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Thread: Credit card firms profit from Net fraud

  1. #1
    Senior Member cwk9's Avatar
    Join Date
    Feb 2002

    Credit card firms profit from Net fraud

    The source: http://www.theregister.co.uk/content/67/30849.html

    Think credit card companies have an incentive to crack down on credit fraud think again. If you ask me its time to replace credit cards with something a little more secure.

    Credit card firms 'profit from Net fraud'
    By John Leyden
    Posted: 23/05/2003 at 13:04 GMT

    A class action lawsuit against credit card firms alleging merchants are unfairly left to shoulder the burden of credit card fraud has begun in the US.

    The suit, filed by North Carolina-based law firm Triangle Law Center, in the US States District Court for the Eastern District of North Carolina, alleges all manner of misdeeds on the part of credit card companies. Visa, MasterCard International, American Express and Discover Financial Services are all named in the suit, which certainly doesn't pull its punches.

    The complaint charges that "Visa, MasterCard and their co-conspirators (i.e., their issuing and acquiring banks) violated Section 1962(c) and 1962(d) of the Racketeering Influence and Corrupt Organizations Act, Section 16 of the Clayton Act, Section 2(a) of the Robinson-Patman Act".

    Credit card firms and banks engaged in "unlawful business practice violations by conspiring to commit fraud and theft through means of wire and mail when processing merchants' Internet, telephone and mail order transactions," it is alleged.

    According to the suit, the "Defendants breached their contract, their implied covenant of good faith and fair dealing, duty of care and fiduciary duty as a banking institution by failing to take appropriate measures in addressing fraud and theft in the Internet, telephone and mail order industry".

    The complaint further alleges that Visa and MasterCard failed to disclose certain transactional and penalty fees to merchants and forced retailers to pay such these fees using an "abuse of their monopolistic powers".

    Furthermore, the complaint alleges that in "cyber-shoplifting" scenarios, there "are virtually no set of facts or documentation in which an Internet, telephone and mail order merchant could argue to prevent defendants from debiting penalty fees from their merchant accounts".

    As a result of these "unlawful acts", according to the complaint, merchants have been forced the bear the burden of credit card fraud while credit cards firms and banks made millions of dollars from their transactional and penalty fees.

    The Honorable Terrence W. Boyle has been appointed as judge in the case (number 5:03-CV-372-BO(3)).

    Lawyers in the case are inviting merchants to join the class action lawsuit online or by contacting attorney Mark W. Ishman, of Ishman Law, directly. His number is +1 919 942-1410.

  2. #2
    AO Part Timer
    Join Date
    Feb 2003
    Nice Article. Good contribution. This does fall hand in hand with why we have to protect our own identities. The government profits off of it. Sorry by government I mean visa, mastercard. None the less, average cost to a consumer for repairing their credit from fraud is 1000$. Who do you think gets that money anyway?

    Protect your self.
    Your heart was talking, not your mind.
    -Tiger Shark

  3. #3
    The Doctor Und3ertak3r's Avatar
    Join Date
    Apr 2002
    While merchants need to exercise "reasonable care", the bank's protect themselves, and the merchant pays..
    Just wish the same laws could be brought into play in Aussi.. The consumer has pretty dambed good protection.. the retailer is screwed regardless of the level of care taken..
    One retailer actually asked for 2 types of ID b4 accepting credit cards.. now here is a laugh.. A major Aussi Telcom.. requires ID b4 connecting a Mobile phone account.. guess whats counts as ID.. .. credit cards.. so with CC and a healthcare card (no Photo on these suckers) bingo someone else pays your phone calls.. oh and if the account app was done via a telco's agent (a Small Retailer) .. the agent foots the bill for the fraud.. if the victem presses the point..

    Faudster 1
    Customer 0
    Telco 1
    Retailer -1

    hmm I better get off my soap box b4 I really start something..
    dopeydadwarf another thanks for your tutorial

    "Consumer technology now exceeds the average persons ability to comprehend how to use it..give up hope of them being able to understand how it works." - Me http://www.cybercrypt.co.nr

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