It depends on how sophisticated the identify theft is. I had a good friend who was taken for about $9000 in credit card fraud in 1998/1999, with Well Fargo. It took him the better part of six months, and endless correspondence with WF to prove all of the purchases were not his. There are lots of stories of people who were financially wiped out, to the point of bankruptcy, because of Credit Card/Identify fraud.
With that said - almost everyone seems to feel comfortable handing out their credit card to random taxi drivers, waiters, sales staff - with no idea whether a copy of their information is being taken down. Heck - if you give them the Credit Card, they even get your CCV as well.
That makes me wonder why the credit card system is so insecure in the first place. Why are credit card systems not secured with a password that the merchant never gets to see? Yet at the same time credit card suppliers keep bragging about how "secure" their cards are.
Funny that you mention that. After a few bouts with fraud (because as i mention I have my CC out to many services), I was wanting a way to track down the offending service.. I was thinking something along the lines of a vendor-specific set of numbers to be run through.
I even wrote a blog post about it. I probably don't know what I'm talking about, but these were my thoughts at the time:
Wishlist – A Method to Pre-Approve and Track Credit Card Transactions
The issue:
A business using a credit card doing business with a relatively small number of vendors wanting to first avoid credit card fraud (stolen numbers) and secondly wanting to easily track down the offending business.
The idea:
The business would like to approve particular vendors to use the credit card with number 0000-0000-0000-0000 with each individual business pre-approved to run the transaction with a 5th set of identifiable numbers, so something like 0000-0000-0000-0000-0001.
If the credit card is used to make a fraudulent transaction, then ideally, they would have had to have used the 5th set of identifying numbers. This 5th set of identifiable numbers would then allow for easy tracking of the offending vendor, which would allow the business to either re-think doing business with them, or to serve as a starting point discuss security issues with the vendor’s credit card transaction processes.
Summary:
Basically, I believe there may be a need for a new or value added credit card type service. This transaction type would require a 5th set of numbers which have been assigned to pre-approved vendors. This 5 number set (ie. 0000-0000-0000-0000-0002) credit card transaction would most likely prevent theft right off (because the vendor is pre-approved and should provide their own private key (ie. CCV) to put through the transaction). Secondly, if and when the credit card number is stolen and used to make a fraudulent purchase, then, at least with the 5th number set a vendor can be identified and security policy with them can be re-evaluated.
> Why are credit card systems not secured with a password that the merchant never gets to see?
My bank in Sweden requires MasterCard SecureCode for all online transactions on their debit cards. Stores that don't support it simply won't work with the card.
So, it's up to the bank how secure they want it to be. The technology is there.
I've had roughly the same experience: in the last 8 years, I've had suspicious activity on my CC about 5 times. Each time, the bank caught and trapped it before I noticed and issued me a new card quickly. I've only had to fill out paperwork for a disputed charge once, and it was a 2-page, 2 question, sign-and-mail-it-in deal.
My advice is different, though. I notice that I tend to get lucky in places where people can have very aggravating experiences. I'd say that if you've had problems before, then anticipate problems this time around too. If you haven't, then don't bother.
Wow, four times? You should probably be more careful about who you give your number to. Personally, I usually get a new card every 3-5 months. If someone ever sat on my card number, it's useless to them now. Never had any issues either.
@kansface It's not bad for your credit rating. A number is simply a representation of the account. The account doesn't change. It's not like getting a whole new item of credit issued. Just the means to access it.
Also, great idea. But a pain, because most of my bills - cell, internet, insurance(s), etc all go through my credit cards. Is a gigantic pain to change the numbers.
I can be in some cases. I got mugged and my card was used to pay for parking garages for 1.5 years until it expired even though it was canceled and blocked by the issuing bank. They said that for some transactions, the blocking mechanisms are so expensive its more economically sane to them to refund whatever was drawn.
I also do that, but it's because I'm scared of recurring subscriptions that I've forgotten about, especially those that decide to sneak into my pocket after I've deliberately canceled them.
He's not tearing down and setting back up the entire credit line, just the card number associated with it. It won't be reflected on any credit reports.
I live on the internet. Put my credit card out on many services. Over the last 5 to 8 years I've had my credit card numbers taken I believe 4 times.
Never had to dispute it once. These Credit Card companies and Banks have a stake in not allowing your account to be drained.
I think it would be a waste of time to go out and cancel our CC until hearing from Linode that yes, CC information was taken.