How One Small Bank Is Battling MasterCard and Bank of America
With credit and debit card fraud and security breaches running rampant these days, a bizarre case of possible card fraud has emerged in the Windy City, involving a cast of players including Bank of America Corp. , MasterCard , Illinois-based First American Bank - and a host of Chicago taxi cab companies.
A pattern of card fraud and customer complaints
First American first smelled a rat on February 10, after receiving 11 complaints from checking account customers saying that they had experienced fraudulent charges on their debit cards. The bank traced the activity, which showed the source to be various taxi cab companies in the Chicago area.
The bank notified Bank of America, the processor for the taxi cabs, and MasterCard, asking them to stop processing such transactions, but problems continued. On February 28, First American filed a complaint with the city of Chicago, describing the problems with debit card use in city taxis. The fraud has been ongoing, the bank believes, since early last December.
With questionable charges adding up - First American noted a total of at least $62,000 by late February - and no action by either B of A or MasterCard, First American decided to go public earlier this month. It posted a security notice on its website, advising its customers to refrain from using their cards to pay for taxi fare. The bank noted that the problem continues, despite the bank's having notified both MasterCard and Bank of America of the problem, and beseeching them to take action.
MasterCard and B of A have indicated that they are performing their own investigations, and refuse to comment further. Bank of America has denied that it is dragging its feet, and a spokesperson from MasterCard has expressed sympathy with First American's frustration. Still, from both companies, silence prevails.
Security issues are top of mind for credit card companies, to be sure. On March 7, MasterCard and rival Visa made a joint announcement, introducing the creation of a group that will focus on increasing payment security for "consumers, retailers and financial institutions". One of the priorities will be pushing for the adoption of EMV chip cards, the brainchild of Europay, MasterCard, and Visa, which are less prone to fraud, unlike the current magnetic stripe now in use.
Meantime, the mystery surrounding the debit card fraud that appears to be limited to taxi companies and First American continues - as does the lack of response from B of A and MasterCard. For card users, taxi cab rides have just been added to the growing list of places consumers use their debit cards at their peril.
The shape of things to come
The plastic in your wallet is about to go the way of the typewriter, the VCR, and the 8-track tape player. When it does, a handful of investors could stand to get very rich. You can join them -- but you must act now. An eye-opening new presentation reveals the full story on why your credit card is about to be worthless -- and highlights one little-known company sitting at the epicenter of an earth-shaking movement that could hand early investors the kind of profits we haven't seen since the dot-com days.Click here to watch this stunning video.
The article How One Small Bank Is Battling MasterCard and Bank of America originally appeared on Fool.com.Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends Bank of America, MasterCard, and Visa. The Motley Fool owns shares of Bank of America, MasterCard, and Visa. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.