Credit Card Fraud

[Fred]

I've discovered a few minor fraudulent transactions on credit cards over the years, usually when I go on a trip and rent a car from Budget rent-a-car but when I got my American Express bill on Saturday there were 40 fraudulent transactions, all of them at gas stations and all for either $100 or slightly less. I spent a half hour on the phone going over them all.

The Fraud protection agent on the phone told me it was probably the result of a card skimmer inserted at a gas station - some way of inserting something into a card reader to intercept the information from the mag stripe on your card. He said they have a way of producing a credit card with the same mag stripe and then they go to a gas station and swipe the card and then offer to fill people's gas tanks for $25 cash until they hit a $100 limit. They always ask for your zip code at gas stations for verification where I live, but all I had to do to was type in my name and the county where I live into google and this information was readily available. And the name is on the mag strip of your credit card.

I disputed all the transactions so hopefully it will be no skin off my back. The loss should be all on American Express and as I told the guy on the phone your fraud detection algorithms suck. Who goes back and forth between the same gas stations for a month buying almost exactly $100 worth of gas every time.

Most retail stores like Walmart are required to have readers for the new chip cards at the end of this month or the losses will be on them but I heard that gas stations have one more year to comply. So be on the lookout for fraudulent transactions at gas stations until then. Apparently the thieves are getting it where they can, while they still can.

But I'm sure the thieves are hard at work on the embedded chips.

[dualstow]

They probably are hard at work at defeating the chips, but they won't be able to simply copy them like they do with mag stripe cards.
The beauty of the chips is that unique key they create for each and every transaction.

By the way, there's a very recent thread at Bogleheads about how American Express stops too many geniune transactions. 
Though it looks like it's BofA or FIA and not Amex that is to blame. (It's the Fidelity Amex card).

[craigr]

Don't feel sorry for the credit card companies. They are well aware of the avenues of fraud but often weigh convenience over security. They consider it a cost of doing business and roll it into their interest rates.

Chip cards are common everywhere on the planet but in the U.S. There is a deliberate reason why it has taken the U.S. so long to switch. I'm sure it has to do with banks simply not wanting to do it for some financial/marketing reason.

[Fred]

They probably are hard at work at defeating the chips, but they won't be able to simply copy them like they do with mag stripe cards.
The beauty of the chips is that unique key they create for each and every transaction.

By the way, there's a very recent thread at Bogleheads about how American Express stops too many geniune transactions. 
Though it looks like it's BofA or FIA and not Amex that is to blame. (It's the Fidelity Amex card).

Yes, this was the Fidelity Amex card. I use it for everything to get the 2% cashback so I didn't notice when the balance started building up.

And interestingly what alerted me to the problem was when they started sporadically declining genuine transactions at places like the grocery store and the liquor store. As far as I know they never declined any of the fraudulent ones.

[dualstow]

Make sure they have your current telephone number so that they can reach you as soon as they need to.
If you text, you can sign up for text alerts, too.

Still, as someone said in the BH thread, it's not exactly convenient to have to call them when you're in line at the grocery store with people behind you. Easier to use another card.

[bedraggled]

Since several gasoline retailers offer discounts for cash, is it a better idea to just pay cash when filling up?

[MachineGhost]

By the way, there's a very recent thread at Bogleheads about how American Express stops too many geniune transactions. 
Though it looks like it's BofA or FIA and not Amex that is to blame. (It's the Fidelity Amex card).

American Express still continues to suck.  They denied my recent application for the FIA; but Citibank Double Rewards approved it.  Their loss.

[Fred]

American Express still continues to suck.  They denied my recent application for the FIA; but Citibank Double Rewards approved it.  Their loss.

If you do business like me maybe it isn't their loss. With $4k of fraudulent charges that they will have to eat I wonder how profitable my account has been for them. I pay the card off in full every cycle and have never paid them a penny in interest so all they make from me are the merchant charges. I'm not interested in doing the math but my guess is that with the fraudulent charges they are just breaking even at best.

[Reub]

I think that this whole subject is covered in the Old Testament.