Authorities Track Foreign Source Of CardsFraud

Register now

WASHINGTON - (03/09/06) – The U.S. Secret Service isworking closely with INTERPOL and authorities in as many as a dozenforeign countries to try and trace the source of an expanding webof debit card fraud. Numerous credit unions and banks, inconjunction with Visa and MasterCard, have begun blocking access totransactions performed in several high-risk locations where membersof an international ring have recently originated ATM cashwithdrawals and merchandise purchases on U.S. cardholders’accounts. Jim Blaine, president of State Employees CU in NorthCarolina, said his credit union has put a block on transactionscoming from entire countries, like Rumania, Russia or Spain, andselected transaction activity, like gas in Canada or restaurantbills over $100 in Mexico. The $13 billion credit union, which hasreplaced more than 20,000 Visa debit cards in the latest fraud, isworking with Fair Isaac & Co.’s Falcon Fraud Manager topinpoint patterns of fraudulent activity in order to block them.State Employees CU has reported fraudulent transactions coming fromas many as 12 countries, including Rumania, Russia, England, Spain,Mexico, Ukraine and South Africa. “We get one of thesebreaches every single day,” Blaine told The Credit UnionJournal. Local authorities in Hudson County, N.J., adjacent to NewYork City, said more than 100 people have been arrested in the U.S.over the past six months with loose ties to an international creditcard ring. Most of those arrested are young people who wererecruited to the fraud in chat rooms off the Internet. Authoritieshave confiscated hundreds of thousands of counterfeit cards inthose arrests on all the major brands, Visa, MasterCard, Discoverand American Express, and issued by hundreds of U.S. credit unionsand banks, including mega-banks Citibank, Wells Fargo, Bank ofAmerica and Washington Mutual. Many of the cards had no brand orfinancial institution logo, but just the magnetic strip thatidentified cardholder’s account information.

For reprint and licensing requests for this article, click here.