A credit card fraud phenomenon sweeping the nation has caused concern for Lake Havasu City Police Department’s white-collar crimes experts.
“We have recently noticed a rise in fraud cases involving businesses that utilize the Internet process for processing credit cards used at their establishment,” said Sgt. Joe Harrold, the department’s spokesman. “Investigations of credit card fraud cases have detected this process is susceptible to security threats.”
Credit or debit card fraud is not usually discovered until the victim or a bank security program notices strange account activity. The card numbers obtained in Lake Havasu City are often used in other jurisdictions, Harrold explained.
For these types of fraud cases, the local police department takes an original report from the victim and conducts local follow-up investigations, he said. There are times that cases are turned over to the jurisdiction where the stolen card was used.
What we are seeing is some new type of activity,” said Lake Havasu City Police Det. Scott Cheshire. When merchants use virtual credit card systems to batch charges at the end of a business day, the account information is being breached in cyberspace between the merchants and the bank.
“The difficulty is in tracking these bad guys. They can be anywhere in the world and be hacking at any time,” he said. “It’s scary. This is scary stuff right now. It is like anything else, we are learning about these trends as they are reported.”
Cheshire compared the magnitude of the problem to the handheld skimmer.
With handheld skimmers, the credit card numbers are taken one at a time. With this new system of fraud, many account numbers are jeopardized at once. Furthermore, the electronic account numbers are not limited to a specific type of purchase.
“It could be anything (a person uses their debit/credit card to purchase),” Cheshire said, adding the fraud strikes all age groups because the hackers don’t know the victims’ ages.
Once the account numbers are obtained, they are sold, traded, used by a number of thieves, Cheshire said. They are shared by phone, mail or chat rooms.
The trend was on the rise in 2009.
In response to the increase in credit and debit card fraud reports last year, detectives have taken steps to inform the community.
“(Detectives) have met with local banks and encourage local merchants to have a computer technician to look for vulnerability (within their computer systems) and make sure someone hasn’t hacked or put in a back door,” Cheshire said.
Police also suggest that merchants using virtual terminals should have a computer technician or software support to check computers as frequently as possible, he said.
Chase Bank spokeswoman Mary Jane Rogers said the financial institution has a system to help prevent such breaches.
“Chase Bank in particular has a very proactive fraud management effort based in Tempe,” she said. “The system identifies suspicious spending patterns and prompts the bank to contact the customer.”
Rogers said the strategy is a partnership between cardholders and credit card companies.
“The banks want to make sure their customers are safe. The best way to do that is to partner with their customers,” she said.
She said ways residents can protect themselves include reading their bank statements, using secure connections for online banking and using anti-virus or anti-theft programs on home computers.
If someone becomes a victim, Rogers suggested he or she contact the bank first. If card is lost or stolen, call the bank file report. She also said many banks have this type of information available on their websites.
In April this year, Havasu resident Brenda McCullough became a victim of debit card fraud.
“I went online to check a balance and I noticed charges in California,” McCullough said. The bank caught the $384 in charges at three out-of-the-ordinary locations and cancelled McCullough’s card.
Coincidentally, McCullough was hit again the next day for $425 dollars on a separate account at another local bank. The charges were also in California.
“What is odd is that it was two different banks,” she said. “In the beginning, I was freaking out that I didn’t know how much money would be involved. It has kind of made me leery about doing any online banking.”
Misty and Robert Pantni, also of Havasu, became fraud victims.
“My husband went to use the debit card and (the bank) had frozen the account due to transactions back East,” Misty said. “The bank said the card had been compromised.”
In the Pantni’s case, the charges are part of an ongoing skimmer investigation.
In all, the couple lost $180.23.
“For that little amount it has been horrendous. I haven’t been able to use my account since April,” she said. “We are terrified to spend money anywhere unless it is cash. Had (the criminals) asked for the money, we would have given it to them. That is the kind of people my husband and I are. I don’t want to say it has jaded us, but it makes me angry that is has made me cautious.”
Credit card fraud may be on the rise, but the crime is no stranger to Havasuvians.
Bess Webb, of Havasu, became a victim of credit card fraud seven years ago in Havasu after her credit card information was stolen from her mailbox.
“The credit card (company) left message about unusual activity. And I never received the card,” Webb said.
A short time later, credit card checks were stolen again from her mailbox. In all, she was fraudulently charged $900.
Police ultimately arrested Webb’s former neighbor for the crime. The neighbor was jailed and then released on probation. Webb said the criminal violated her probation terms and is currently serving a 10-year sentence with the Arizona Department of Corrections.
“I had quite a time getting it cleaned up,” Webb said. “I felt very violated. Anything that I get in the mail, with my name on it I shred them, take my name off. I don’t take any chances.”
By Jayne Hanson
