The day ski shop fraud showed up on Fox
The teaser for Tuesday’s Fox News at 9 was brief and upsetting. “More than 15,000 customers of this Denver ski shop may become victims of credit card fraud!” At some point this season, an unknown person or group broke into a Front Range shop’s reservation and payment website, built and managed for them by a third party. Once in, a person or persons unknown may or may not have accessed, viewed, and/or downloaded the customer equipment reservation files including credit card numbers of the shop’s customers. Once alerted to the web break-in, the shop sent letters to customers alerting them to the possibility that someone may have obtained their credit card information and might use it.Tuesday was a slow news day at Fox. This website break-in was the lead story; without it, the evening news would have opened with the breathtaking revelation that an elderly man, convicted at one time of a sex offense but no longer capable of having sex, had turned up after nearly 30 days out of touch with the state agency responsible for keeping tabs on him.
This story, thankfully, allowed newscasters to mask cheap sensationalism in a gauze of consumer advocacy. The newscasters weren’t trying to scare you, they were simply fulfilling their obligation to inform everyone who might be affected of the risk.Actually, that had already been done by the ski shop, although it’s not clear whether they sent letters out of concern for their customers, or on the advice of the lawyers who, if faced with a customer who ultimately found unauthorized purchases on his credit card statement, could hold up that letter in the ski shop’s defense. It’s a safe assumption that the motivation was more legal, more CYA, than paternal or civic, not that the business in question is incapable of being paternal or civic-minded, but certainly little good can come from telling customers you were careless or that the third party you hired got caught unprepared. Assuming the blame is one thing, but passing the buck only spreads the blame without shifting it. To make matters worse, the once in a blue moon that a ski shop makes the news, the shop didn’t even get a face on camera to allay concern or defend itself. The best they could do was a cell phone call-in, taped, edited and replayed by Fox.
And what of the customers? In a way, by sending all those well-intentioned or legally motivated missives, the shop may actually cost their customers more if fraud does occur than if they, the shop, had remained silent and let events run their course. The typical credit card holder will remain blithely unaware that his card information is being misused until either he has legitimate charges denied or when he opens the month’s statement of charges and finds someone else’s wish list fulfilled. In cases of fraud, the customer’s liability is usually capped, at $500 or even $50 or often he won’t be out a dime. In the competitive market for credit cards, fraud is just a cost of doing business to keep you, the idiot paying an annual fee and usurious rates of interest as high as 24 percent(!). In the world of the written check, fraud losses run between 10 and 50 billion dollars a year. Estimates place a million bad checks in the banking system every day, and the banks eat those bad drafts. Credit card companies, like the banks, dry swallow the cost of fraud because it’s non-violent, crosses state lines and involves a thief anonymous behind a screen of numbers, so as with check fraud it’s easier to simply pass the expense of fraud on to all credit card holders than try to interest law enforcement. In this case, by notifying its customers the ski shop has put the burden squarely on them if fraud does occur and the customer hadn’t taken action after receiving the shop’s warning letter. Ouch!
Any business owner who’s watched the forms of payment move from 60/20/20 credit cards, checks, and cash, to almost all credit or debit cards wants fraud prosecuted, but what I want is the guy who hacked into the website. If it was a crook, jail him, and if it was a looky-lou hacker with nothing better to do, he should be lashed each winter to a cross of skis in front of the ski shop. That shop has been hurt whether fraud results or not, and they deserve this pound of flesh.Marc Carlisle writes a Thursday column. He can be reached at email@example.com.
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