Unauthorized Use of Credit Cards

Recently, while I was checking my credit card information online, I noticed several charges on my statement that I had not authorized.

They were all for Nintendo Games.

Well it does not take a genius to figure out where these stem from.  Who in the house has an addiction to electronics and video games?  Who tends to do things without permission and feels entitled.

My son.  He took my credit card number and entered it into his game system.  He then just had to click buy on credit card for all purchases.  The purchases were done under his name.

This brought me to wondering.  Of course my son is responsible for his actions.  He should not have used my credit card without my knowledge or permission.  I can't take the purchase away because the "game points" are already spent.  I could take away the system, but rather it broke on warranty and I told him I would not be taking care of having it fixed as a punishment.  I will also have his social worker and the school police officer speak to him about credit card fraud and theft.

But I got to wondering about the merchant responsibilities in all this.  The purchase was being done under my son's name.  The credit card is in my name.  He is not an authorized user on my account.  Sure we have the same last name, but not the same first name.  If my surname was Smith or Jones a lot of people would have the same last name as me, does charging a purchase on a credit card with a different given name make the purchase valid?

Different people have different opinions on this one.  There are those who say the only responsible person is my son (and he definitely holds the largest share of responsibility).  Others say that only my son and I are responsible (me for having my credit card information not locked away but in my wallet, in my purse and leaving my purse unsupervised around my son).  Well lesson learned, I will definitely be more careful from now on.  It's definitely a sad state of affairs when I have to lock away my purse in my own home.

Few said that the merchant had some share of responsibility.  I think the merchant is also partially responsible for accepting a credit card in the name of a person different from the purchaser without ensuring that the person who owns the credit card had provided authorization.  They also allowed a 13 year old to make a purchase.  Most did not agree that the merchant had any responsibility so I looked it up.  I found the following website: http://www.infomerchant.net/creditcardprocessing/index.html

On it it says:

Fraud: The

Best Way

to Avoid Chargebacks

Preventing credit card losses is not only good for you, but it is also part of your responsibility. Here are some general guidelines on how to prevent fraud and avoid chargeback situations.

• Make sure that the credit card is from the legitimate cardholder . . . Not just someone who knows the card number, or has stolen the actual card.

• Verify signatures (for face-to-face transactions) on the card and on the receipt signed by the customer.

• Take special care with non-magnetic transactions like telephone orders, mail orders or Internet orders.

• Know your cardholder personally … if at all possible.

• If applicable, use the Address Verification System and verify the Security Codes (also known as "Validation Codes") on the card (This prevents many pass-through fees).

• Obtain a signed receipt from the cardholder and, if applicable, a signed proof of delivery from the shipper for delivered goods.

• Protect your merchant ID and terminal ID so no one submits transactions without your permission.

• Don't accept expired cards (or accept cards before the effective date!). The date shown on the card is the "good thru" date and is good through the last day of that month.

The Mastercard website also advises merchants to ensure the purchaser is the cardholder.

http://www.mastercard.com/ca/merchant/en/security/what_can_do/getting_started.html


Also, the credit card company did a no-no, they accepted a charge with the wrong expiry date.  I had (just before the charges started appearing) activated a new card with a different expiry date.  My son admitted he had taken my card information before the holidays, therefore before the updated expiry.

So even though my son did do wrong by using my credit card, this could have been stopped at the merchant level, and failing that at the credit card company level. Furthermore, I had put an online "PIN" on my card to prevent unauthorized use, which was not used, this would also have prevented my son from being able to actually make the purchases. I am disputing the charges.  I had put safety measures in place that were not used and I feel the merchant DID NOT fulfill their responsibility by making sure I was indeed authorizing.  I did call the merchant to file a complaint for allowing the purchase.  They were quite cavalier about it and tried saying I was responsible for the purchase if I knew the person having made the purchase.  I know my neighbour's kid, if he used my card would that make it legal and valid?  NO.  It being my son changes nothing.

Well thanks for reading!