Dealing with Internet Credit Card Fraud?

Where's My CreditCard asks: "Recently There has been a large increase in the amount of press relating to identity theft and the related crimes. I have recently been subject to several fraudulent transactions on my credit card and debit card through the internet. It has been over a month and my bank is still stringing me along saying it will take up to 10 weeks to get my money back. What have other on Slashdot done in this type of situation. What is the best way to keep things moving forward?"

Re:Why use debit on the internet?

[Old Uncle Bill]

Who do you bank with? My bank provides instant rollbacks on unauthorized transactions on my debit card, just as the credit card companies. I get all the benefits, they take all the risk. And yes, I have had to test this. Some clown in Texas used my debit card to charge $400 in DSL fees. Called the bank and had the money back in my account in 15 minutes.

Virtual Credit Card Numbers

[bofh31337]

Several Credit Card companies, including CitiCard, will allow you to generate a one time use only virtual credit card number. CitiCard's is especially nice, because you can set a limit to how much can be charged to that number.

In the case of unauthorized use of your card, you should report the fraud to one of the major credit bureaus:

TransUnion: 800-888-4213
Equifax: 800-525-6285
Experian: 800-397-3742

While you're at it check out http://www.ftc.gov/ [ftc.gov] for more information about your rights in resolving credit card problems.

Is there some sort of Ombudsman you can use?

[the_xaqster]

In the uk, you can threaten them with going to the ombudsman if you think that things are taking too long. http://www.adviceguide.org.uk/n6m/index/your_right s/civil_rights/how_to_use_an_ombudsman/index/your_ rights/civil_rights/how_to_use_an_ombudsman.htm [adviceguide.org.uk] Shows you how they are used in the UK. Looks like an ombudsman is a lawyer, so if you cannot find one, maybe a Lawyer will do.

Re:Why use debit on the internet?

[ebrandsberg]

Uh... Maybe because not everybody HAS credit cards. If you have ever had issues with credit as a result of say... a tech stock downturn, or divorce, you would realize that credit cards are not given to everybody instantly. Many of use are forced to use debit cards. Just like many people will want to use CASH (you know that old paper stuff) for their transactions, don't assume everybody uses credit cards or even checks.

Need clarification

[Michael Spencer Jr.]

(I work for a major credit card processor, First National Merchant Solutions. We represent businesses on the other side of these kinds of disputes -- we process cards for merchants, and we must *answer* chargebacks like this one.)

I'm a little confused by whether this is a Visa/Mastercard issue or a debit network issue. Debit networks (Interlink, Maestro, AFFN, Shazam, Cash Station, Tyme, Star, Mac, NYCE, Pulse, Accel, Honor, etc.) require both the card and the pin number be present at the point of sale, so if these were Internet merchants then these are not debit sales.

(If someone else has more information about debit cards, please reply. We are trained to believe that these debit networks are only available card-present with pin. If that's wrong -- if people can take debit network account numbers over the Internet -- cards which are not also Visa/Mastercard/Discover/AMEX/JCB/International Diners/Novus etc. -- please let me know.)

So in the absence of more information, I would say because the transaction is over the Internet, and the original poster seemed to indicate it was also a debit card, it's probably been processed either as a Visa or a Mastercard.

If that's true, here's the flow of events:

1) Customer notices a fraudulent charge. They notify their bank, and their bank issues a chargeback with a reason code of something like M85 (Fraudulent Transaction - No Cardholder Authorization)
2) Along with the chargeback, the bank who issued the customer's card sends a debit to the merchant's processor (a company like us). So in accordance with the rules, the bank now has the customer's money back in their hands.
3) The bank provisionally credits those funds to the customer. This isn't risky (in case the customer was lying) because if regulations say the bank must pay the merchant back, the bank is responsible for collecting those funds from the customer. (So if the customer closes their account and flees to Mexico or something, the bank still has to pay.)
4) The merchant's processor (again, a company like us) usually then bills the merchant the amount of the chargeback, and notifies them that a chargeback has been filed against them. The merchant then has some time (30 days? 45 days?) to prepare their case, and submit documentation defending their charge.
5a) If the merchant doesn't respond, or the documentation they provide is obviously faulty ("But this gentleman from Nigeria sounded so honest!"), no response is sent. The time to respond to the chargeback case expires, and the bank (and customer) get to keep the money. STOP
5b) If the merchant does respond, with documentation which proves the charge really was authorized, the merchants processor (a company like us) sends the documentation back to the bank, along with a debit which takes money back from the bank and gives it back to the merchant.
6) The customer's bank now has documentation which explains both sides of the story. I don't know what really goes on here, but I assume the bank consults with the customer and tries to get more information from them. The bank is then given some time (30 days? 45 days?) to respond back.
7a) If the customer sees the documentation and says "oops, sorry, I guess I did authorize that one, never mind" then the bank just doesn't respond, and the chargeback drops. STOP
7b) If the bank talks to the customer and finds out the charge really *is* unauthorized, the bank debits money *again*, and things go back to the merchant for the last time.
8) The merchant's processor consults with the merchant, and they decide what they want to do. If the merchant wants to dispute the bank's second decision:
9a) If the charge is a Visa, that second chargeback is actually a "pre-arbitration notice", where the bank is stating that they're prepared to go to Visa for a (costly) independent arbitration. They're *sure* they're right. If the merchant (and their processor) are also *sure* they're right, and no agreement can be reached, the case goes to arbitrati

Re:Bank of America SUCKS

[Katrina48]

I agree with you - I have had experience with this bank and they are not very user-friendly. I have continued my relationship with them but I constantly monitor my accounts online and when there are issues, I contact customer service immediately, jump through all their hoops to get the problems resolved, etc. One particular issue to watch for is if you lose a BOA credit card or it's stolen and the account has to be closed and they set up a new account, they will charge you a balance transfer fee in the process of setting up the new account. I have never run into that with any other bank.