Card Theft: What's in a Number? 

40 Million Card numbers compromised - does it affect you??

Lots of banks these days offer what are called "debit cards" or "check cards". These cards are generally issued by MasterCard or Visa, and they look and operate like credit cards. 

There are, however, two big differences. The first is obvious, of course. The money for debit card purchases comes straight out of your checking account, so you don't owe money the way you do on credit cards. The other difference is not so obvious, and could be dangerous. 

The difference with fraud in dealing with debit cards is that the money stolen comes out of YOUR account, rather than an account owned by a bank or a credit card company. As a result, your bank may charge you overdraft charges if a criminal steals more money than you have. If you have outstanding checks, the bank may also return those checks and charge you another overdraft fee. In fact, if you have a lot of checks outstanding, your bank may charge you more in fees than was stolen by the criminals!

If your wallet or purse is stolen, and you have written down your PIN anywhere, you could be in for a wild ride. Generally, PIN transactions are irreversible. A thief with your card can make uncontested debit purchases (ever notice they do not ID you when you use debit?) and the bank assumes that you are responsible. Getting a PIN transaction reversed MAY be possible under some circumstances, but it will take a LONG time, and meanwhile- YOUR FUNDS ARE GONE. The advertisements stating that your check card is "protected"- DO NOT COVER PIN TRANSACTIONS!

Using a debit card to avoid finance fees may seem like a financially smart move, spending only "your own money". However, if you use a credit card, you get the fraud protection under Regulation "E", and if you pay it off before finance charges accrue, the net result is the same as far as expenses go. If your purse or wallet is stolen, it is the difference between security and stark terror.

Remember, if you must use a debit card, NEVER WRITE DOWN YOUR PIN!  Your entire wallet or purse can be stolen, and it is just too tempting for housekeepers, relatives, and visitors if they find it in your home.

If you have not heard that 40 Million credit card numbers were compromised, you must have been stranded on an desert island somewhere.  

Now the question is:  How does that affect ME?  It can affect you in two ways as a merchant.  First, YOUR personal card number can be used for fraud, or a stolen number can be used to try to purchase something FROM you.

As a cardholder, you should definitely go over your statements with a fine-toothed comb, and immediately call your card issuing bank if you see any unauthorized transactions.  Federal Regulation E protects you (see our newsletter on that here) from losses incurred from fraud.  SPECIAL NOTE TO DEBIT CARD HOLDERS: See this week's FraudWatch column to the far right.

As a MerchantAnywhere.com Merchant, you have AVS (Address Verification System) protection on all your keyed transactions!  Reports are that no personal information was stolen, so the thieves do not have the address information.  Simply reject any sale where Transaction Central tells you that the AVS address does not match, and you have a level of protection that merchants using old dial-up technology do not have!

If you are swiping your transactions, now would be a good time to start checking ID when you accept the card (like you are supposed to anyway).  The cost of making a passable credit card with hologram, and making a passable driver's license is very high, and not worth it for most thieves.  But, be more cautious for cards that will not swipe correctly, and verify the hologram on the card (the hardest part to duplicate).  Look at your own cards as an example of these.

These few steps will help prevent you from being a victim on either side of the aisle, leaving the fraudsters to focus on merchants who key their transactions into old style dial up machines without Address Verification, or swipers that do not display the cardholder name from the magnetic track for you to verify against the cardholder's ID.  This is a unique feature of our PC Verifier and Pocket Verifier software systems.  It almost makes you think we knew this was coming.....

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John Borchelt of MACarbon writes: "We have been using MerchantAnywhere for our credit card processing for the last year after starting out taking PayPal.  We use the Pocket Merchant with a Sprint TREO 300 at tradeshows. This arrangement was our original reason for signing up.  We also use the internet terminal [Transaction Central] to do our daily phone sales.  It has been great working with you to service our customers."  As an added bonus, through the end of July, anyone who orders a Porsche 996 or Boxster interior will get 10% off by mentioning MerchantAnywhere.

If you are looking for something unique, take a look at MACarbon.com online!  They have a gallery of high-end cars outfitted with carbon interiors, engine compartments, and body parts!

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