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Card Cracking Cracks You

Summary: Do Not Give Anyone Your PIN, Password or Login for ANY Reason PERIOD.

I know I have’t been writing recently largely because I do this blog from my office at the credit union and 2016 has been a train wreck in terms of fraud attempts.

One of the biggest recurring situations we’ve had is called “Card Cracking” (and no, I have no idea who came up with that!) In Cracking, the Fraudster gets the Victim to willing give their PIN or login information, deposit invalid items, and withdraw on the deposit before the bank discovers the fraud. As dangerous as any fraud scheme is, Card Cracking is worse because the victim is a co-criminal.

Let me repeat that: Card Cracking Makes the Victim a Co-Criminal

I really need to be clear on this point: If you willingly give your Pin, Card, Password, or other account access information to anyone, you are responsible for any transaction they make. And if you file a Fraud Claim after allowing someone else to use your account, YOU are committing fraud.

And we at the financial institutions are running out of sympathy.

So here’s a general scam:

Vic Tem is a college student (or in the military, single parent, job hunter, etc.) and a “Friend”, Sam Shyster, (or FB page, or quick loan service, or the list goes on) says they can get Vic quick easy money and all Vic has to do is let Sam do a transaction on Vic’s bank account. Sam will make a deposit and a withdrawal, Vic will get a portion of the cash, nothing will go wrong and Vic can always get recovery from the bank if anything does.

So Vic needs money and believes Sam is honest (or thinks that there is no risk, or in many cases knows this is ‘shady’.) Vic gives Sam the ATM card and PIN (or the online or mobile banking login) and Sam deposits a counterfeit check.

[Let me pause here and point out that it doesn’t matter which method is used, because Sam didn’t steal the access. Vic gave Sam the information, so Sam is now acting as Vic’s Agent. Vic gave Sam authorization to deposit the counterfeit check. This is spelled out clearly in the disclosures Vic got upon opening the account. Don’t believe me? Go to your bank’s website and read the account holder and online services agreement. I’ll wait.

Back?

OK, let’s move on.]

As soon as funds are available, Sam withdraws them. Maybe a portion of the deposit was available immediately. Maybe Vic just got paid and had money available. Maybe Vic had a bank-to-bank transfer service and Sam withdrew funds from that.

Vic gave Sam permission to access the account, so Vic is responsible.

Two – five days later (depending on if it goes over the weekend), the fake deposit gets returned and the money is reversed from Vic’s account. Now Vic goes from having a little extra money, to being in the negative. Highest case I’ve worked on personally? $16,000+.

Again: The victim owed the bank more than sixteen thousand dollars. Are you seeing why this crime freaks me out?

Next, Vic has a conversation with the bank, in which Vic must explain where the deposit came from. Sam stops answering Vic’s calls or emails. Vic must return the funds, even if that means getting a loan to do so. And if Vic claims that Sam stole the access information, the bank provides a gigabyte of data showing that Vic knew every time Sam accessed the account and did nothing. (That’s why the bank insists on sending all those notification emails.)

Vic gave Sam permission to access the account, so Vic is responsible.

So, now you’re asking ‘Why isn’t this swindling? Didn’t Sam lie?’ The Answer: No. Sam didn’t need to lie. Regardless of the reasons Sam gave for wanting the access, Vic gave Sam the access. This is a contract dispute between the Agent (Sam) who had permission to act on the Principal’s (Vic’s) behalf. Vic must deal directly with Sam for restitution, not the financial institution.

So here is today lesson:

Don’t give anyone your PIN

Don’t give anyone your password

Don’t give anyone your login information

Don’t give anyone any financial access that does not appear pre-printed on a check – name, account number, and bank.

Let’s simplify this a bit. If Mom gives you her card saying go pull out $5 for lunch, and you pull out $10 for candy, Mom is still responsible for the withdrawal. The fact that you lied about why you wanted the money or how much you were supposed to take is irrelevant. Mom made you her Agent gave you permission to act on her behalf – and agreed to stand behind anything you did in her name. She can whoop the tar out of you when she finds out (mine would!), but she has no fraud claim against the bank.

And in the case of Card Cracking, neither does the victim.

Hope that Helps!

KasH

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