Th*nk*ng (Fraud)

by Fred Cederholm

I’ve been thinking about fraud. Actually, I’ve been thinking about convenience, “the call,” plastic “money,” credit/debit cards, local banks/ businesses, and the 21st century. I learned in business school that fraud is a direct, misrepresentation of a material fact, knowingly done, upon which reliance is placed and a loss incurred. All of these parts must be present to get a conviction in a prosecution. It is, believe it or not, not an easy thing to accomplish, or to prove that is, if it does not involve the use of plastic “money.” This is my subject for the week.

You see we are now all the potential victims in the world of credit/ debit card fraud. I mean, how many credit/debit cards to you have in your purse or wallet — it only takes one. We are constantly marketed to accept another debit or credit card from our banks, our favorite stores, our gas stations, or an entity that is in the credit/ debit card business. I have only one platinum credit card issued by my phone company that I use for whatever I choose to charge. I charge gas, medications, buy stuff on-line, and occasionally order things on the phone which I have seen on an infomercial on the TV. I have NOT had a problem until last week. I, like most people, enjoy the convenience of just whipping out my card, swiping it through the reader, and entering my PIN number to consummate whatever the purchase.

Last Wednesday evening I got “the call.” Q: “To whom am I speaking?” A:

Fred Cederholm. Q: “What is the zip code for your mailing address?” A:

“Huh? Who is this?” They responded and asked: “where is your credit card right now? A: “In my billfold, why?” Q: “Have you recently been in Connecticut? A: “What??? Not since Thanksgiving time in 1983, why?”

Response: “Well on … your card was used to purchase $83.00 in gas at a station in Connecticut. We will reverse the charge, cancel your card and issue you a new one in 10 to 14 days.” I had somehow been hacked… and my card was being used fraudulently!

The next morning I topped off my car with gasoline and asked if the convenience station had had any problems? I learned that already by 9:30AM they had already had six customers whose card(s) would not work. I then proceeded to my bank to cash a check and learned that the day before almost 50 customers had reported that their cards were not being accepted anywhere. I learned that if the customer could not be contacted, their cards were being inactivated and new cards and numbers were being issued to them. This problem appeared to be growing… I had seen the Chairman of Schnucks Grocery Store group on TV apologizing to their customers for any inconveniences and the interruption of services in using cards at their stores for over a week now. They had been hacked and their whole data processing system was under review and re-programming. I heard that another grocery store chain in the area and “BIG box” store had been compromised as well. Credit/ debit card fraud had hit our area in a huge way.

On Friday I was at another local bank that I use to make a deposit and I learned that the branch manager had been working on a problem with debit cards all week long. She told me that this was the largest hacking/compromise that they had ever seen, and that literally thousands of local people in north central Illinois were now without working cards.

They were awaiting replacements. The costs of this nationwide surge in credit/ debt card fraud were going to run in the tens of millions! Bank charges to issue the replacement cards were going to cost millions. This was becoming far more than just a pain and an inconvenience. It would be costly.

I have had friends in Chicago who had problems with their plastic “money” cards and had to have their cards replaced, but the problems around here were virtually non-existent — that is until now… We have entered the world of global hacking and fraud in our little corner of Ogle county.

Unfortunately I fear that we will be seeing more of this in the future.

Credit/ debit card fraud is becoming an instrument of global economic terrorism. This problem will not go away and many of our current data processing systems are open to hacking. This is not only to criminal elements in this country, but worldwide. If you have a card that has been compromised and are now awaiting a replacement, you have my sympathy.

Welcome to the 21st Century… I’m Fred Cederholm and I’ve been thinking.

You should be thinking, too.

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