Credit card fraud - rewards for stopping fraud

A friend who worked on credit card security told me that a retailer's staff who spots and retains a stolen or fake credit card is given a reward of $50. If the credit card holder is detained, the reward is $200. However, this information was provided quite some years ago, so the rewards may now be higher.

A word of caution - detaining a suspected crook carries some risk. It the detention is not justified, a lawsuit for false imprisonment might well be started against the employee and his employer. A lawyer friend and his pregnant wife were once wrongly detained for shoplifting of a briefcase. Although he produced a receipt, this was not accepted. The retailer feared that he had bought one item, then went back to steal an identical item using the first receipt. He later settled his false imprisonment claim with the department store for $800.

2 Taiwanese jailed for credit card fraud

2 Taiwanese, Lin Ming-Hung and Huang Cheng-Yu, were jailed for 4 years each for counterfeit credit card offences involving more than $6,000. Although the amount involved is not large, the stiff sentence shows that the courts are determined to punish credit card fraud severely. They each pleaded guilty to 3 charges of having counterfeit cards, 2 charges of abetment to cheat and 11 other charges were taken into consideration.

The accused were part of a syndicate which trained them in fraud techniques such as which goods to purchase, and how to react if the retailer made a call to a bank to check the credit cards. It is understood that their detention was as a result of information provided by Card Security Group Singapore.

Womanly man jailed

A well-figured transvestite named Dexter Rayala Flores was just jailed for a year and 8 months for 5 charges of stealing handbags and wallets, and 15 charges of using a stolen credit card. All in all, the amount of assets were less than $15,000. Reports are unclear as to the value of any recoveries, if any, but it does not appear that any restitution was made.

It was revealed in court that the offender was going through the stages of a sex change procedure. An interesting question is whether the offender will be held in the male or female prison.

Credit card holders' response

The previous post referred to what we can do as consumers regarding loss credit cards and liability for all charges incurred on them.

Another step that might assist sometimes is to ask for full information regarding the use of the stolen cards. What we might want to find out is whether the retailers whose customers used the stolen cards have followed proper procedure. Some examples where this is not done -

a) the name on the card is obviously female but the only person using the card is a male;

b) the photo on the card (I believe Citibank and some other banks issued such cards) obviously does not match the spender;

c) the signature on the credit card slip is totally unlike that found on the back of the card;

An argument can be made that the retailer has been negligent, and perhaps should bear some of the loss. Consult your lawyer especially if the loss is major.

$17000 shock for credit card owner

Ms Tan Shock Ling had her credit cards stolen and ended up with a bill for $17,100. Her card was used by the thieves to buy luxury goods such as 3 Rolex watches.

Under the terms of agreement with the various card issuers, UOB, Royal Bank of Scotland, and Citibank, she was liable for all losses before she reported the loss of her card. This is a matter of contract law - she agreed to it and she now has to bear the losses.

What can we do as consumers? We should pay attention to the loss provisions of the credit card issuers. We should think carefully about taking the credit cards issued by banks with harsh loss provisions on overseas trips where the risks are higher. Even better, support those issuers who protection limits for loss cards and don't do business with those issuers who have no loss limits.

I understand that American Express has a low loss limit. If any reader knows of other issuers with loss limits, do let me know and I will share this knowledge on this blog.

Card issuers will of course claim that having a loss limit will in the long term lead to all customers sharing the losses of careless customers. To some extent, it is true but perhaps, the card issuers should learn from the insurance companies. All customers should have loss limits at the start but after the loss of the first card, then no loss limits are offered to them. Furthermore, all customers when applying for cards will be queried on their loss history. This would be fairer to all parties concerned.