Just last week New York City police participated in what very well may be the largest identity-theft bust in U.S. history. A grand total of 111 suspects were indicted. All of them are believed to be part of a global network of information hackers, credit card counterfeiters, and thieves involved in making fraudulent purchases amounting to an estimated $13 million.
“This is by far the largest and certainly amongst the most sophisticated identity-theft credit card fraud cases that any of us have ever seen,” Queens district attorney, Richard A. Brown, told The New York Times.
Somewhat disturbing to police and prosecutors, they report that early in their investigation, they received no tips from either credit card companies or retailers, despite the fact that balances on stolen accounts were increasing dramatically.
According to The New York Times, Mr. Brown also made the statement that credit companies were “putting too much money into marketing and not enough into security,” speculating that the companies, “would rather take the losses” than spend more on stronger security measures in order to prevent theft.
As reported by the huffingtonpost.com, David Robertson, publisher of The Nilson Report, claims that for every $100 in debit and credit card transactions made within the United States, 9 cents is lost to fraud. This is twice as much as the global average of 4.5 cents.
The commander of the NYC Police Department’s Identity Theft Squad, Deputy Inspector Gregory T. Antonsen, told The New York Times that law enforcement has been strongly pushing the business community to do what they can to improve security, arguing specifically for credit cards that are common in Europe, which have embedded identity chips.
Such “smart cards” require that cardholders punch in a personal identification number at the point of sale, similar to what American consumers do during debit card transactions. Smart cards better deter fraud by containing computer chips that encrypt transaction information, instead of using a magnetic swipe strip on the back.
“It makes it much harder to commit fraud,” David Robertson said to the huffingtonpost.com.
However, one of the biggest issues preventing U.S. banks from issuing smart cards is the expensive upgrades retailers would have to carry out to their payment systems.