Thursday, July 23, 2009

Why Writing “See ID” on Credit Cards Is The Worst Thing You Can Do

Author: Nick
Category: Money

comic 69! - see id

Yes, even worse than beating puppies. Because credit cards won’t grow up to pee on your slippers. Unless you have Capital One.

Back in high school, I did a stint in retail selling greeting cards and balloons. It was absolute hell for three reasons:

  • Try tying 300 latex balloons every day. I developed a 4mm deep indentation in my tying finger.
  • 90% of our customers were the oldest of old people and the socceriest of soccer moms.
  • Our credit card processing equipment was so old that it took 2-3 minutes to process each card. And half the time, a valid card would need to be processed 2-3 times in order to finally go through.

So whenever someone would hand me a piece of plastic, I knew it would be at least five minutes before I could go back to flirting with my gorgeous co-workers. Thus I would often attempt to encourage people who were spending 64 cents for a single cut-rate greeting card to pay in cash if possible. (My manager didn’t mind as it would often save us on credit card transaction fees.) Still, that wouldn’t work if somebody were purchasing $300 in Teddy Ruxpin party favors.

Fortunately for my lazy, hormone-driven self, I eventually stumbled upon a copy of the Visa and MasterCard Merchant Agreements. Here’s a fun excerpt from Visa’s:

While checking card security features, you should also make sure that the card is signed. An unsigned card is considered invalid and should not be accepted.

The agreement goes on to explain that some customers like to write “See ID” or “Ask for ID” in the signature block of their credit cards in order to deter fraudulent use of their cards. So, the jackass that I was in high school, I would reject any card with a blank or “See ID” signature line unless the customer did as Visa and MasterCard required: show ID and sign the card in front of me. With my very permanent black marker. Nobody ever did. I convinced my manager that I was helping to protect the business from chargebacks. And for some reason, the hot girls at work would get turned on whenever I yelled at an 86-year-old grandmother about her invalid credit card.

The Futility of “See ID”

Years later, after my manager was convicted of balloon bestiality and all of my hot co-workers had become prostitutes, I pondered why writing “See ID” on a credit card is bad. It certainly sounds sensible: If every merchant checked your ID against the name on the card, it would prevent Mr. Stealy McFelony from using your card (unless your name is also Stealy McFelony which would be awesome). In practice, few minimum-wage cashiers even check the back of your credit cards for a signature. And if they do, rarely do they compare them to the signature you provide on the receipt. I know this because:

  • I have a credit card I use exclusively for swiping at the gas pump. Its signature block says “THIS CARD IS STOLEN.” Occasionally I forget and use it somewhere else. Nobody’s ever stopped me.
  • I generally sign my credit card receipts in humorous ways, especially on electronic signature pads. While the cards themselves have valid signatures, I often sign receipts with “VOID VOID VOID,” “Mickey Mouse,” or “Zombie Hitler.”

Protecting your physical credit cards is also now relatively pointless as it is easier than ever to forge a new card. I got a call a few months ago from one of my card providers indicating they had seen some suspicious activity on my account. Indeed, someone had been using my card to attempt to purchase HDTVs from Wal-Mart stores—in person!—but the card was rejected. The strange part is that the card was never lost or stolen; likely the number was compromised by a dishonest restaurant worker as the card is used primarily for its rewards on eating out, and someone created a fake card using my number.

But even if writing “See ID” is futile 90% of the time, it certainly can’t hurt, right? Right! And by “right!” I mean “congratulations, victim of identity theft.” You see, every time you give somebody your driver’s license, you are giving them, at a minimum:

  • Your full legal name
  • Your address
  • Your full birthday
  • A number used to identify you to government agencies

Some state-issued IDs have even more information on them. But even if yours just has the information above, an identity thief can use your ID as a starting point for opening credit accounts in your name, forging other identifying information, and just plain taking over your life. They may even forge an ID in your name and convince your spouse to sleep with them. (Your spouse does ask for ID before going to bed each night, right? Right?)

Now you might be thinking that the cashiers behind the counter at Hot ‘n’ Trendy couldn’t possibly be identity thieves. And even if they were, they’d only see your ID for a few seconds—not nearly enough time to copy down or memorize your information. If you’re thinking that, consider the following:

  • Retail cashiers often make close to minimum wage. Identity thieves make a whole lot more until they’re caught, which isn’t all that often.
  • As often as “See ID”ers show their ID, it would be virtually impossible to pinpoint the source of any identity theft.
  • Cameras that can capture all the information off your ID can be the size of a cell phone or smaller.

Assuming you’re not peeing your pants in consumery terror, you might be wondering if I’m just posing a hypothetical scenario. Indeed, the bullet points above are based on a real experience from a few months ago.

Horrifying Story Time!

My wife and I were in a clothing store with some of her friends, and as women must spend at least one hour in any given store, I was bored to the point of near-insanity. I started to wander the store aimlessly and eventually heard those fateful words from behind the checkout counter: “May I please see your ID.” Only this time, the cashier—the only one behind the counter—sounded ecstatic, whereas no cashier in the history of the world had ever sounded ecstatic about anything up to that point. I was standing to the side of the counter, so I could see the cashier’s actions behind it. As the customer handed over her ID, I noticed the cashier tapped it on the counter a few times while swiping the credit card with her other hand. A perfectly innocent action, so I thought nothing of it.

A few minutes later, the next customer also paid with a credit card, though I could see from my viewpoint that it was clearly signed on the back with some signature scribble. Yet the cashier asked for ID. I figured the store had simply instructed her to ID every card user—a clear violation of their merchant’s agreement with credit card issuers—but I decided to let it go as I was having too much fun ogling this fine-looking cashier.

But when another customer came up a short time later and paid with a credit card, the cashier did not ask for ID. I looked over and saw that there was a second person behind the counter then; a closer look at his name badge revealed he was the store manager. After the manager left the checkout area, Hot Cashier Girl (that’s what I named her, because she is a hot girl cashier) went right back to asking for IDs from credit card users. Each time, she would tap the ID on the counter while waiting for the credit card to process.

About 20 minutes had gone by, and with no sign of shopping completion from my wife and her gang, I wandered the store briefly and returned to my original spot on the side of the checkout counter. Another credit card user was prompted for ID from the cashier, but this time something strange happened: when the cashier went to present the customer a pen and receipt for signing, the cashier dropped them on the counter beside her and scrambled to pick them up, scattering several items on her side of the counter in the process. After the customer signed and left, I noticed the cashier very meticulously return a blue lunch knapsack to its original position—lying flat but with the bottom pointing toward her.

I finally confirmed her plot when the next customer paid by credit card. Hot Cashier Girl wasn’t just tapping their IDs to pass the time while cards were processed; she was purposely showing the face of the IDs to the bottom of her lunch bag. I moved around to the other side of the counter and confirmed my suspicions: there was a small black hole at the bottom of her bag—just wide enough for a small camera to film through. Hot Cashier Girl had been videotaping every single customer’s ID.

I spotted Mr. Manager on the other side of the store and asked him why Hot Cashier Girl might be asking for IDs. He said it definitely wasn’t store policy. Then I asked why she might be tapping each ID in front of her holey-bottomed knapsack. He replied, “Are you serious?” and started walking toward the checkout counter. I rounded up my wife and gang who were finished in that store anyway (they found nothing they wanted) and we left. About 30 minutes later, we passed by again and I noticed four uniformed county police officers in the store. I like to think there were four more in the back asking Hot Cashier Girl for her ID.

I’ve tried to find any news coverage of this event, but I suspect the store did what it could to keep it quiet. That, and there was a shooting at the mall the very next day (after hours, probably drug related), and shootings are much cooler than identity theft.

I’m Not Safe! Should I Just End It All Now???

If providing ID each time you pay with a credit card is even less safe, what should you do? You have a few choices:

  1. Pay cash for everything. You’ll miss out on credit card rewards, and you’ll be impacted more by mugging or pickpocketing, but your payments will be totally anonymous.
  2. Just sign the damn card. Even if your card is compromised, you’re generally protected from unauthorized purchases. It’s a bit of a hassle to get things straightened out if your card is lost or stolen, but it’s easier than dealing with identity theft.
  3. If you absolutely must write “See ID”, provide an ID without all of your identifying information on it. Try using a school or work ID. If the store refuses it, it’s your own fault for not playing by the credit card company’s rules.

Above all, remember that hot women are far more likely to be identity thieves than their less attractive counterparts, probably because they can get away with it easier.

Tuesday, November 6, 2007

Thank You For Managing Your Account Online; Here Are Twelve Paper Letters Containing Your Full Account Number

Author: Nick
Category: Money
Topics: , ,

you are approved... to suffer!!!!

Ah Monday. The return to a wonderful job after a long weekend. The joy of sharing the highway with thousands of other happy individuals. The return of the mail carrier after a heart-breaking two-day absence.

Normally Monday means a slightly heavier load of mail since it hasn’t been delivered since Saturday, but yesterday I was greeted with an obscene number of envelopes bearing those familiar logos of the likes of Capital One, Bank of America, Citibank, and various other financial institutions who want my money, my blood, and what little space remains in my recycling bin.

But yesterday was different from the usual deluge of 0% balance transfer offers and $50 for opening a checking account advertisements. There were no ads or offers in yesterday’s mail. What was there? Confirmations. Confirmations of my online internet activity. Credit line increases. Balance transfer executions. E-mail address changes. I counted 12 separate confirmation letters in all. All on paper, all in separate mailings.

I’d received similar paper mailings before, but never more than one on any given day. I have been fooling around with my various credit card and savings accounts lately, requesting larger credit lines and taking advantage of account opening bonuses and interest-free credit card loans. I guess all of that fancy online accounting converged into a single day of mailing.

But this huge batch of confirmation letters irked me in a way that no single confirmation letter has ever irked me before. I counted three separate causes for my irkyness:

  • Paper letters for online activity. Thanks to the power of the internet, I can do pretty much anything imaginable with my credit and bank accounts from the comfort of my couch. All it takes is a few mouse clicks, a couple of keystrokes, a swig of gin, and all my finances are in order. So then why must I get all these paper confirmation letters when I do something online??? I know you sometimes need 5-7 days to qualify me for that massive credit line increase, but have you ever heard of e-mail?
  • Every letter had my full account number. “Your credit line increase for account number XXXX YYYY ZZZZ WWWW has been approved.” You won’t even show my full credit card account number on your website when I’m logged in from my laptop—something nobody’s going to get their hands on in the next 10 minutes without breaking down the front door and brandishing a shotgun. But you’ll gladly plaster it all over your paper confirmation letters. Mailboxes are so easy to rob that I just robbed my neighbor’s right now while typing this sentence. Maybe if credit card issuers wouldn’t send out umpteen mailings with full customer account numbers for anyone to see and steal, there wouldn’t be so much rampant theft and fraud and pain. Just a thought. (Morons.)
  • Two separate letters for one request. Twice. This was the straw that broke my electronic camel’s back. For one credit line increase request, I got two letters: one saying “You’ve been approved for an increase to $10,000,” another saying I’ve been rejected for an increase to $20,000. I had requested the increase to $20,000; but much like a first-grader who can’t combine two thoughts into a compound sentence, Bank of Name Omitted to Protect the Stupid Bank couldn’t combine the good news and the bad news into a single letter. Similarly, another bank decided that it took two letters to confirm my e-mail address change—only the content of both letters was identical. Yay, double the chances for a mailbox thief to steal my account number!

Banks and credit card issuers be warned: If you send me another paper confirmation and I happen to paper cut myself on it, I’m going to sue you soooo much for assault with a deadly weapon. And if you don’t believe me, just check your mailbox for a confirmation letter written in myyyy blooooood.

You know, from the paper cut.

Friday, October 12, 2007

Fight Thieving Restaurant Servers With Checksum Tips

Author: Nick
Category: Money
Topics: , ,

There’s a fascinating yet frightening discussion over at the FatWallet Finance Forums about restaurant servers stealing their way to higher tips on credit card receipts. Servers upset by low tips that they probably deserved have been known to edit the tip line of credit card receipts to bump up their tip. For example:

changing a dollar tip to an 8 dollar tip is easy for crooked waiters

See how easily a measly tip is changed to a generous one by a disgruntled server or bartender?

The easiest way to combat this illegal and downright nasty behavior is to reconcile your receipts against your credit card statements each and every month. You’ll spot restaurant wrongdoing and be able to phone it in to your credit card issuer faster than you can say “there’s a fly in my soup.”

But for the trillions of people who don’t want to go through the trouble of reconciling their receipts each month, there’s an easier way to stop tip alterations just by glancing over your credit card statement each month. It involves using checksums to add a layer of security to your tip amount. The term “checksum” normally refers to a technique used by computer systems to ensure file integrity. Here, we’ll be using checksums to ensure human integrity.

There are many checksum systems you can use when tipping, but here’s a great example that’s easy to learn and can be performed without the aid of a calculator unless you suck at math really badly.

Step 1: Look over your receipt

You’ll get ripped off far more often for food and drink overcharges than you will by spiteful servers. Check each billed item and compare it to the menu price.

Step 2: Calculate the appropriate tip

Tip as you normally do without worrying about checksums for now. For our example, let’s say you had the following bill but service was slow, so you’d like to tip about 10%.

subtotal 47.16 plus tip 4.71 total 51.87

Step 3: Apply a checksum

That $4.71 is just begging to have ten dollars added to it, and $51.87 becomes $61.87 so easily. Foil these alteration efforts with this simple checksum method.

Adjust the amount of the tip so that the numbers in the final total to the left of the decimal point add up to the right-most digit. In this case, the total has a “51” to the left of the decimal point (A). 5 + 1 = 6, so the final digit should be six. Adjust the total to $51.86 or $51.96 (B) by adding nine or subtracting one from the tip (C).

5 plus 1 equals 6, change the total to 51.86, change the tip to 4.70 to match

Step 4: Check your credit card statements each month

While the receipt will help you ensure no fraud was enacted upon your dining bill, you only need the statement to verify the checksum. For this example, simply locate the dining transaction, add the numbers to the left of the decimal point, and confirm that they add up to the right-most digit. If they don’t, you’ve been scammed.

credit card statement showing thieving server has struck your bill

This technique is not foolproof. If the scammy server had added nine dollars to the total—making it $60.86—the checksum calculation would still come back okay. But because it’s harder to turn a “51” into a “60” than a “61,” it’s unlikely your server will do this unless they’re wise to this particular checksum technique.

Step 5: Deal with the theft

If you hit a checksum that fails, dig out your copy of the receipt to confirm it doesn’t match the total on your statement. Next, do three things:

  1. Call your credit card issuer. It should be fairly simple to get a credit for the difference between your actual bill and what you were forced to pay due to this fraud.
  2. Call the police. You were the victim of a crime, so you should report it, even if it’s just a few dollars. If the stealing server has multiple victims who report his or her behavior, the police will likely take action against the server and/or the restaurant. Hopefully a few thieving restaurant workers behind bars will set enough of an example to discourage similar actions in others.
  3. Call the restaurant (optional). At this point, you’ve likely got your money back and given all the information you can to law enforcement. You can try calling the restaurant to report the theft, but it might not do much. In the best case, the manager will recognize the server’s name on your receipt and confirm he or she has been suspected of wrongdoing. Maybe you’ll even get a free meal out of it for your trouble. Worst case, the restaurant does nothing.

The original poster in the FatWallet Finance Forum topic may be onto something when he or she says that this is probably one of the most widespread types of theft that goes unpunished. Now you have the tools to fight it. The next time you’re at a restaurant, eat, drink, be merry, and do a little extra math come tip time to help combat this rapidly growing problem.

UPDATE: Jeff B. put together a nifty Windows Mobile app for tip checksum calculations that’ll help make it easier to compute the proper tip given your level of service and checksumming method. Thanks Jeff!

Thursday, September 27, 2007

The Greatest Credit Cards You’ll Never See

Author: Nick
Category: Money

Sure, Citi might have the best reward cards, and Discover has some great balance transfer offers, but the best credit cards never see the light of day. Here are just a few cards that you won’t soon be swiping at the grocery store but you’ll wish you could.

voosa awesome card

Voosa Awesome Card
This card is designed for all of the awesome people out there, mainly circus acrobats and readers of Punny Money. The Awesome Card features an amazing reward program unlike any card you’ve ever seen. For each dollar you spend using the Voosa Awesome Card, Voosa will donate three cents to the American Society for the Awesomely Challenged. Please do all you can to help those out there who just can’t be as awesome as us by signing up for the Voosa Awesome Card today.

masterbate rewards

MasterBate Rewards
The MasterBate Rewards card makes using credit cards feel good. Not only do you earn a 1% cash rebate on all purchases made with the MasterBate Rewards card, but you’ll also earn 5% cash back on purchases made at sex toy shops, strip clubs, and hookers equipped with credit card sliders in their boobies. So keep your cash at home and put the MasterBate Rewards card in your pants pocket… if there’s any room left in there.

card of darkness

Card of Darkness
This is the perfect credit card for goths, heavy metal fans, and people suffering from depression. The Card of Darkness comes with a zero-dollar credit line which will reinforce your lifestyle of sadness and despair because it’ll be rejected every time you use it. And if you’re tempted to overspend using the Card of Darkness, you won’t need to take a pair of scissors to this card; it comes with the patented Emo-Sense™ Technology that lets this card cut itself!

iranian express

Iranian Express Gold Card
If the Israeli Express card isn’t your cup of tea, then you’ll absolutely love this Gold Card from Iranian Express. Redeem reward points on this card for a variety of merchandise including restaurant gift cards, airline tickets, and nuclear weapons. If you want this card, you better hurry; Iranian Express appears to be the target of a hostile takeover by American Express, and you know how things turned out for Iraqi Express.

Thursday, August 16, 2007

Spending More With Credit Cards Than Cash: It Doesn’t Apply to Everyone

Author: Nick
Category: Money
Topics: ,

It is widely known that people tend to spend more with credit cards than if they use cash. Supposedly this is because you can “feel” cash leaving you.

scientific looking diagram, so it must be trueFrom a scientific perspective, the paper bills passing through your hands release tiny particles found in the ink used to print money. Those particles travel through your bloodstream, sending a signal through your nerves straight to your brain which responds by releasing chemicals that make you feel remorseful (see diagram, top). The plastic of credit cards does not cause the same biochemical reaction, so you don’t get that feeling of regret (see diagram, bottom).

Okay, I just made up all that crap. But it’s still generally true that most people spend anywhere from 10-30% more when using credit than when paying with cash.

But I’m not most people.

As I’ve discovered in the last week, I tend to spend more when using cash than when using credit cards. And I think I know why:

  • Cash tends to come from “nowhere.” I rarely have cash in my possession. If I ever do, it’s not on purpose. Usually it’s a gift or it comes from selling something I don’t need. I view it as extra money, so I’m more inclined to spend it on frivolous things.
  • Cash doesn’t make it to my books. Because of the way cash typically enters my possession, I almost never log it in my personal finance tracking application of choice. And I don’t log receipts for transactions I pay in cash either. Thus there’s no line item in my monthly spending report to make me feel guilty for spending $60 in cash on two hot dogs at a baseball game.
  • I don’t like cash. Cash takes up precious room in my wallet, and it invariably spawns something I hate even more: loose change. The sound of coins clinking in my pocket–ugh, it sends shivers through me. Perhaps I spend cash quicker because my subconscious is working to get rid of it faster. Of course, I could just deposit it in the bank, but going to the bank is another thing I don’t like doing.

So do you fall into the typical behavioral pattern of spending more with credit cards, or do you part with cash easier like I do?