Fraud Season Credit Card Do's, Don't's for Shoppers

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Shoppers aren't the only ones heading to the mall looking for gifts this holiday season. So are credit-card thieves.

The potential for credit-card fraud increases this time of year, when hordes of harried shoppers are out and about with credit cards. More than one-third of all sales transactions each year take place between Thanksgiving and Christmas.

Each year, thieves and con artists bilk individuals and businesses worldwide out of more than $2 billion. Credit-card companies are fighting back: By 1997, many credit cards will have computer chips embedded in them to help protect card owners from fraud.

But even without computer chips, you can still be a smart card user, says James H. Steel, vice president of security and risk management for MasterCard International. He is a former Secret Service agent who supervised criminal investigations relating to credit card fraud.

On a mall tour Tuesday, T Steel pointed out situations in a department store and several smaller shops that could lead to fraud for merchants and customers.

The worst thing he saw was a customer flashing about $150 in cash, openly riffling through the bills to pay for a purchase.

"It's a good thing we're good people," Steel said. "If we were crooks, we might follow her to the parking lot and try to get some of that cash."

Watching another transaction, Steel noted that the clerk gave back the customer's credit card without checking whether the signature on the back of the credit card matched the signature on the sales receipt.

Checking the signature is "one way merchants can make sure they are dealing with the card owner," he said. He said sales clerks are trained to look at credit cards for signs of tampering on the hologram or the embossed numbers. The signature strip, he said, is tamper resistant.

Clerks who are suspicious of any card - or card holder - are encouraged to call a sales processor, who in turn calls the issuer of the card to verify the owner of the card. Sometimes, those steps lead to a call to mall security or the police. Alert clerks may collect rewards of up to $1,000 from credit card companies for helping to derail fraud.

Steel told a story about a man who went into a bank in Des Moines to get a cash advance with a credit card. The teller was skeptical about the driver's license the man presented for identification. When the teller phoned the sales processor, the man jumped on the counter, grabbed the driver's license and ran. …