Statement of Thomas F Kelleher on Behalf of Mastercard International Incorporated Before the Committee on Banking, Housing and Urban Affairs, Subcommittee on Consumer Affairs, United States Senate (From Credit Card Fraud - Hearing, P 87-117, 1983 - See NCJ-92875)

• NCJ Number: 92877
• Author(s): T F Kelleher
• Date Published: 1983
• Length: 31 pages
• Corporate Author: Mastercard International Inc
• Publication Format: Document
• Publication Type: Legislative/Regulatory Material
• Language: English
• Country: United States of America

Annotation

This testimony statement discusses the scope and nature of credit card fraud, notes loopholes in Federal laws pertaining to this offense, and suggests, legislation to counter the problem.

Abstract

Based on a review of card fraud activity, MasterCard estimates that the improper use of account numbers, whether through card alteration, card counterfeiting, or collusive merchant activity, is primarily responsible for the unprecedented increase in card fraud activity. The research further indicates that the dramatic increase in account number abuse is largely the result of the participation and direction of sophisticated criminals rather than the petty thief of earlier times. Organized crime figures prominently in the burgeoning card account abuses, as evidenced by recent arrests, investigations, and newspaper reports. Current Federal laws affecting card activity -- the Truth in Lending Act and Electronic Funds Transfer Act -- do not adequately address the offenses which have evolved since these laws were enacted. They do not deal at all with abuse of the account number without the card. Another loophole lies in the fact that it is not a crime to counterfeit a card or even to posses such a card. Further, some of the subsections of the law contain dollar-amount minimums to trigger liability. Technically, these minimums must be applied to each card which is used rather than to each person or persons involved in a conspiratorial ring. It is important for the card crime laws to be drawn as broadly as constitutionally permissible to provide prosecutors with the necessary tools with which to convict offenders. The appendixes contain copies of a two-step draft legislative approach which suggests changes to both Title 15, the existing law, as well as to the general criminal code, Title 18. The Title 18 revisions would address criminal abuses of credit card and debit card systems in a new chapter dealing with these payment mechanisms. The loopholes already mentioned would be plugged through suggested changes to Title 15. Data on the scope of card fraud are also provided.