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American Morning
Cardcops.com Founder on Busting Fraud
Aired July 09, 2002 - 09:16 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LEON HARRIS, CNN ANCHOR: Chances are very good that credit card thieves have got your number. More than 700,000 people fall victim to credit card and identity theft each year. But now there is help out there for people like that. A new Web site, cardcops.com, has already tipped federal authorities to an Internet credit card scam, and they can tell you if some stranger is using your info.
Joining us now from Los Angeles to tell us all about it and how it works is the Web site's founder, Dan Clements.
Good morning, how you doing?
DAN CLEMENTS, CARDCOPS.COM: Good morning.
HARRIS: I have to ask you first off, how often is this happening? And I'm assuming that with the explosion of the use of the Internet this has got to be happening at least thousands of times a day.
CLEMENTS: It's happening a lot. We're just not sure how much it's happening.
HARRIS: Still not sure with all the tracking that you're able to do now?
CLEMENTS: Well, we know that a lot of consumers are being fleeced out of their credit card information, and we know a lot of e- commerce merchants are losing credit cards. But it's a guesstimate on how many millions of credit cards are floating out there in cyberspace.
HARRIS: How sophisticated are the scamsters now?
CLEMENTS: Well the scamsters pretty much target naive Internet users, and they fleece them out of their credit card and personal information. But more importantly, I think e-commerce merchants are targeted, and they're the ones that get their databases hacked and lose credit cards.
HARRIS: Yes. Well, when that happens, who has the greater incentive to go after the person who's done that: Is it the bank, or is it the retailer?
CLEMENTS: It's actually the retailer. The consumer is limited to, like, a $50 liability, but online merchants pay the entire bill for online credit card fraud.
HARRIS: And if they pay -- if they pay the bill, eventually we all pay the bill.
CLEMENTS: That is correct.
HARRIS: Now here's what I want to know, how did you get other people's credit card numbers? As I understand it, weren't -- isn't that what you did, you went and got numbers that people that you believe were being taken advantage of? And if you were able to get the numbers, that obviously shows how easy it is to do.
CLEMENTS: That is correct. We just gathered up credit card numbers in cyberspace from public areas. They were chat rooms, they were search engines, like a Google search engine, where you can find credit card numbers, merchants that accidentally posted customer orders and credit card numbers. So we just went and gathered those numbers. And we put them into a database that consumers can access and just see if their personal information is floating out there in cyberspace.
HARRIS: Now how does someone's credit card number get into a chat room?
CLEMENTS: Well, these are public chat rooms that basically chats float globally around the world. And you can go into the chat room yourself and you can see credit cards being bought and sold regularly, daily. This very minute it's happening.
HARRIS: No kidding!
CLEMENTS: Yes.
HARRIS: That's scary. That is scary.
Now let's go through some tips. I know that you got some tips together for -- that you put together for people who might be making some purchases online to protect themselves. Never use a debit card. Use a credit card with a low line of credit. That's pretty obviously.
CLEMENTS: Right.
HARRIS: But dedicate one card for online purchases. Is that realistic?
CLEMENTS: Well, I think it is. If you have multiple cards, you may want to dedicate one card and use that just on the Internet so you may be limiting your troubles down the line.
HARRIS: How about this last one here: Use a card issued by an online bank? That's...
CLEMENTS: Yes, that's a very interesting concept, and that may come into play more in the future. That way you can see your MasterCard and Visa charges within days, instead of waiting 40 days to get your statement, which by then, you know the thieves are down the road, and the e-merchant has, you know, taken the hit for the merchandise.
HARRIS: Now, are the banks themselves doing anything to help out on this matter at all?
CLEMENTS: Yes, you know credit -- the Visa and MasterCard do have some programs that are trying to limit credit card fraud on the Internet, and I think they're good programs. We just need a little bit of help from the consumers here to help us with the eyes and ears out there in cyberspace.
HARRIS: Yes. How many names and numbers do you have on your Web site at CardCops?
CLEMENTS: Well there's over 100,000 credit cards in the database.
HARRIS: A hundred thousand...
CLEMENTS: Our consumers can actually...
HARRIS: I'm sorry to cut you off, but that's 100,000 that you actually found out there?
CLEMENTS: Right, in the last eight weeks.
HARRIS: OK.
CLEMENTS: But we've been giving these cards to the credit card associations and national law enforcement for the last year. But there's a time lag. It takes months to get these cards into the system. If the consumers let us know what's going on out there, if they feel they've been defrauded or shopped at an e-commerce site that they didn't feel was secure, let us know, because that information can cut down the lag time. And we can really shore up the credit card problem on the Internet with the consumer's help.
HARRIS: There you go, folks out there, good advice. If you have any suspicions whatsoever, go check out cardcops.com.
Dan Clements, thank you very much. Sure appreciate the advice. Have a good one.
CLEMENTS: My pleasure. Thank you.
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