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Author: joelcorley Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308670  
Subject: Re: Cap One CC Fraud Experience Date: 8/26/2013 5:23 PM
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It still amazes me that so little has changed with credit card security since the advent of Diner's Club in 1950.

If a thief has a valid name and number, he can use a card. Of course validating the name and number in real time didn't start until a couple of decades ago. Before that the most a merchant could do was validate the luhn checksum of the card's number - which was mainly used to detect transcription errors. (That was one of my first tasks as a programmer in the early '80s working for a small mail order company. That and working up a simple PC-based order-entry system.)

All despite legislation that basically makes the fraud the issuer's - or more often the merchant's - responsibility.

Of course we all bear the cost of this fraud in higher product costs. But the way things stand today, the credit card industry seems completely unmotivated to do anything more about actually preventing credit card fraud.

And just so my response will be on-topic, let me say that I've had similar experiences with Chase. I have two credit cards with Chase. BOTH have been compromised at a time when both had not been used recently. Chase contacted me within hours of the first fraudulent charge.

Personally I think it suspicious that the only cards I have had compromised recently were from Chase. And there were two cards from them. And all the fraudulent charges were in the New York area. I also have cards from Bank of America, Citibank and Discover as well. I have held them all for years and they have not been compromised. I'm not saying it's true, but it makes me wonder if Chase or a provider it uses was compromised but they chose not to tell their customers...

At least Chase was prompt to take care of the charges and replaced my cards quickly.

Still, I feel badly for the merchants that were likely scr*wed ... all so we can keep a system that seems broken to me. (It's broken because there is no real, secure authentication step required before a charge is authorized or processed.)

- Joel
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