Delivered-To: [EMAIL PROTECTED] Date: Fri, 09 Jan 2004 18:54:06 -0500 From: Chris Hoofnagle <[EMAIL PROTECTED]> Subject: Re: [IP] New Credit card scam. Watch out! X-Sender: [EMAIL PROTECTED] To: [EMAIL PROTECTED]
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
-------------------------------------------------------------------- Chris Hoofnagle, Assoc. Director +1.202.483.1140 (tel) Electronic Privacy Information Center +1.202.483.1248 (fax) 1718 Connecticut Ave., NW Suite 200 [EMAIL PROTECTED] Washington, DC 20009 USA http://www.epic.org/ http://www.privacy.org/ PGP Key: http://epic.org/epic/staff/hoofnagle/pgp.txt --------------------------------------------------------------------
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