After 19 years, it finally happened. My main credit card, the one I use for most purchases, was compromised.
I bought my wife’s Valentine’s Day gift from a local merchant using the card. The merchant didn’t run the card immediately — which was OK because the fraud might have been missed for a longer period of time — but when she did, the card had a hold on it.
One of the benefits of living in a town where everybody knows everybody is that she immediately called me, not only to alert me that something weird was going on, but also to find out how else I was going to pay.
I immediately called the Secretary of Health and Human Services at our house, and within 10 minutes, the card was cancelled and a new card with a new number was in the mail to us.
The Secretary learned that the hold had been put on after the thief had used the card to make a long-distance call in Iowa. The call was for under $5, and how they caught it remains a mystery to me.
Regardless, we have been thinking about where the thief got the number from.
The most likely suspect is a Twin Cities restaurant that we ate at on the first night of the state newspaper convention at the end of January.
We are conservative in our banking habits, and I usually pay cash when we go out for dinner. That night, however, I used the card. I remember that we had a female waitress who picked up the card, but that a male waiter brought it back. If you asked me to describe them, however, I couldn’t. It seemed like different restaurant employees were stopping by our table throughout our meal.
Credit card fraud and identity theft remains a growing problem. The latest tactic for thievery involves the use of smart phones. The person standing behind you in line at the checkout may appear to be talking to a friend on the phone when he or she is actually taking photos of your credit card, front and back.
If that continues, someday soon retailers will be installing curtains at each register to keep transactions private.
Another problem with cell phones works the other way. A report released Wednesday by Javelin Strategy & Research found that 7 percent of all smartphone users were victims of identity theft in 2011, about a third more likely than non-users of smart- phones. The reason is that 62 percent of smartphone users fail to use password protection for their home screens. That gives anyone who finds or steals a smartphone access to all the information on the phone.
I guess I’m lucky that way. I have a not-so-smart cell phone operated by a not-so-smart user.
The Javelin study also found that nearly 12 million Americans were victims of identity theft in 2011, a 13 percent increase over 2010.
Part of that was attributable to what is known in the credit card industry as a “data breach.” A data breach is when someone hacks into a long list of customer credit card numbers held by an individual company. The Javelin study found that the number of people whose information was accessed in this way increased by 67 percent in 2011. The chances of becoming a victim of identity fraud increase 9.5 times for those people whose information is taken in a data breach.
How big is the problem? A 2006 study found that 7 cents of every $100 spent using a credit card was spent fraudulently by a thief. That may not sound like much until one realizes that trillions of dollars change hands annually. Credit card fraud is now a billion dollar industry.
Under the law, credit card holders are limited to $50 in losses due to fraudulent use by someone else. However, nothing is free, and quicker detection holds down overall consumer costs for everyone. Our credit card company was on top it, and for that we are grateful.
At the same time, we are frustrated by this 21st century crime that so many have no scruples about committing.
Tom West is the editor and general manager of the Record. Reach him at (320) 632-2345 or e-mail [email protected]