Credit cards, gift cards and debit cards have become the dominant source of autonomous fraud in recent decades, rendering it almost impossible to evaluate motive of any customer who you do not know intimately.
Credit cards offer some level of protection, provided by the credit card issuer. However, the owner of the credit card is more exposed to loss than the retailer.
Gift cards pose a risk for both the recipient consumer and the issuer.
Debit cards pose risk primarily to the card holder.
Each has its own methodology to minimize risk of loss through theft and fraud, but none are foolproof.
As card security becomes more elaborate and sophisticated, the criminal mind becomes more adept at overcoming these barriers.
A few years ago, I was victimized by fraud, when I rented a vehicle, even though I took precautions.
When I offered my newly issued credit card to pay for the vehicle rental, the booking employee seemed to have difficulty with the terminal authorizing the transaction. That is not uncommon.
While I watched, the staffer tried several times, entering codes that appeared to be legitimate transaction items. Then, she indicated she had to call in to authorize the transaction.
I could have offered another card, but it seemed convenient to have her do it for me. However, I watched as she called and noted the number that she called. She referenced a list of numbers on her desk, rather than the number on the card, which would have required me to authenticate by voice.
I also had confirmation protocols set up for my cards, so that I would receive notification of any transactions.
Shortly after her multiple attempts, the card worked, and I received a purchase notification for the correct amount. But her difficulties seemed somewhat suspicious, so I wrote down the number she had called on my rental jacket, without her noticing.
Four days later, I received notification of a several hundred dollar purchase for a banquet hall rental in Montreal, along with a room rental shortly afterward. I had not been in, nor did I plan on travelling to Montreal in the near future. Within an hour, two more transactions for nearly $1,000 in food delivery took place.
I had immediately called my credit card company to flag the first two transactions, and they called me about the next two. The charges were immediately cancelled.
If I had not placed the notification protocols in place, I likely would have faced a lengthy battle to clear the purchases.
I notified both the credit card company and the local police of the activity. The credit card issuer was uninterested in the information, while the police filed a report. I do not know what actions they took.
The lessons were two-fold: never turn over a credit card to another person and let it out of your sight and be aware that there are more scams and fraudulent plans out there than any of us can completely keep abreast of.
This example illustrates, too, how vulnerable each of us is to fraud and loss.
This section will examine a multitude of ways that loss can occur and how to deal with it. It is an important section for both business and consumer.