable Eyjafjallajokull glacier in Iceland, with the resultant closing of much European air space, is adding yet another level of pressure to the journey. Is this a trip that is simply not meant to happen?
But what if this most recent AmEx problem had been with a debit card, instead of a credit card? You have no protection in claiming that debits were made by others. The absolute certainty, the banks say, that it was your debit card that was swiped, and that you must have entered your PIN number yourself, means that you are liable for every account deduction that there is, legitimate or not.
I have no confidence in the security of electronic transaction systems; and I doubt many of our engineering readers will have. I will not use online banking; I will not use debit cards; I will not make electronic payments. I am probably a new century Luddite but I also realize that these electronic systems, including ATMs, were all designed by the same companies that have designed voting machines. There is horrifying talk of making the use of checks obsolete in just a few years: another paper trail, just like those from voting machines, will be history – at the cost of the weakened consumer.
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