Technology is making it easier than ever to pay our bills. You can even use your smartphone or a digital wallet. Purchases are so instant, you don’t even need to sign for a purchase if it’s under $25 to $50.
While consumers don’t usually pay the price for fraudulent charges or identity theft, it’s a headache to unravel the mess and change all your accounts. According to some card companies, the merchants should be verifying your card’s signature matches the signed receipt. Our hidden camera investigation found that’s not happening.
“To have it so easily ambushed and destroyed, just can’t be allowed. There is just too much tied to credit to have it be allowed,” said victim Gretchen Dworznick.
Her identity was stolen and her credit used to open fraudulent credit card accounts.
“To have somebody physically looking at that signature and checking it’s there is important,” Deborah Rutledge said.
Credit card fraud is robbing Northeast Ohio. Thieves have gone on a nationwide shopping spree.
The Five on Your Side investigators tracked almost $200,000 in fraudulent charges.
“There was a Sam’s Club credit card approaching $4,000,” Dworznick said.
She estimates the charges were more than $10,000. Alert retailers and credit card companies are key in stopping the fraud.
"She's like 'Are you in Missouri right now at a Kohl's buying clothes?' I'm like 'No, I'm on a highway in Ohio,'" Dworznick said.
When you swipe a credit card, you’re asked credit or debit. How often has a cashier asked to verify you are the cardholder and not a thief?
“In the last five years, I’m not sure it’s happened,” Miatta Kaba said.
Visa tells merchants to compare the signature on the card to the signed receipt, but our hidden camera test found that’s not happening. American Express also asks for that comparison of signatures with the exception of quick service restaurants that don’t require a signed receipt for transactions under $50.
Armed with a Visa card, our photographer went to a variety of stores and a fast food chain. Of the eight businesses he visited, only the post office compared his signature.
"If the signature doesn't match, the clerk has the option of refusing the transaction,” said David Van Allen, United States Postal Service communications programs specialist.
Credit card not valid if it’s not signed
With so few businesses verifying your signature, some consumers are taking action.
"I don't sign my cards,” said Kaba.
Others write "See ID” or “Ask for ID.”
"I want to be asked for identification. I want to be ID’d as an authorized user of my card," Kaba said.
Consumers "think" this is a safeguard, but it isn't.
“I can write down your driver's license number, date of birth, and now I also have your credit card number and now maybe I can use that and steal your ID at some point," said Mark Wiseman, director of Cleveland’s Neighborhood Housing Services Consumer Law Center.
Wiseman is a former consumer attorney with the Attorney General’s Office. He said without a signature, you’re violating most cardholder agreements. Read MasterCard's warning to consumers.
"The merchants are not allowed to take the card if there is not a signature on it. A lot of merchants just run it anyway. They don't know the rules," Wiseman said.
Post office clerks know the rules and post them clearly for all customers to see.
"If they do not have them signed, the clerk will ask for an ID, a picture ID, and then ask you to sign it on the spot,” Van Allen said.
Under some cardholder agreements, a picture ID can only be required if the card is not signed. If the card is signed, you don’t have to show your ID unless it’s for shipping, alcohol or tobacco purchases. If you’re asked, you can tell the cashier you don’t want to show it. Read your cardholder’s policy for specific details to your card.
Until there are more safeguards in place, victims who have had their ID and credit compromised will always wonder if the shopping spree in their name will ever stop.
"I don't know if I’ll ever feel totally secure," Dworznick said.
Some merchants help victims. Walmart said identity theft victims can request copies of application and business records related to a fraudulent transaction. It’s a service provided free of charge by filling out an affidavit .
Are PIN type credit cards coming?
There is a push to make credit cards more secure with what’s called “Chip and PIN” technology. You would enter a PIN or personal identification number to use the card.
MasterCard and Visa say these new technologies go beyond security and fraud prevention.
In a statement Visa said, “In August 2011, Visa was the first payment network to announce a plan to accelerate chip migration in the U.S. We designed our roadmap with a focus not only on reducing overall fraud in the payment system, but
also on supporting emerging payment innovations such as mobile and enhancing global acceptance.”
In a statement MasterCard said these new types of credit cards are “not about a specific device or cardholder verification method nor simply a technical migration for enhanced fraud migration; it’s about an upgrade to an overall platform to maximize the consumer purchasing experience and benefits."
Banks are slowly rolling out these new cards to U.S. customers, but they’re not useful if the new technology is not available at the retail level.
Retailers are worried about the costs involved with the changeover, and the Merchant Advisory Group said small businesses are most concerned. Big companies have already invested in the technology because they have locations across the globe. ‘
Despite the concerns, some in the credit card industry expect these changes by 2015.
The Merchant Advisory Group knows it’s coming and admits that merchants report 300-1000 times more fraud on existing mag-stripe cards with a signature than a card that has a PIN.
The issue is who is going to pay for this technology.
Protecting your identity
One of the best ways to protect your ID is to shred all your documents.