Bogus business practices?Follow

Gbaji - You're WRONG!



Business that live on small transactions hate debit/credit cards because the money comes from a "3rd party". Accepting these forms of payment costs the business money. The average cost is 2.25% of the transaction plus .20 per swipe of the card, if the card does not work when swiped and the numbers have to be typed in then the transaction costs more. This is why you see small businesses that accept debit/credit cards place a minimum purchase price on these transactions. So even with a debit card, the merchant is paying the 3rd party to conduct that transaction. I prefer cash and if not cash (the only point I agree with you on) a check is preferred, solely because if the check bounces I can recoup from the customer not only the cost of the purchase but handling fees as well. Businesses that do like credit cards accept them solely for the security that they will get their money, and by legislation bank cards have to be accepted if you accept credit cards, this may vary from state to state. On another note, according to the rules from my merchant services provider, we are not allowed to ask for additional ID to prove ownership of the card. There are a myriad of issues regarding debit/credit and if you where to ask almost any small business owner they would gladly remove the credit card machine from there store and only accept cash. This service is provided for customer convienance so that we do not lose the sale to the competition down the street.

Also if you are such a capitalist that understands the economy you would now that direct mail (bulk mail) is one of the most effective means of advertising available to American Businesses in getting their product or services into the hands of the American Consumer. The only approach more effective than that is the good old word of mouth.

As others have pointed out, for someone who knows so much about capitalism you sure do not understand the basics.

What's the danger there Smash? Some guys going to steal my routing number and pay my phone bill with it?


Huh? Don't be an idiot. I could get cash with just routing and transit numbers in about 36 hours, probably much less. Your bank doesn't care what the transaction is for. They don't discriminate between a TV or a phone bill payment.

I could buy stuff online and have it sent to a drop adress. I could empty your account before you realized there was a problem. Unlike a credit card, however, you'd be stuck with paying for it instead of not being responsible.

Unlikely in the extreme. They do sometimes reject checks based on name, but only in the case where there's been a rash of bad checks written with the same or similar name. But they factor in the bank, check number, and length of time the accounts been active into that. So if someone has an Eagle BoA check with a very low number, that was opened last week, and the name is very similar to a name that's popped up on multiple other bogus checks, the system will kick it out as too risky.

My account wouldn't match that profile. There's no reason for their system to connect the two. They only do name searches on "high risk" accounts (ones that are new with little or no history). They'd have no reason to factor that in with an account as old as mine.


Nope. Patriot Act requires them to maintain a watch list database, ussually of names only.

Again. This requires a much more sophisticated criminal Smash. *Can* you use routing numbers to steal from an account? Yes. Of course you can. But it's much easier to get stuff via credit card numbers instead.

So, while you are setting up a huge trail behind you creating drop addresses so you can use a routing number to buy stuff. The guy with the credit card numbers is just typing them in at POS machines and getting stuff right there. Off he goes with the goods in the trunk of his car in 5 minutes.

For a tenth of the effort required for the guy using routing numbers, the credit card guy can get a machine that'll program and stamp his own cards so that he can swipe them anywhere. All he needs is the number and he's golden. He can then go on shopping sprees as he wishes.

And that's the "sophisticated" criminals Smash. By far the most common instances of credit card fraud are perpetrated by POS operaters as crimes of opportunity. A guy handles someone's card making a sale. He gets a copy of the number and then uses that to charge up something for himself later. Or he cancells your first sale and rings up another with your stuff and his included. Often this gets by customers because they'll remember buying something at that location, but will have forgotten the exact amount by the time the bill comes in (not everyone saves reciepts).

That sort of thing doesn't happen with checks Smash. A better argument is that every method you could use to steal money from someone using a check can also be used to steal money from someone using a credit card. Except that it's easier to do it with the credit card, and there are several additioanl methods of stealing with a credit card that don't work with a check.

Get it? Checks are actually much safer for the consumer. I can't believe you are arguing this. They can be less convenient, but they are definately safer.

Yeah, whatever makes you happy. Your .000000000005% risk of fraud with a check is safer than my .0000000000006% risk with a credit card.

It's not reality, but it seems to make you feel better, so carry on with your nuttiness.

Yes. That's true. Um. But there's a trail involved here. While I suppose you can pay for stuff online that way, as Smash stated, you have to have a drop address to get whatever you paid for (otherwise they can simply trace the purchases right to you). That takes some planning to set up. Alot more planning then just walking into a store, typing in someone else's CC number into a POS machine, and then walking out with the goods.

Other uses for something like paypal for instance would be funds transfers. Again though, you're ultimately dealing with a financial institution on each end. One paypal account is tied to one bank account, the other is tied to another. While it's still completely possible to steal money that way, it requires a lot more work to do it and get away with it. If you transfer funds directly, you have to transfer them *to* somewhere. That target account has to be something that you can get the money out of. So, instead of a drop address, you have to create a drop account (which can be even more risky). There's just a lot more complexity and risk involved in check fraud.

Whereas you almost have to be a complete idiot to get caught using someone elses credit card number (people do, but they are criminals after all...). Anyone who has any access to a POS machine can steal from you. That's every single kid working a retail job in the US. The very people you hand those cards to every day. That's why that's the most common form of consumer fraud. Additionally, it's much much much more easy to pay for things online with a credit card number then with bank routing numbers. While I'm sure there are places that take them, most do not. Places that do are much more likely to be in the form of billing, rather then a business selling something. You can use routing numbers for some online services, but I don't think you can buy stuff on ebay with them (have no idea really. Feel free to check).

Alot more planning then just walking into a store, typing in someone else's CC number into a POS machine, and then walking out with the goods.


With a timestamped picture of you on a security monitor.

Just sayin.

Lol. Smash. For a guy who never worked in retail, you have a hell of a lot of faith in the security methods used. I'm almost dying laughing here...

I was responding to Nobby's statement that checks were an insecure method of payment Smash. If you have an issue with that, take it up with him. I was only arguing that they are safer then credit and debit cards.

I'm well aware that the chance of any person individually getting ripped off is slim. That's not the issue. Can we agree that of all the methods of payment other then cash, that a check is the safest method? That's all I was trying to say when you butted in.


Um. And I personally know of very few people who use credit cards regularly who *haven't* had some sort of unusual charges on their bill at one time or another. Almost everyone I know at one time or another has recieved a bill with double charges on them, or extra charges from a business that they did not make. It's not a big deal because it's easy to dispute them and get them taken off. But don't try to pretend it doesn't happen.

A very close friend of mine had his wallet thingie stolen from his desk at work (he works at a public high school, so that was probably not the best place to leave it, but he teaches art, so sometimes he has no choice). The two girls who stole it might have gotten away with it had they not chosen to use one of his charge cards at a Nordstrom the next day. The reason they got caught wasn't because the system recognized that the card was stolen. They got caught because my friends wife used to work at Nordstrom and had a special card distributed to employees only. That and the person at the POS recognized the name, called them at home (cause they had the number on file), and held the two until the cops arrived.


Point is that no one checked ID. And it's very common for kids to use their parents cards and no one thinks anything of it anyway, so you don't need a fake ID or even a complex story. It's trivially easy to use someone else's credit card or credit card number. The lack of security proceedures surrounding credit card use is alarming. I really think you are the one wearing blinders here Smash. If you knew just how little checking they do at all, you'd change your tune.

Sure, most credit card theft doesn't hurt us the consumers, so maybe from your perspective it doesn't really count. But that doesn't mean it doesn't affect us. They pass that cost on in the interest rates you pay. As a Democrat, I'd think you'd be up in arms about CC theft. After all, it's traditionally the poorer people who are more likely to carry debt on a credit card, whereas most middle class or better folks use it as a credit building device and always pay off at the end of the month. So all that theft is being paid for by the poor! OMG! The agony... And you don't seem to care at all... Some socialist you are. :)

Oh. Almost forgot. Along with the cards, his checkbook was also stolen. Um. They did nothing with it. They didn't even attempt to try to write a bad check. Too much work. Why do that when you can simply walk into a department store, say it's your moms credit card and buy whatever you want and no one will question it (unless you're really stupid or really unlucky as in this case)?

Edited, Mon Nov 8 22:37:56 2004 by gbaji

I knew someone once who said his brothers, wifes, sister-in-laws, uncle's best friend was a victim once. Other than that? No.

So, I'm bored. My wife's packing for me, which is a good sign for me to stay out of the way, and I decided to check out check fraud.

http://www.ckfraud.org/statistics.html


# According to Ernst & Young more than 500 million checks are forged annually, with losses totaling more than $10 billion.

# According to a report issued by the American Banker, an industry bankers magazine, estimates of losses from check fraud will grow by 2.5% annually in the coming years.

# According to the Create-A-Check website, in 1997 there were about 496 million fraudulent checks written for a total of approximately $9.9 billion. This means that an average of 1.4 million fraudulent checks was written daily worth $27.3 million.

# According to the National Check Fraud Center, check fraud and counterfeiting are among the fastest-growing problems affecting the nation's financial system, producing estimated annual losses of $10 billion and losses continue to rise at an alarming rate annually.


Dunno. Doesn't strike me as something that's going out of style.