Press Centre

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The Fraud Squad

The Napa Valley Register
April 25th 2006

I used to think I was too smart to get taken online, until two weeks ago. That's when I found bogus charges on my credit-card bill, all of which originated online.

Recently, I've been shopping a lot online, as I've been on an upgrade frenzy.

Spending a little hard-earned cash is fine, as long as you can afford it and put the technology to work.

What's not fine is discovering your credit-card account riddled by bogus charges.

I immediately contacted my credit-card provider and notified them of the fraudulent charges. My provider tentatively accepted my version of events, credited back the amounts of the various charges and issued a new number to my account. I cut up the tainted card.

Soon, I had a fraud affidavit form in the mail, which I signed post-haste and returned it to the company. I was grateful for the sensitive and immediate way the situation was handled.

If I can take any solace from this frankly scary experience, it's that the technology that opened me up to fraud helped me fight back but quick. Since I pay almost all my bills online, I have instant access to my credit card accounts. It was while perusing recent charges on my most active account that I discovered the fraudulent charges the very day they were posted. Monitoring the account even after the number had been changed, I discovered another bogus charge that had occurred before we changed numbers but wasn't posted till later. I got that charge reversed, too.

If I'd had to wait a month or more before checking my paper bill, I might have either failed to notice the charges and paid the bill absent-mindedly or been so late in informing the bank that the chances of catching the pilferers would be seriously diminished.

I highly recommend everyone go to paperless billing and monitor online credit card activity often. And, by the way, this also helps guard against brick-and-mortar, in-store credit-card fraud. According to the Merchant Risk Council, the industry's top association dedicated to preventing online fraud, card-present fraudulent rates are now on a virtual par with online credit fraud rates, a significant improvement over previous years when online rates were as much as five times higher.

Much more needs to be done to reduce fraud, and I now have a personal stake in seeing it done.

The MRC makes recommendations to online retailers. Among its suggestions are address verification systems, customer follow-up, use of card verification codes and post-process fraud management.

After finding loads of information for merchants who wish to reduce fraud, I searched the Web for advice for consumers. American Express had window-dressing advice while urging members to add a for-fee protection service called CreditSecure. Other card services had a similar dearth of advice, and each had a for-fee service.

I was much more impressed when I visited Citibank's credit card site. While in the members-only area, I found clear information about free services Citibank cardholders could access, including Virtual Account Numbers. Without an extra charge, cardholders can generate random credit card numbers for each credit-card transaction, making it virtually impossible for someone to steal one's account number.

This service is very appealing, and I'll be looking into it soon.

Another way to insure safe online transactions is to take seriously the reputation of the online dealer. Many shopping services, such as eBay, Yahoo!, Froogle and Cnet.com, have rating systems that can demonstrate a merchant's acquired reputation for service, speed and fairness. I've gone with unrated services or auctioneers one or twice and gotten clipped. I won't do that again.

Finally, using special online payment services such as PayPal can make your credit transactions more secure. PayPal, which grew out of the need for eBay sellers to have a quick and easy way to handle online sales, was in fact eventually bought by eBay. Many online merchants, whether on eBay or not, give you a chance to pay via PayPal. I'd take them up on it and enjoy extra security and free dispute resolution.

Good luck online, and let's be careful out there.

http://www.napavalleyregister.com/articles/2006/04/25/
business/local/iq_3403453.txt.

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