For most consumers, the introduction of charge cards and electronic banking was a welcome innovation that freed them from the need to carry cash and wait in long bank lineups. But for a minority, the credit card revolution has opened new ways to commit crime. Most criminals simply use stolen cards to buy a succession of moderately priced goods from several stores before they abandon or destroy the cards. But now creative criminals in Vancouver have introduced a new element into charge card fraud—one that has caused panic among credit card companies that fear the trend may spread. Said Susan de Stein, manager of communications for the Toronto Dominion Bank: “We are a little bit sensitive about media coverage on this kind of thing.”
The new ruse involves tapping phones and buying jewelry with stolen credit cards. In one case last month a woman purchased $2,900 worth of jewelry from an east-end Vancouver merchant with a Toronto Dominion Visa card. Because Visa usually demands phone authorization on purchases of more than $75, the jeweller phoned the authorization centre in Toronto and was given a number and clearance to proceed with the sale. In fact, however, the jeweller had not been talking to anyone in Toronto, but to the purchaser’s partner who, with stolen B.C. Telephone equipment, had tapped into the store’s telephone line and intercepted the call to Toronto. The jeweller, who was suspicious because the interceptor had not asked the routine authorization questions, alerted credit card investigators the next day. He discovered that the credit card had been stolen and that he had been robbed. Since January credit card thieves using a similar system struck six Vancouver jewelry stores in three weeks, stealing $30,000 worth of goods. As a result, Visa may now have to reimburse the jewelry firms.
According to police and Visa investigators, it was the first time that that type of scheme has been used in either Canada or the United States. But even the most novel approaches to crime have a limited life expectancy. Said Staff Sgt. John McMillan of the Vancouver fraud squad: “If they do it enough, we catch them.”
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