[IP] more on New Credit card scam. Watch out!
Delivered-To: dfarber+@xxxxxxxxxxxxxxxxxx
Date: Fri, 09 Jan 2004 18:54:06 -0500
From: Chris Hoofnagle <hoofnagle@xxxxxxxx>
Subject: Re: [IP] New Credit card scam. Watch out!
X-Sender: souvarine@xxxxxxxxxxxxxxxxxx
To: dave@xxxxxxxxxx
At 06:15 PM 1/9/2004, you wrote:
>>You say, "Yes." The caller continues..."I will be starting a fraud
investigation. If you have any questions, you should call the 800 number
listed on your card (1-800-VISA) and ask for Security. You will need to
refer to this Control #". Then he gives you a 6 digit number. "Do you need
me to read it again?" Caller then says he "needs to verify you are in
possession of your card. Turn the card over. There are 7 numbers; first 4
are 1234 (whatever), the next 3 are the security numbers that verify you
are in possession of the card. These are the numbers you use to make
Internet purchases to prove you have the card. Read me the 3 numbers." Then
he says "That is correct. I just needed to verify that the card has not
been lost or stolen, and that you still have your card. Do you have any
other questions? Don't hesitate to call back if you do."
>>
>>You actually say very little, and they never ask for or tell you the
card number. But after we were called on Wednesday, we called back within
20 minutes to ask a question. Are we glad we did! The REAL VISA security
dept. told us it was a scam and in the last 15 minutes a new purchase of
$497.99 WAS put on our card.
Dave,
This sounds like a problem created by the practice of "pre-acquired
account number" telemarketing. I could be wrong--but chances are,
the telemarketer has bought the victim's credit card number, probably
directly from the victim's bank. Once the telemarketer has your credit
card number, the telemarketer can engage in trickery to make it seem
as though you've consented to a purchase.
Preacquired account telemarketing is still allowed under the new
Telemarketing Sales Rule regulations, but there are additional
protections in place now. The question is why did the FTC even
allow preacquired account number telemarketing to continue at all? Why
should a bank be able to sell your credit card number to a telemarketer?
The telemarketers said that it was more efficient--that you wouldn't
have the burden of opening up your wallet when purchasing something
over the phone.
The biggest banks in America have been caught selling their customer's
credit card numbers to fraudulent telemarketers. The list includes Capital
One, Citibank, First U.S.A., Fleet, and U.S. Bancorp.
The Minnesota AG wrote this in a submission to the FTC on preacquired
account telemarketing:
http://www.ftc.gov/os/comments/dncpapercomments/supplement/minnag.pdf
Unauthorized billing is the dominant reason for membership cancellation.
The data we have reviewed in our investigations uniformly supports our
impression that
underlying the high cancellation rates with preacquired account
telemarketing is consumer
sentiment that the charges were unauthorized. In addition to the survey of
Fleet Mortgage
Corporation customer service representatives presented in the prior NAAG
Comments, an
investigation of a subsidiary of another of the nation's largest banks
revealed a similar pattern.
During a thirteen month period, this bank processed 173,543 cancellations
of membership clubs
and insurance policies sold by preacquired account sellers. Of this number
of cancellations,
95,573, or 55%, of the consumers stated "unauthorized bill" as the reason
for the request to
remove the charge. The other primary reason given for cancelling (by 56,794
customers, or 32%
of the total) was a general "request to cancel" code that may have also
included many consumers
claiming unauthorized charges.
Ah, the benefits of the free flow of your information...
Regards,
Chris
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Chris Hoofnagle, Assoc. Director +1.202.483.1140 (tel)
Electronic Privacy Information Center +1.202.483.1248 (fax)
1718 Connecticut Ave., NW Suite 200 hoofnagle@xxxxxxxx
Washington, DC 20009 USA
http://www.epic.org/ http://www.privacy.org/
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