Horrible Banking Experiences: Credit and Banking Laws Need to Be Changed
A shocking thing happened to me and it may well have happened to you. I was shopping at Ralphs a few weeks ago, and when I opened my wallet to swipe my credit card, I noticed that my VISA and Master Cards were missing. I was horrified and tried to retrace my steps. Where had I been? When had I used the cards?
I had just come from Bally's gym in Hollywood and assumed that I must have dropped the credit cards when I took my gym card out of my wallet. Perhaps I'd turned the wallet on its side and the cards fell out. I'd also used my American Express credit card a couple of times over the weekend, and thought (though unlikely) that they might have fallen out unnoticed then.
One thing seemed odd. My AMEX card was in a different place in the wallet. Could a brazen thief have taken the two other cards and placed the AMEX card in a new position so that I wouldn't notice they were missing? All while I turned my head momentarily while my wallet was on the counter? My head was spinning and that scenario didn't seem probable.
By the time I returned home a few minutes later, my telephone was ringing and I'd just missed a call from the VISA security people. They'd already picked up on some strange activity on my account, which meant my worst fears were realized. However they might have gotten them, a thief was using my credit cards.
I called the security office and, as the Master Card was also issued with the same bank, they were both immediately frozen, but the damage was already done. In the first instance, the thief had used the Master Card to spend over $1600 at Armani's, then tried to use the card at Sephora's Makeup boutique at the Beverly Center. At this point, something in the computer system said, "Uh-uh. This doesn't seem like a normal purchase" and suspended the account. No problem to the thief, as he/she just whipped out the VISA card and spent $650 on makeup supplies.
I was told not to worry. These things happen, and I wouldn't be responsible for the charges. New cards would be issued soon. However, I had to ask, as the thief(s) did not take my driver's license or, oddly, any cash, why the merchants didn't ask for any form of ID? They just allowed over $2,000 worth of product to waltz out of their stores, although when I go to K-Mart, for example, even when I spend eight dollars they ask for proof of identity.
Two days later I went back to Bally's gym and casually mentioned to some staff members that I'd lost credit cards, which I was sure had fallen on the floor there. One asked if I'd called the previous day, and when I said I hadn't she said that another person complained that someone had gotten into his locker and, as in my situation, only the credit cards were removed.
This seemed unfathomable to me, as I always lock my locker; some people don't. But it still wasn't crystal clear to me that my credit card loss was anything other than my own carelessness.
In a week's time, both credit cards were replaced and the charges were reversed on my account. I was vigilant in my behavior at the gym, making certain that I held my wallet upright when I swiped my entry card and always remembered to spin the combination lock a few times after I closed it so that a potential thief might not open it up simply by turning it slowly to the last number in the combination.
All was fine, and then a week and a half later -- last Thursday to be exact -- I was at Ralphs purchasing groceries, opened my wallet and -- you guessed it -- most of my credit cards were once again gone. This time, my AMEX card was chosen, as well as my newly reissued VISA Card, and, even worse, my production company VISA debit card, which is linked to my business checking account.
I couldn't believe my eyes, but now I was absolutely certain. Both losses were noticed immediately after leaving Bally's Hollywood gym, and so it certainly couldn't be termed a coincidence. I frantically called my credit union, which issued the credit VISA Card, naturally upset but also mortified because I had just incurred a loss with them so recently. Mercifully, the thief(s) spared my Master Card, so the two other financial institutions would be dealing with me in this manner for the first time.
This time, it was much worse. My bank-issued VISA debit account linked to my production company checking account had been charged $2,800 for a new computer at The Apple Store at Fashion Square in Sherman Oaks. They tried to use it to purchase another computer there, but it wouldn't go through a second time, so they just pulled out my VISA credit card and spent another $3,000. Then, they went over to Sephora's Makeup -- this time a different store and also at Fashion Square, and tried to use the VISA credit card again for almost $900 in make-up. As it was the second purchase, VISA declined it, and so they whipped out the now handy American Express card before making their getaway.
All in the space of less than an hour and within a couple of hours of when I'd entered Bally's Gym in Hollywood. All purchased without any thought by the merchants to ask for an ID, and in the case of the production company debit card linked to my checking account, the computer never picked up on the fact that a $2,800 purchase was accepted even though I'd almost never used the card to buy anything and never for over $100.
While it's very nice of them to say that I won't be responsible for the charges, I can't imagine why a system is in place where merchants are not required to ask for an ID, and if they don't why the merchants are not responsible for their laziness?
I called The Apple Store and Sephora, both at Fashion Square in Sherman Oaks, and spoke with their managers, telling them about the circumstances and that I was about to file a police report. Both of them indicated they couldn't do anything to halt the credit authorizations on my cards, as the thief(s) had made off with their items. My only recourse was to deal with my financial institution, and while they expressed sympathy for my plight they felt no particular guilt as an accomplice to this crime.
Okay, you might say, "What's the beef? You won't have to pay the freight." Except that my credit report will no doubt be affected to the extent that I might be some sort of future risk even though I'd placed my valuables in what I'd believed to be Bally's secure lockers. And the tumult which followed might have all been avoided if there had been a mandatory requirement in place to demand an ID before allowing purchases -- certainly, let's say, for more than $100.
And because of this negligence, how much of this fraudulent activity, which must amount to billions and billions annually, gets passed on to all of us consumers as higher financial institution fees and lower interest rates to help the banks get back their collective losses? It is time for our representatives in Washington to recognize that we've made it easier for thieves to ply their trade and pass a law that puts the responsibility on the tradesmen who accept these cards to make damned certain that the card holder is the person in whose name it is issued.
And while they're at it let's have them do something about the unreasonable time it takes for a check to clear, even when the amounts are debited from our accounts in as little as 24 hours. When I purchased a car last year and needed a cashier's check from my Los Angeles Bank of America branch, I was told by my bank representative that most of the money I was depositing from a major credit union in the Washington, D.C. area would not be available for almost two weeks. It was explained that my check would have to go to the proof department, which took a day, and then be mailed to the Virginia location by snail mail, and then it would take a week or so to get certification from that credit union.
I yelled and screamed and got my money within 24 hours. How many people do that? However, just out of curiosity, I checked my credit union on-line a couple of days later and saw that my money, which supposedly had such a long distance to travel, had already been withdrawn the day before from my credit union account. Had I not complained, the Bank of America would have been holding my money for two weeks until it was finally released.
I wrote letters to the Federal Reserve Chairman, the Comptroller of the Currency -- even Chairmen Barney Frank and Christopher Dodd of the congressional banking and financial services committees. From most I received not a word, but essentially the best response I got -- from the Comptroller of the Currency -- was that it was all perfectly legal, something called Regulation CC, and it was necessary for Congress to change the law.
We are no longer living in an age of "Catch Me If You Can," when banking really was mostly performed by regular mail delivery. To Congress, I would say, "Wake up! We have something called computers now, and people should not be denied their rightful funds for outrageously long periods."
So, I've related to you two solutions to problems that involve so many of us: the mandating of ID requirements for large credit card purchases and changing the check clearing requirements to reflect modern day society. Maybe if we all write letters to our congressmen our lives will be a bit better. And maybe if enough of us do so they will actually respond with a polite reply and, more importantly, by enacting the necessary legislation.
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I feel your pain. My daughter had her credit card stolen. The card was in her name but on my account so I had to cancel cards on everyone in my family, then get new ones with a new number. The thieves had gone on a spending spree, running car after car through a gas station, eating at different restaurants all over town, and even buying groceries. Not one of those vendors ever asked for ID even though the person who had the card was a male.
The police did a fantastic job catching the thieves which was easy as all those stores had video for him to look through and because the transactions are recorded to the minute you can pinpoint which part of the video you need to see.
The prosecutor's office dropped the ball again. They treat credit card theft as though it's not real theft. The young man who committed the crime had been doing this and getting caught for the past two years. He kept receiving probation for multiple felony theft charges.
I don't take anything of value into a gym. Better to keep your wallet in the trunk of your car or a locked glove box. I know your car might get broken into or stolen but I'll roll the dice. I take one key with me, the one to my car and I keep it pinned to an inside pocket.
Your comment about "the time it takes a check to clear" points to another enormous avenue for fraud: fiddling with the timing of transactions. A major national bank in a recent year earned, according to its annual report, $14 BILLION in "penalties and fees," and I have a hard time believing that so many of their customers were really that careless.
It may well be that as the financial house-of-cards that is the United States today continues to unravel, lawmakers might stop being accomplices long enough to consider creating effective laws ... but, being cynical, I doubt it.
I think the post points up a serious problem that seems to continue unchecked, for no apparent reason.
I'd like to add that credit/ identity theft is the fastest growing crime in America. A good solution to help staunch this activity is reversing the system currently in place. That is, we need an "opt in" system for credit card offers through the mail, rather than the opt out hit or miss method we use now.
Michael went through a lot of trouble twice and it will hurt his credit worthiness for awhile, which is deplorable. I believe some adjustments ARE neccessary, whether banks and issuers like it or not. Like another commenter, I don't want to harken in Big Brother, just some common sense safeguards, some of which the poster proposed.
All credit cards should be processed with the owner's picture on it, as are licenses. Would not be the end all to identity theft, but sure would have to help.
Michael,
Sorry for what you went through. A few months ago, I was visiting LA, and used one of those ATM's in an independently owned store, and it turns out there was a "skimming device" that was able to pick up my pin number, and then the thiefs were able to recreate an entirely new card, and then took out over $800 dollars over the course of two days. My bank credited my money back, but not after I racked up over $350 dollars of fines for all of the transactions that went over my balance. Luckily, they credited those too. Wells Fargo told me to only use ATM's that are with well known instutions, such as banks. They also told me that these skimming devices can be purchased at True Value Hardware, so it's not as rare or difficult as you'd think. Just wanted to throw a word out about this new trend.
Michael:
You should go to each of the respective merchants who charged your account(s). You should find out from them the name of their processing bank(Acuiring Bank) for credit card transactions. Each merchant has a contract with a so-called acquiring bank who processes credit card transactions and is responsible for crediting the merchant checking account at the merchant's bank. The acquiring bank is the risk monitor, and indeed, the contract will require "secutiry" from the standpoint of equipment right on through the identity of the card user. Once you see the contractural agreement between the parties, then you can see where the ledgislation needs to interfere. The Acquiring Bank and the Merchant are the focus for risk management. It is not MC, Visa, Amex etc who are the players nor is it the bank that issues their respective cards. And as always, if the Merchant were held responsible for anything fraudulent over X (say $200) you'd see the "free enterprise" adjustment by Merchants to meet that goal. Just who do you think takes the Loss you have avoided, is it the issuing bank, the acquiring bank, the merchant, or VISA (MC or et al)??? Somebody has to endure the loss. Complicated, and subject to litigation, but it is the Acquiring Bank(processing bank).
Michael..S
Today..I write on my signature line of my cards "Ask for I.D."...NO
I do NOT think it is asking to much to get I.D. for even small purchase..
Also..good luck changing the "hold" Banks put on funds..do you know how much they MAKE on that Float? millions and millions..
Michael, I sympathize with you.
And you're right. This will follow you around for quite some time, no matter how resilient you are in your efforts to correct it.
And I also absolutely agree that merchants have an obligation to take steps to ensure that credit cards are not being used fraudulently. There are simple ways they can do that - like checking signatures or PINs, which is a requirement.
But requiring ID for every purchase made with a credit card is going too far. And unnecessary.
There were plenty of red flags going up for all the merchants who accepted your cards. Either poor training or loose policies allowed those transactions to go through. Someone, somewhere along the line, should have seen that something was amuck.
But if you require thieves to show IDs, they'll just have systems in place to make fake IDs and show them. Meanwhile, the rest of us will have to sign up for the big-brother review. No thank you. They're already listening to my phone calls and reading my emails. I don't think I really want to be reporting in every time I go to the store.
And, of course, what you'd really be calling for is reporting in. If the IDs aren't verified, it's just garbage anyway. Take one step, you'll just end up running a sprint. There's no stopping the anti-privacy race once it gets going.
So while I really do understand your frustration, I can't agree with your solution. And I don't think it would have slowed down your gym pal anyway.
This was one slick operator. I don't imagine there are too many hurdles this pro couldn't jump.
Count your luck stars, Michael. Your bank caught this before even more damage could be done.
Now the rest, unfortunately, is going to be up to you.
See Michael Russnow's Profile
Dear Raven,
Thanks for your 2 comments and as you no doubt saw in my article, I did file a report with the police after the second instance, when it was clear that someone at the gym had pilfered the credit cards. The first time, I thought that perhaps I'd lost the cards; the second time, which like the first, was noticed just after leaving the gym and so at that point there was no question.
I disagree with you about checking IDs -- certainly about larger purchases. And the fact that my debit card could be used without the pin number is a scandal. When they scanned the card the machine apparently asked the thief if it was to be used as a debit or credit card. Had they chosen debit, a pin number would have been required. Choosing credit doesn't require this, but this is asinine as the amount charged with this particular card was not a credit purchase at all and went directly against my checking account.
Fake IDs will not work in the case of quick thefts such as mine, because you'd have to plan such a heist well in advance in order to have the correct name and/or photo in the course of the operation. Don't forget that most credit card fraud happens in a very short space of time, because the likelihood is great that the card will be noticed as missing and will be canceled by the card owner.
I wouldn't mind a mandatory pin number, which is often used in Europe -- mostly because the cards used over there are usually debit cards. My French cousin, when proferring his VISA at a restaurant, always has to punch in his pin number before the sale is confirmed. There's no reason why this couldn't or shouldn't be required on all card purchases, debit or credit. Contrary to what you've said, pin numbers are not in most instances used for purchases with regular credit cards. Only with debit cards -- and only if you choose the debit option.
I don't need a lawyer, as I incurred no actual damages, which I already stated in my piece. It's the bank or perhaps the store (if they can prove negligence) that will bite the bullet here, and I have only filed police reports in the hopes that they might catch the brazen thief or thieves. Most of the stores frequented have video cameras, and it's conceivable that someone at the gym will recognize the perpetrator if he/she didn't use a confederate to steal the goods from the store using my cards.
I'd be more worried about the fact that you've lost your credit cards TWICE from the same Bally's location. Insist that they clean up their problem, before someone else gets their cards taken who doesn't realize it soon enough, since they won't clear your charges if it's not soon enough...
See Michael Russnow's Profile
Of course, LeftRight, as you no doubt read, I did alert the Bally people who were rather casual about the whole affair, at first admonishing me for not having filed a report immediately. I told the manager of the gym, whom I called only a couple of hours after I got home, that my immediate concern was contacting the credit card companies to make sure the cards were stopped. The next day I dropped by Bally's Hollywood gym and showed one of the gym staffers a couple of the faulty lockers, then gave the manager an official statement about the theft and indicated that I was on my way to the Hollywood precinct to file a police report. I also called a Bally's trouble shooter at the main office, but after three days he has yet to call me back.
Regarding dadw5boys' comment, I am not at all wealthy -- most Hollywood professionals are not, and while I appreciate the advice and will no longer trust any of my valuables to the clearly insecure lockers at Bally's Hollywood gym, I've been told that leaving such stuff in one's car is not always reliable either. In particular near a place such as a gym, where thieves lurk and presume that a number of the patrons might well have left wallets, purses, watches and such in their cars to avoid the locker theft I encountered.
I guess the best solution is to leave most of my stuff at home and go to the gym with only my driver's license and gym entry card.
Michael, have you called the police? Or an attorney?
Because I hate to be the one to break it to you, but I just don't think you're going to get the results you want and deserve out of the same Bally's who hired this clown - and kept them on the payroll despite warnings that someone on staff was getting into lockers.
They could have taken steps. There were other reports. They did nothing it seems.
If there's anyone who failed you here, it's the gym who allowed this to happen.
But don't think they're the same ones who will make it right. They won't. If they were the kind of business who would do the right thing, what happened to you wouldn't have.
You have legal rights. Enforce them. No one will do it for you.
And don't wait. They're already working to protect themselves from it. Trust me on that.
Why do you take all your stuff into the gym?
Leave it in the car locked up. Carry your car keys while workin out, easy as that!
You can apparently afford the good life don't you know wealthy people are surround by theives most of the time??????
How do you think most of them became rich?
MR, I feel your pain. And, the option of simply not carrying credit cards at all is decreasingly impractical.
I know a particularly responsible college student who has no credit card, since she has essentially no income and no way to pay credit card bills without sucking more cash out of Mom and Dad. You would think that a person with no income who's technically still a dependent, could exist by simply paying for everything bought, especially if purchases were kept to a minimum, right?
On her way to college, she was in an accident and through no fault of her own, her car was totalled. She had comprehensive and liability car insurance, but no rental rider. One car rental company after another wouldn't rent to her because she had no rental rider (on her OWN policy) and no personal credit card. Period. Didn't matter that it wasn't her fault, and she had comprehensive, it covered a rental, and she had a good driving record, and her parents agreed to put the rental on their credit card.
So she became stranded in an unfamiliar city, and then upon finally bumming a ride to the airport, reaching her final destination by plane and more bummed rides, was without transportation for weeks until finally finding a rental company that would charge her parents' credit card while all awaited the insurance settlement, which after months, is still not complete.
So, what's the deal with the car rental companies, insurance companies, and credit card companies? Are they part of some vast conspiracy to suck us all completely dry? I don't see how this is legal, and if this girl had met some terrible fate while bicycling in the dark, cold, and rain, late at night to and from campus, I imagine her parents would have been asking this question in a litigious manner.
Two good suggestions, although I thought that the Check Clearing for the 21st Century Act was supposed to take care of the "waiting two weeks for a deposited check to clear" problem. No, wait - Check 21 gets the money OUT of your account quicker, but the banks get to play with the money going IN your account for a while.
Just wondering - has Bally's implemented any steps to prevent theft from its members' lockers? I'd be tempted to put up signs in the locker room warning other members until Bally's had the situation under control
See Michael Russnow's Profile
Thanks, CEU.
I'll keep you posted on Bally's. The obvious thought was that it was a staffer, but of course management says, "Oh, no, it couldn't have been ours." I pointed out some of the lockers were in very bad shape with the bottoms of the top lockers dented and malleable, so it's conceivable someone entered the locker through the bottom locker just underneath.
Regarding check clearing stuff, it's evident that congress has to hear from all of us en masse before they will do anything about it. Otherwise, just scream, and if you have a long history with the bank and they want to keep you happy they'll probably release your funds much sooner.
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