Credit Cards Online Information

"The future, my boy, is in plastics." When Dustin Hoffman's neighbor uttered this line in The Graduate, little did he know how prescient the statement would be, at least as it applies to the credit card industry. Although, the character was not referring to credit cards back when the film was released in 1967, no one can deny that the credit card market has been booming during the past 30 years.

Industries that expand at such a rapid rate often are vulnerable to fraud schemes devised by those seeking to capitalize on newfound criminal opportunities, dated security measures, and outdated laws. The credit card sector is no exception.

Approximately 124 million of the 193 million adults in the United States owned at least one credit card in 1994.(1) Experts expect this gap to narrow over the next 6 years at a rate of about 2.8 million new cardholders per year, as credit card companies inundate prospective customers nationwide with more than 2.7 billion mailings and pitches.(2)

The New York Times noted that "...the sheer pace of this growth raises the question of whether credit card lending is following in the checkered tradition of loans to third world countries and speculative real estate developers."(3) Indeed, recent statistical data indicate that credit card fraud is growing in proportion to industry advancements.

Around the world, bank card fraud losses to Visa and MasterCard alone have increased from $110 million in 1980 to an estimated $1.63 billion in 1995.(4) The United States has suffered the bulk of these losses - approximately $875 million for 1995 alone. This is not surprising because 71 percent of all worldwide revolving credit cards in circulation were issued in this country.(5)

Law enforcement authorities continually confront new and complex schemes involving credit card frauds committed against financial institutions and bank card companies. Perpetrators run the gamut from individuals with easy access to credit card information - such as credit agency officials, airline baggage handlers, and mail carriers, both public and private - to organized groups, usually from similar ethnic backgrounds, involved in large-scale card theft, manipulation, and counterfeiting activities. Although current bank card fraud operations are numerous and varied, several schemes account for the majority of the industry's losses by taking advantage of dated technology, customer negligence, and laws peculiar to the industry.

CREDIT CARD FRAUD SCHEMES

Visa and MasterCard account for approximately 65 percent of all outstanding revolving credit, and most substantive fraud cases involve schemes centered on one or both of these bank cards.(6) Law enforcement authorities repeatedly encounter certain ethnic groups - particularly Asian and Nigerian - and organizations involved in multilevel bank card fraud operations.

Notably, nearly one-fifth of all U.S. credit card losses occur in California, an amount close to the combined total for the other five identified problem areas worldwide: Florida, Texas, New York, Asia, and Great Britain.(7) While losses to Visa, MasterCard, and the financial institutions issuing these cards continue to mount, several basic schemes have been identified as most prevalent throughout the nation.

Mail/Credit Bureau Theft

One of the simplest ways to obtain account information or actual bank cards is through postal theft. Numerous Nigerian fraud rings operate sophisticated theft operations throughout the eastern and southern regions of the United States. Having illegally obtained legitimate bank cards or account information, the group then creates portfolios of fictitious identification, including driver's licenses, social security cards, and other materials, to support the purchasing power behind those cards. At the direction of group leaders, "runners" purchase merchandise from a variety of sources until the legitimate owners report the cards as stolen or confiscated.

These organizations also take advantage of contacts within the various credit bureaus to obtain legitimate bank card account information for counterfeiting or telephone order purchasing. The groups commonly mail stolen cards and information via overnight courier to other factions located throughout the country. For this reason, the U.S. Postal Inspection Service has implemented the Express Mail Label Profiling Program to identify packages likely to contain contraband. The profile flags suspicious packages based on mail quantity, delivery frequency, destination, label and packaging material characteristics, etc. The profile was developed initially to identify packages containing drugs. Postal inspectors in the drug unit forward profiles to the credit card fraud unit if they believe that non-drug criminal activity is occurring.(8) Through this program, postal inspectors can trace the illicit mail to both its source and its destination, thus identifying members of the fraud rings.

# posted by Medical Information : 1:49 AM