| In this issue of our series on credit card | | | | cut, if for no other reason than to make sure |
| fraud we're going to dig a little deeper into | | | | he keeps his mouth shut. In some cases the |
| some facts and figures that will most | | | | money goes to the merchant and the bank. |
| certainly raise the hair on the back of your | | | | Yes, there are some crooked banks out there, |
| neck. | | | | especially overseas in countries that will |
| | | | remain nameless for fear of gun toting |
| In plain dollars and cents, a single credit | | | | gangsters being sent over here to settle a |
| card fraud can, and has, accounted for about | | | | score. |
| forty-million dollars in just one year alone. | | | | |
| That translates to about 900,000 victims in | | | | If, however, the fraud IS detected then the |
| 22 countries. That's a lot of people and a | | | | money does get repaid to the victim but in |
| lot of money and that's just ONE fraud. For | | | | most cases less than the under $50 amount |
| those wondering, this particular fraud | | | | that the banks have to pay. In other words, |
| involved adult web sites, but credit card | | | | the victim doesn't completely come away from |
| fraud was going on long before the Internet | | | | this unscathed. Many European banks won't |
| came to be. | | | | pay up at all. As for the merchant account, |
| | | | they don't want to suffer losses, so many |
| What IS new is the ability to run this fraud | | | | times they will simply just close up and |
| across the entire world with just a mouse | | | | reopen under a new name. |
| click and attack thousands of people in a | | | | |
| very short period of time. The Internet has | | | | Because the system itself is weak, the |
| simply given a very old scam new legs. It | | | | thieves themselves are rarely caught, and |
| has brutally exposed the security problems | | | | then when they are, they rarely get punished |
| with our credit card system and takes | | | | to the extent that they should. The problem |
| advantage of these leaks to the max. | | | | with the system is that is was designed for |
| | | | buying physical goods with the card holder |
| The particular fraud mentioned up top was | | | | being physically present. With Internet |
| perpetrated by a company called J K | | | | transactions the cardholder no longer has to |
| Publications. If you want to read about the | | | | sign for the transaction, at least not in the |
| details of this fraud you can do so in the | | | | usual way, and this makes it way too easy to |
| August 1999 issue of Scientific American. | | | | cheat the system. |
| Needless to say, it is some juicy reading. | | | | |
| | | | In our next article in this series we'll look |
| So just where does the money go when a | | | | more into the problems of the system and what |
| company or merchant or even individual | | | | victims of fraud can do to help protect |
| perpetrates a credit card fraud? Well, if the | | | | themselves, or for that matter prevent |
| fraud goes undetected in most cases the money | | | | themselves from being the victim of credit |
| goes to the merchant himself with the middle | | | | card fraud. |
| man, if there is one, usually getting paid a | | | | |