PI Newswire

Ask any of the estimated 9 million Americans who become victims of identity theft each year: getting billed for someone else’s credit card charges stinks.

Enter the “radio frequency identification” (RFID) credit card. Designed to provide extra layers of security against identity theft, an RFID card transmits credit card information through radio waves from a chip embedded in the card.. (The cards also have a magnetic stripe on the back so you can swipe it in the traditional way.)

If you’re using a card with an RFID chip, and your merchant has a compatible card reader, you don’t have to swipe your card when making a transaction. You merely hold your card within one to four inches of the card scanner. This practice raises questions as to how safe the technology is and whether you should protect your RFID card with a special wallet or card sleeve. Here’s the skinny on RFID credit cards.

Benefits of the RFID card

Available through credit card companies including Visa, MasterCard, and American Express, RFID cards eliminate certain security hazards posed by traditional cards, but could make you vulnerable to others. According to Denis G. Kelly, author of “The Official Identity Theft Prevention Handbook” and chairman of the Identity Ambassador Commission in Seattle, the security benefits of the RFID cards are threefold: limited card exposure, data encryption and new authentication codes.

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South Florida shoppers beware. While you’re looking for gifts, criminals are on the prowl for your banking information.

Credit card “skimming” — the use of electronic gadgets to steal credit and debit card information — is not new in South Florida, but it’s on the rise, especially around the holidays, said U.S. Secret Service agent James Porter in Miami. Porter specializes in electronic crimes.

People are just making more purchases around this time of year, and with the increase in credit card activity, there are often more chances for skimming,” Porter said.

With the stolen credit and debit card numbers, thieves make about $8 billion in fraudulent purchases each year, the Secret Service said. The number of skimming cases has risen by 10 percent each year since 2008, according to the Secret Service. The agency doesn’t keep South Florida statistics.

More than 3 million people have been victims of skimming at ATMs, losing an average of $1,000 per person, according to the ADT Security Services website. The company manufactures anti-skimming devices.

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Visa is investigating a potential security breach that may have compromised payment cards of Eastern Europeans.

Although Visa hasn’t disclosed which countries were hit, the Romanian state-owned CEC Bank has blocked and reissued 17,000 cards on suspicion that they had been compromised.

CEC Bank said in a statement that “a number” of cards issued by banks both in Romania and abroad might have been compromised via an international database.

Here’s an excerpt from the statement, translated into English from Romanian by v3.co.uk:

The bank has been informed that a number of cards issued by banks in Romania and abroad have been potentially compromised through an international database. CEC Bank has decided to block the cards and reissue a new card and PIN, at no cost, for a number of cards in its portfolio

This attack did not target CEC Bank’s cards alone and was not due to any bank vulnerability. Our clients’ money is safe.

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Credit-rating giant Equifax will revise the letters it sends to consumers who dispute the accuracy of their credit reports, under a class-action settlement approved by a federal judge.

The company must also provide the class, estimated to exceed 42,000 consumers in Pennsylvania, New Jersey and Virginia, with complimentary credit-monitoring services for 18 months, worth about $13 million, court records show.

Three suits filed between 2007 and 2010 accused the company of misrepresenting the methods it uses to confirm the accuracy of credit-report items disputed by consumers.

The suits, which included two class actions, were filed in Pennsylvania, New Jersey and Virginia, and were consolidated in Pennsylvania’s Eastern District in October 2010.

The New Jersey class action claimed Equifax violated the Fair Credit Reporting Act by sending letters that falsely told consumers that it confirms the veracity of disputed public-record information by contacting the source – a county court, in this instance – directly.

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All merchants who accept credit cards are now subject to strict Payment Card Industry standards, rules, and regulations, which require a level of security that took about five years to finally implement.

PCI exists to increase credit card security and, among other goals, to stave off government intervention. While significant effort has been made to improve the security of credit card data processing, adequate attention has yet to be given to the identification, authentication, and accountability of cardholders.

For consumers, the primary concern is account takeover. Account takeover occurs when your existing bank or credit card accounts are infiltrated and your money is siphoned out. A hacked account or stolen credit card is often to blame.
InformationWeek reports that according to a new Ponemon Institute survey, “50% of security professionals view PCI as a burden, and 59% don’t think it helps them improve security. Furthermore, comparing this study with the inaugural one conducted in 2009, the number of respondents who said they had sufficient resources to comply with PCI dropped from 40% to 38%. Ponemon also found that the number of organizations that had experienced a data breach in the past two years increased from 79% in 2009 to 85% in 2011.”

Retailers who invest in device fingerprinting and device reputation make it much easier to identify bad guys during purchases, making those stolen credit card numbers way less valuable to thieves. By instantly evaluating a device’s history for criminal activity and assessing risk on new devices within a fraction of a second, retailers can stop fraudulent transactions before the order is accepted and product shipped.

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How many times have you called customer support only to have that call answered by a customer support representative in a country other than the United States? You may not know how often this happens, but could this allow the federal government greater access to spy on you? What if the reason you called the customer support center was to discuss some charge or payment on your credit card? A federal class action lawsuit has been filed that claims the federal government engages in warrantless snooping to gets its hands on and seize all such intercepted electronic data when customers call outsourced American Express call centers.

PogoWasRight posted the news of a lawsuit that claims, “American Express routes customers’ calls to foreign call centers without their permission or knowledge, subjecting them to intrusive, warrantless snooping by the U.S. government.” Yet Dissent looks deeper at the issue, asking what I was also wondering, “Is our government scooping up all of our data as it is transferred to outsourced call centers?”

Pickman v. American Express Travel Services [PDF] goes through a long list of American Express terms and services like membership rewards, points, ID Protect, Baggage Protection, Trip Delay, Airflight Insurance, passport assistance, drivers’ license service, the ability to cancel the card if lost or stolen, etc. By page 10, the complaint states that in order to provide all these various consumer services, American Express collects and stores “Cardmember’s spending, consumption and financial records.” Consumers have a “reasonable expectable” that these records will be “safeguarded against disclosure” to the U.S. government.

Customer service call centers are no longer based solely in the U.S. even if the U.S.-based toll-free number was called. In order for a customer service representative to provide assistance to a cardholder, “spending, consumption, and financial records” are made available to the customer service representative answering the call in a foreign-based call center. The complaint further discusses the reasons for U.S. call centers being closed in favor of these foreign-based call centers, basically saying it’s all about profit and overseas call centers are cheaper to maintain.

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Forget bulk cash. Heavy and hard to hide, it’s simply not the most convenient cross-border conveyance for a 21st-century money launderer.

A safer and increasingly attractive alternative for today’s criminal is electronic cash loaded on what are called stored-value or prepaid cards. Getting them doesn’t require a bank account, and many types can be used anonymously.

U.S. crimefighters consider the cards a burgeoning threat that regulators haven’t adequately addressed.

In the past year, said John Tobon, a senior U.S. Immigration and Customs Enforcement agent, the cards have become the preferred means of paying couriers who transport illicit drugs across the U.S.

No one knows how big a role the cards play in moving the more than $20 billion in drug earnings that U.S. authorities estimate crosses from the U.S. to Mexico annually. Yet while anyone crossing that border with $10,000 or more in cash must declare it, prepaid cards are legally exempt.

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Skimming equipment costs about $1,000, but it’s a small investment for an identity thief who could make thousands more in just minutes by stealing from you.

Tami Nealy with the identity theft protection company LifeLock warns how we all engage in risky business whenever we use our debit our credit cards.

“This is called a credit card skimmer, so it skims the information on a magnetic stripe. This is called a card reader and a card writer,” she said.

We also become vulnerable anytime our credit or debit cards leaves our hands and goes to a waiter in a restaurant.

“We have become very trusting in our society,” Nealy said. “We put the credit card in that super secure leather billfold, and we hand it off – thinking that they’re only going to run it through the machine once to pay our meal.”

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A federal court in Newark, N.J., last week convicted a Bulgarian man for his role in a cross-border, $278,144 ATM fraud scheme that led to the compromise of nearly 350 bank accounts.

Viktor Kafalov, 28, pleaded guilty to charges of conspiracy to commit bank fraud and aggravated identity theft. He could be slapped with fines totaling $1 million and up to 30 years in prison.

The case goes back to September 2008, when Kafalov and co-conspirators used fake or “white” ATM cards they had created from skimmed magnetic-stripe details they collected at ATMs in the U.S. and Canada. With cameras mounted at compromised ATMs, the gang also recorded PIN details, to associate with the skimmed numbers, as consumers attempted to use the ATMs. From there, funds were withdrawn from ATMs that hit New York accounts in Brooklyn, Queens, Manhattan and Long Island.

ATM Skimming: Still No.1
Though incidents of card fraud vary, and some techniques have increased in sophistication, tried-and-true ATM skimming remains one of the payment card industry’s greatest threats.

POS swap attacks that target retailers and the installation of skimming devices on pay-at-the-pump gas terminals, which often remotely transmit card details once they’re skimmed, have garnered attention in recent months. But those attacks come nowhere close to rivaling the number of ATM skimming incidents the industry continues to battle globally.

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Friendly fraud occurs when a customer makes an online purchase with a credit card and then, once the merchandise has arrived, calls the credit card company, claims never to have received the item, and requests a chargeback. The merchant has no way of proving the legitimacy of this card-not-present transaction, and is forced to refund the customer’s money.

According to a study released by LexisNexis Risk Solutions, retailers lost more than $139 billion to fraud last year, with friendly fraud accounting for one fifth of those losses.

The problem for you, the consumer, is that banks and merchants tend not to believe identity theft victims, because friendly fraud complicates the reimbursement process. It’s not uncommon for victims to be required to sign affidavits and have them notarized.

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If you want to keep tabs on your credit report to catch errors, improve your score or keep an eye out for fraud, you might be tempted to sign up for a credit monitoring service.

A credit monitoring service tracks your credit report at one or more of the three major credit bureaus, and immediately sends you an alert if any change or suspicious activity occurs.

Personal finance experts are divided about whether these services are worth the cost, but many say signing up can help some consumers. But it’s important to be able to distinguish exactly what these services offer, how much they cost and what you can expect in return for your payment.

Here are some tips to help you navigate the pros and cons of credit monitoring services:

Credit monitoring 101
Basic credit monitoring services usually track your credit reports at one, two or all three of the major credit bureaus — Experian,Equifax and TransUnion — and send you an e-mail, text message or letter,depending on your preference, if there’s an inquiry or other activity. Many also offer unlimited access to your credit report from at least one of the bureaus, tracking of your credit score, telephone help with fraud resolutionand even reimbursement of some out-of-pocket expenses incurred while trying toresolve identity theft or other fraud.

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Authorities are investigating an elaborate counterfeiting operation involving stolen mail from throughout Marin County, credit card numbers of more than 200 people, counterfeit cash, fake checks, printers and laptop computers.

The operation came to light Aug. 27, when Novato police Officer Blake Dunbar checked up on a parolee whose name he recognized on a log as one of the guests at the Days Inn motel on Redwood Boulevard.

“I checked the registry for the hotel just to see who was there,” Dunbar said. “We do that from time to time.”

Patrick Fahy, a detective with the Northern California Computer Crimes Task Force in Napa, said Dunbar dropped in at an opportune moment.

“They were right in the middle of making fraudulent checks, counterfeit money, credit cards and drivers’ licenses,” Fahy said. “That officer being very proactive in his job has probably saved hundreds of victims their identity theft, and I don’t know how many thousands of dollars.”

Charges have been filed against three Marin County men in connection with suspected identity theft and counterfeiting, said Barry Borden, Marin’s chief deputy district attorney.

The computer crimes task force, a five-county agency with investigators from throughout the region and managed by Marin District Attorney Ed Berberian, has taken over the investigation. The stolen mail came from Mill Valley, San Rafael and Novato.

“Most of those mailboxes were in rural areas with high-dollar property values,” Fahy said.

He said the identities of several of the Marin mail theft victims were used to make fake checks that were cashed in Sonoma County. After the August arrests, police confiscated two more computers that were in the possession of one of the suspects. One of them is suspected to have been stolen from Loma Verde Elementary School during a 2009 break-in, Fahy said.

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