Getting Pinned

Credit card

(Photo credit: Wikipedia)

A friend had her pocket picked last night. Yes, I’m being literal – they got her wallet and immediately ran to a couple of stores to buy electronics which are easily turned into cash on the street. Fortunately she noticed her wallet missing not long afterwards and so was able to block the credit cards relatively soon.  Still, thousands of dollars of goods were charged – they were few in number but big in price.

As someone who used to supervise a fairly large online sports store, I’m well aware that it’s usually the merchant who bears the brunt of these fraudulent purchases.  Most of the time, the onus is on the retail outlet to verify that the card is being used by the rightful owner or the outlet will eat the cost of the goods refunded to the consumer.  Because of that, there are a lot of electronic countermeasures taken during online checkout to be sure that the card is real by both merchants and card issuers. You may even have experienced some of them while traveling, especially if you’ve gone out of the country (banks don’t like it when the card is suddenly being used overseas!).

What strikes me as odd, however, is that it’s far easier to commit fraud in the real world than it is online.  Think about your last experience charging something with a credit card.  The cashier may not have even looked at the card to see if the sex of the user matches the name on the card.  They might not have verified the signature.  Neither of those, by the way, is much of a deterrent.  Maybe you swiped the card at a gas pump which then asked for your zip code.  As in my friend’s case, if they have the entire wallet, there is probably something in there identifying the correct zip so that doesn’t work either.

Contrast that with a bank debit card.  You must have a PIN to use the card.  Forget the pin and there is no way to get cash or make a purchase.  Does anyone think it’s odd that when the bank is on the line (as with a debit card) for the money there is a fairly secure (ok, very secure except for the idiots who write the PIN on the card) check but it’s not there when someone else is liable?

It seems like a pretty simple fix and it can save billions.  Like many things in business, you shake your head and wonder why no one is taking the time to do it.  You agree?

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Filed under Helpful Hints, Huh?, Thinking Aloud

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