675k Stolen Credit Cards = Ten Years In Jail

wiredmikey writes "A hacker who had been found with more than 675,000 stolen credit card numbers that reportedly led to losses totaling more than $36 million, was sentenced on Friday to 120 months in prison. After pleading guilty on April 21, 2011, Rogelio Hackett Jr., 25, of Lithonia, Georgia, was slapped with a maximum prison sentence and ordered to pay a $100,000 fine. According to court documents, U.S. Secret Service special agents executing a search warrant in 2009 at Hackett's home found more than 675,000 stolen credit card numbers and related information in his computers and email accounts. Hackett admitted in a court filing that since at least 2002, he has been trafficking in credit card information he obtained either by hacking into business computer networks and downloading credit card databases, or purchasing the information from others using the Internet through various carding forums."

Comments

Sounds about right.

[Kenja]

Is this suposed to be controversial or something? Seems a reasonable sentence for the crime, neither inflated or too short.

Re:Sounds about right.

[Oxford_Comma_Lover]

That's up to 675,000 people he's hurt, so he gets less than two years per hundred thousand people.

On the one hand, that seems really freaking low. On the other, more time won't necessarily help anyone--it won't make him less likely to commit crimes in the future, and the deterrent effect probably isn't great.

Also, there were people at Nuremberg who got ten years, so going much higher than that would be comparatively high by that standard.

Re:Sounds about right.

[Sir_Sri]

ya, I mean one can quibble over the exactly extent of the sentence or whatever, but that belongs on a law site. Steal credit card info, get caught, get convicted, get punished. Sounds about right.

It's not exactly clear if they mean he gained 36 million from this, or if that's just the value of the fraud on the cards. I remember here in canada we had a similar story years ago, and there are various levels of intermediaries. The hacker gets paid to get the card info, they sell it to a clearing house who resells it piecewise to people who might actually exploit it. There were a few steps in between too that I don't remember. But that doesn't mean he wasn't both getting the info and using it himself, though I don't suppose it matters much.

Re:Sounds about right.

[Alien Being]

No fucking way. I'd say he deserves at least two years per $1M. Just kill him now.

Re:Sounds about right.

[sjames]

More properly, he hurt a few banks which insist on a system with virtually no security whatsoever. They then passed the hurt on to up to 675,000 people rather than fixing the problem.

That certainly doesn't make him less guilty, it just makes him the only one who's going to pay for it.

Re:Sounds about right.

[veganboyjosh]

Not been the victim of id theft/fraud much?

Re:Sounds about right.

[erroneus]

You are not paying attention to who is victimizing who. You do not control information about you and you cannot control information about you. Information about you is traded and shared commercially all over the world. Our credit systems rely on the belief that information about you is a secret. Do you see a problem with this yet?

Okay, so now, when people come to you to pay bills you don't owe, it is the SYSTEM that is victimizing you, not the fraudsters who took advantage of a horrible system.

Re:Sounds about right.

[Anonymous Coward]

No fucking way. I'd say he deserves at least two years per $1M. Just kill him now.

You're likely a troll, but I'll bite anyway:

Really? This guy is playing the same game called Capitalism that everyone else is playing. Megacorporations, oil companies, banks, etc., get away with theft (and much worse) on scales that are orders of magnitude greater, affecting much more people and in more extreme ways.

They'll never spend a day in any kind of prison. With that in perspective, the sentence this guy is getting is unjustly harsh.

Re:Sounds about right.

[wickerprints]

This is wrong. It actually not only hurts those who had their card data stolen, but it also hurts everyone who has a credit card, or who needs to secure a line of credit, because the cost to insure against losses due to fraud are eventually passed on to the borrower in the form of higher interest rates, higher fees, or more restrictive lending practices. That money isn't just eaten by the companies--you would be delusional to think that for one second.

The sentence is too light, not in terms of the jail term, but the fine. The only real meaningful form of punishment these days is not locking someone up physically, but financially. Turn him into an indentured servant, work him to the bone, and let him die penniless and in squalor. That would be justice.

Re:Sounds about right.

[Opportunist]

You're right. Let's round up the CEOs.

Re:Sounds about right.

[erroneus]

People who need credit cards aren't managing their money well enough. With few exceptions, I have been off of the credit system for more than a decade now and have lived quite well. Instead of lines of credit, I have money in the bank. And I don't buy stupid stuff like I used to. Turns out, when it's "your money" you think a little more about how you spend it.

I'll go ahead and reveal myself as a Dave Ramsey fan... an atheist Dave Ramsey fan... weird right? A credit score truly is an "I love debt" score. Ramsey is a multi-millionaire and has a terrible credit score. Why? Because he doesn't participate in the system, not because he doesn't have money. I probably also have a terrible credit score... similar reasons + an ex-wife who still uses my last name. But I don't have collections at my door either. And yeah, I do have nice things... and two cars completely paid for and there is simply nothing that I "really wish I had."

Re:Sounds about right.

[veganboyjosh]

This may be true, but if my credit info wasn't among the 675,000, then could i really say that this guy was responsible for my plight?

Re:Sounds about right.

[hedwards]

He didn't hurt the banks. The banks will pass the loss on to the clients in the form of higher rates. Which is unfortunate because as long as banks can just buy their way out for cheap they aren't likely to invest in the kinds of security necessary to make things more challenging for crooks.

Re:Sounds about right.

[icebike]

No, nothing about the credit card system relies on the belief that the information about you is a secret.

With all due respect to your anti-credit card mentality, most of us get them for convenience, not to remain anonymous or secretive.
We are not victimized by the people we do business with via our cards. We enter into those agreements with full knowledge
that we expect X amount of money to be charged against our card, and we receive X amount of goods or services. We are all adult enough
to realize there is and audit trail and some other uses (fully explained in the TOS) may be made of the information. We are adult enough to realize
no one will do all of this for free.

I absolutely REFUSE to let you EXCUSE the theft of 675 thousand credit card data and 37 million dollars of fraud based on your silly
objection to the TOS that you knew going in.

The system without the fraudsters does not victimize me.
The fraudsters victimize me.

No amount of windmill tilting on your part can change that.

Re:Sounds about right.

[icebike]

Where did you get the banks involved in this?

He obtained either by hacking into business computer networks and downloading credit card databases. (If you won't read the article at least read the summary).

The banks, while vulnerable enough, are the least of the problem. The corner grocery, the power company, newspaper, ebay, and any other place from which you routinely purchase are the ones with lax security.

And while its fun to rail at banks, remember that the US DOD was hacked by a bunch of kids. The problem of internet security goes much deeper than your hatred of banks.

Re:Sounds about right.

[Anonymous Coward]

This is one of the dumbest posts I've ever read on the internet.

1. You're not some messiah for not having a credit card, contrary to your belief. Your failure to manage your money with a credit card is damning evidence of why nobody should bother listening to you on topics related to money. There is not a dichotomy of "has a credit card and makes stupid purchases" versus "does not have a credit card and makes good purchases". Your inability to separate yourself from those in the first category is your own fault, not the card's fault.
2. I frequently make purchases in the $XXXX range. I'm not carrying around a checkbook or that much cash. In the case of a mugging? I call my CC company, they willingly set up no-expense-paid monitoring on my SSN for a year, and then they send me a new number. In the case of cash/checkbook? I'm royally fucked.
3. I don't know who or what David Ramsey is, nor do I care what some radio financial evangelist thinks. If he is truly a "multi millionaire" like you claim, there's a good reason he doesn't need a credit score - whatever he's buying, he can probably afford. The rest of us? Not so lucky.

Re:Sounds about right.

[Anonymous Coward]

It's not that serious. If you have an issue with cancelling your credit card, informing a few companies of the change, and filling out a short form to recover your money you have bigger issues than this man. People need to relax.

Multiply that by 675000 times. If it takes you 10 minutes on the phone to the credit card company, and 10-20 minutes to each biller (estimated on the low side - chances are you'll probably be on hold for 30 minutes or more). On average say you have a minimum of 2 direct debits (utilities, phone/internet - not counting rent, etc.), that's at least 30 minutes - which 675000 man hours wasted (30 minutes for you, 30 minutes for the person answering a call).

Not to mention all the police and fraud squad involvement.

675000 / 24 / 365 = 77.05 years.

Hey - maybe he shouldn't be put in jail and given a medal, for all the work he's created.

Re:Sounds about right.

[The1stImmortal]

To put it in context, that's 7 minutes, 47.52 seconds in prison per card number, or about 8.8 seconds per dollar in losses.

At that rate it's positively profitable to steal card numbers!

Re:Sounds about right.

[Anonymous Coward]

You think your credit information is useless to someone in eastern europe? How about you give me your information, I go to eastern europe and if I can do damage to your financial stability while over there you don't press any charges for anything i get from you. If I fail I'll pay for my own airfare.

You want to take this challenge or admit that you're a lying sack of shit?

Re:Sounds about right.

[wickerprints]

You clearly don't understand the nature of credit and its importance in American economics.

The implication in your simplistic view of credit is that it is a mechanism by which one borrows what they cannot afford to pay in full immediately. This is only sometimes true. However, in many cases, credit is used as a method of protecting oneself from risk. Only fools and old grandmothers who stash money under their mattresses think that credit is intrinsically bad. If I pay for something with a card, my creditor provides additional protections in case what I bought is not as advertised, or if there is some other dispute with the merchant. If I paid cash, I have no such protection.

Building a positive credit history is also essential for other purposes, such as renting a property, or securing employment in some sectors. Whether you agree with the practice or not, there is an increasing trend toward using credit history as a measure of financial and social responsibility. Lack of such a history is not considered an advantage--quite the opposite. If you are one of the lucky few who can get through life without having to establish your reputation through such means, then that's great, but that doesn't give you the right to be condescending toward the vast, vast majority of individuals who work hard and manage their credit wisely.

Credit is like food. You can use it in moderation. Excessive use may be an indication of addiction. Trying to avoid it is an illness unto itself.

Re:Sounds about right.

[sjames]

Like I said, the banks quickly passed the hurt on.

Re:Sounds about right.

[Gerzel]

Indeed. With the US and other capitalist nations the amount of time served for stealing funds is inversely related to the amount of funds stolen. If you steal enough you are lauded for your performance.

Re:Sounds about right.

[MobileTatsu-NJG]

That's up to 675,000 people he's hurt...

He stole from credit card companies, not individuals. You're not liable for credit card fraud.

Re:Sounds about right.

[Antique Geekmeister]

Put him in a cell with someone whose old parents couldn't pay their heating bills because his abuse stripped their credit cards. And hope that someone likes boys with pretty mouths.

Re:Sounds about right.

[MobileTatsu-NJG]

The banks will pass the loss on to the clients in the form of higher rates.

Nope. Banks respond to supply and demand, too.

Re:Sounds about right.

[Antique Geekmeister]

Please excude my crudity: But my (quite old) father had an identity theft problem last year, that made it hard for him to get his heart medications, and I'm still very angry about it. The confusion and delays could have been fatal.

Re:Sounds about right.

[sjames]

We have known for 3 decades how to create a card (either cash or credit) where simply knowing the number and name on it is absolutely useless, but the banks refuse to implement them. As long as they insist of a screwed up system where the number is both ID and authentication, this will remain a problem. For example, a smart card can cryptographically sign a plaintext transaction handed to it by a POS terminal. At that point, it hardly matters if it is broadcast to the world.

The merchants are stuck working with a system that practically demands to be abused because that's all the banks will grant them.

As you pointed out, the DOD has been hacked by a bunch of kids, why would you (or the banks) expect better of a corner grocer?

Re:Sounds about right.

[glwtta]

And I don't buy stupid stuff like I used to. Turns out, when it's "your money" you think a little more about how you spend it.

Only if you're an idiot. Why do some people think that just because they can't grasp that credit isn't "free money" - or if it takes them a very long time to get there - then the rest of us must have the same problem, too?

Re:Sounds about right.

[MobileTatsu-NJG]

Your credit will be fucked up by a fraudulent fifty dollar charge?

Re:Sounds about right.

[EdIII]

Actually you are not victimized at all. You are not even party to proceedings for those seeking remediation.

I am assuming of course, that these were just straight purchased with a credit card number and NOT identity fraud in which you are harmed by a lower magic number they come up which causes you pay more interest, the harm part.

Most likely, The TOS that you signed going in, specifically made you *not* the victim. I have had a few charges made that were not me at all. Other than placing a phone call and spending 10 minutes of my time, I was not financially harmed, nor was my credit harmed at all. In fact, I have been called several times in the past on my credit card when they thought my purchase spending pattern was abnormal.

The victim here are the credit card companies themselves. The merchant still gets paid from what I understand, and the credit card company has to eat it. Hence, they are the victims, not you.

Indirectly, the credit card companies may be compensating for their losses by increasing your fees and raising interest rates.... but we should be honest here.... they are going to do that anyways. Corporate culture in our recent times has demanded ever increasing growth in revenues, wherever you can find it. Fraud aside, I cannot possibly see how credit card companies were going to squeeze anything *less* out of you.

In a way, the credit card systems are victimizing you. It's just a point of view really and depends on your relationship with them. If you pay off your purchases at the end of the month, and have a low interest rate card it can be a good deal. However, there are some cases in which I can see it as predatory and their behavior as inexcusable.

Once again, that is up for debate. However, the fraudsters cause harm to the system, not you directly. Indirectly is really up for debate in my mind as well.

On another topic, I watched a documentary once about prison and specifically the time. This person did not assault you leaving you handicapped for the rest of your life. Did he kill you? Somebody you love? Torture? Rape?

10 years is a long damn time in prison. There are child molesters who get less. He committed fraud, not raped a 11 year old boy. Our perception of time can be weird. Try imaging everything that has happened to you in the last 10 years. Quite a bit eh?

The sentence is overboard, you are not the victim even if he did steal your card info, and some insurance premiums got adjusted. That's what happened here.

I think 3 years would have been more appropriate and you would be surprised by just how long that really is..... for a non-violent crime.

Re:Sounds about right.

[icebike]

The majority of credit cards stolen are not from terminal swipes, but rather on-line purchases, especially repetitive on-line purchases
such as routine bill payment where the merchant needs to retain the card info for subsequent billings. (Gas, electricity, news paper, web purchases, etc).

Cartographic signing at a pos terminal is not an option. Further POS sales generally go directly to the payments processor and never even need stop at the mom-and-pop grocer.

The number is not both ID and authentication. (As I suspect you well know).
In addition you need a couple other data elements.
The unfortunate thing is these are all on the card itself.

But this theft did not involve the card itself. It involved data files from corporate computers.
Short of a merchant specific CC numbers, (which are available from some credit card companies) there is no way
to allow repetitive payments without retention of card data by the merchant.

This system evolved. It was never designed with the availability of all the protections you imagine.
There are literally millions of POS terminals in any given state, and probably billions world wide. Its nice to imagine them all being updated to the latest technology over night, but even if you could bear the cost of doing so you are still left with a mix of old and new for 10 or 20 years.

People (probably you) rail against NFC which has the real potential to solve the POS problem.
But nobody has wet solved the Credit Card on File problem that ever on-line-retailer has to deal with.

Re:Sounds about right.

[icebike]

The victim here are the credit card companies themselves. The merchant still gets paid from what I understand, and the credit card company has to eat it. Hence, they are the victims, not you.

Are you Daft?

Credit card companies charge back fraudulent sales to the merchant. They eat little or nothing themselves.
The merchants eat it.

The card holder is still on the hook for $50 or so. More if they delay reporting the loss.
Further, the cost of goods goes up for everyone due to merchants having to eat the loss of the Color TV purchased with a fraudulent card for which they are charged-back.

Re:Sounds about right.

[milkmage]

no people were harmed in this crime.. banks are on the hook for fraudulent charges (for electronic transactions).

http://www.federalreserve.gov/bankinforeg/regecg.htm

Section 205.6 Liability of consumer for unauthorized transfers
Limits a consumer's liability for unauthorized electronic fund transfers, such as those arising from loss or theft of an access device, to $50; if the consumer fails to notify the depository institution in a timely fashion, the amount may be $500 or unlimited.

my bank called me for a suspicious charge for $700. I said I didn't make that purchase, it never even hit my account. All I had to do was sign an affadavit saying it wasn't me.

don't forget, when you use a credit card, you are using the banks money, not yours. they really hate it when people steal from them - that's why they monitor credit accounts for suspicios transactions... MUCH harder to deal with a fraudulent transaction on your ATM card. don't use your ATM to buy anything.

Re:Sounds about right.

[erroneus]

See all of the above for a classic example of defending themselves and the way they operate.

The fact is, using credit cards for personal business is not necessary in most cases. I do have a debit card with credit card links to an account with "as needed" funds in there at any time to limit losses in the event of fraud, but that's as far as I go for the convenience/necessity of that.

Credit cards are a loan. There may or may not be fees associated with what you buy or how you pay, etc, but it invariably depends on the cold holder to constantly and continually maintain whatever ends of the agreement are required to keep things as cheap or as free as possible. And these days banks have been changing terms of service more often than they change their underwear, so you can claim "if I [do whatever] it's free" you might want to keep checking for changes because I guarantee you in your terms of service, you will find a clause in there that says they can change the agreement at any time without notice.

And since I don't take loans out for consumer things, I never have to worry about those things.

As for "...whatever he is buying he can probably afford..." Wow. You just revealed yourself as far dumber than you think I am. Do you really buy things you can't afford??? Holy cow man! You are seriously advocating debt financing of your life and existence? You're a disaster waiting to happen. Get a savings account built up that can sustain you for several months of living at your current comfort level and then see now much you need to debt finance your life. It can take a while to build that savings, but shouldn't take more than two years. And when you have that kind of money in an account, you won't feel the need to borrow money to buy stuff from WalMart any longer.

Re:Sounds about right.

[moortak]

Worse than that, they passed it on to the merchants who passed it on to everyone else regardless of payment method.

Re:Sounds about right.

[mjwx]

If I pay for something with a card, my creditor provides additional protections in case what I bought is not as advertised,

Really, when I use my credit card, my creditor only charges me extra fees.

What protects me from being sold a product that is not as advertised is the Australian consumer protection laws that will, if the product is defective or different to what was advertised from an Australian retailer entitles me to a refund or exchange regardless of how I paid for it as long as I can provide a genuine receipt.

Credit is only useful for an investment that is expected to earn you more money over time. Home and business loans are the best examples as these are for assets which are expected to increase value over time, exceeding the cost of the loan and it's interest.

Only idiots use credit for consumption, as this just increases the cost of whatever you're consuming. This is foolhardy as it decreases the value of whatever you are buying. One should not not to use credit are for things that will only lose value over time, the most obvious examples are car loans and holidays because you're simply taking the capital and adding on additional cost (fee's and interest) and risk with no benefit.

Dont buy into the bollocks that credit is good. Banks say this because credit is profitable. Credit is a risk, when used properly it can be beneficial, when used improperly it will be dangerous.

Re:Sounds about right.

[erroneus]

Oh yes, it most certainly does rely on the notion that your personal information is known only by you. The primary way identity fraud works is by filling out applications using enough of a person's identity information to complete the application and having the cards and other information sent to a location of the perpetrator's choosing. By opening a whole new account, the person who was impersonated will have no knowledge of what had happened until months later leaving the trail to grow colder. If you think it's done more often by people simply stealing the credit card information of a person with an open account, that would be incorrect -- those are the things that get caught and detected within days of occurrence and yields the highest probability of the perp being caught.

And I think you need to read the article. You clearly didn't read it right. He was not responsible for $37 million in fraudulent transactions. He had databases of credit card numbers associated with that much in transactions. He couldn't possibly be responsible for 100% of those transactions the way he was buying and selling that information. It's more likely that he only did a little of it or none at all.

I get the feeling you really don't know how any of this works. You just see 675K card numbers and assume 675k victims. That would not be accurate to assume. When an identity fraudster creates an account using another's ID information, do you think he stops at just one account? More likely dozens of accounts per person are created.

I don't blame you for not understanding. I don't blame you for reading the hype the wrong way. The news loves to throw out the biggest numbers they can imagine to make a story more exciting. Most people simply don't have the capacity to think and understand... and so how could I blame you for not?

I know you won't but I invite you to look over the information you provide to a creditor when you apply for credit. Is any of that a secret? I mean a really deep secret that only you could know? Not a single bit and not even your "Super-Secret-Number" (AKA Social Security Number). And presuming that you never knew that it is new accounts which are opened using this information more often than using existing accounts, how does that make you feel about this system now? There simply isn't security involved in this process at all. Systems that do not require a person to apply in person and to sign things in the presence of another person is 100% insecure and no one ever seems to talk about it.

Re:Sounds about right.

[murdocj]

Or you could pay your credit card bill off in full every month, the way I do, and enjoy the convenience of having a credit card and not having any debt.

Re:Sounds about right.

[erroneus]

Yup. I got off the personal-debt-financing ride, have almost nothing in personal debt and a savings that could sustain my family for quite some time if I lost my income. If that makes me a nutjob, then I guess I'm a nutjob. Are my achievements really that hard to believe? Do you think it's impossible? LOTS of people have done what I have done. Sure, I'm not doing what the "general public" does. But then again, the general public doesn't have much if any savings and lives paycheck-to-paycheck. And when there's a financial crisis, I feel it do, just not in the same way as you... and not quite as much.

Re:Sounds about right.

[mabhatter654]

Now that they have a conviction, they could have each BANK file separate charges. Cards are owned by banks, each separate bank and jurisdiction should be able to charge him separately.. As THEY are the wronged parties with hundreds of cards each. That would add just ONE year per bank... Or potentially 100's of CONSECUTIVE 1-2 year terms on top of the ten.

Frankly, it's time for the law to "step aside" in these cases intil people learn not to do this. O think it's time to bring back public corporal punishment... Travel to each city, break out the cat-'o-nine-tails and just do the rounds till he gets all 675k lashes in!!! Somebody want to run the numbers to see if it's even possible to take that many lashes in ten years... It's not like we're giving him death or anything... That'd be cruel! It takes way less than 30 minutes in a phone tree each of the victims will have to endure.

Re:Sounds about right.

[aXis100]

I agree with most of what you said, except for the "vast majority managing their credit wisely" part - the US economy wouldnt have tanked so bad if that were true. Across the world per capita debt is rising to unsustainable levels.

I think people who live in the black, and use credit cards only for convenience are a real minority.

Re:Sounds about right.

[morkk]

You can guess what happened next

You walked back across the road, waved the wad of cash and said "Look! Credit history! Now approve my loan, bitches!"?

Re:Sounds about right.

[izomiac]

($36,000,000 - $100,000) / 10 years = $3.59 Million per year
$3,590,000 / (365.25 * 24) = $409 per hour

So, how many people would like a job that paid $409/hour and got paid up-front? Now, surely any ill-gained assets were seized, but still, the probability of being caught is low enough for this to make perfect economic sense.

Re:Sounds about right.

[sjames]

The majority of credit cards stolen are not from terminal swipes, but rather on-line purchases, especially repetitive on-line purchases such as routine bill payment where the merchant needs to retain the card info for subsequent billings. (Gas, electricity, news paper, web purchases, etc).

So what you're saying is people need to be able to sign text based transaction records through their browser and need to be able to sign standing transaction orders (that specify a max amount, to what account, and how often). All ancient news, all easily done.

Cartographic signing at a pos terminal is not an option. Further POS sales generally go directly to the payments processor and never even need stop at the mom-and-pop grocer.

So the problem is lax security at the mom'n'pop (your claim) but the card data need never stop there so it's not a problem (also your claim)? HUH? I'm sorry but you'll either have to pick one or show me how Schrodinger got involved.

Short of a merchant specific CC numbers, (which are available from some credit card companies) there is no way to allow repetitive payments without retention of card data by the merchant.

Or, as I said, signed standing transaction approvals (presumably revocable).

This system evolved. It was never designed with the availability of all the protections you imagine.

The problem is, it STOPPED evolving rather than incorporating those protections as they became practical. If the terminals can adapt to near field touch pads, they can adapt to this just as easily and gain ACTUAL security, not just for the consumer, but also for the merchant. Or do you know of some way that NFC upgrades happen by magic on that very same billions of POS terminals you were sure were impossible to upgrade right up until you remembered they already ARE being upgraded?

Every time you see yet another ad for "identity theft" prevention, protect your credit score and blah blah, blah, remember that they're really talking about fraud against banks that have been pushed off and made into problems for innocent 3rd parties.

Re:Sounds about right.

[The Dawn Of Time]

If you are one of the lucky few who can get through life without having to establish your reputation through such means, then that's great, but that doesn't give you the right to be condescending toward the vast, vast majority of individuals who work hard and manage their credit wisely.

I'm mostly with you aside from the part I quoted - doing something better than the vast, vast majority actually DOES give one the right to be condescending. You just don't like it, but that's irrelevant. You have no right to a world you like.

Re:Sounds about right.

[evilviper]

If I pay for something with a card, my creditor provides additional protections in case what I bought is not as advertised, or if there is some other dispute with the merchant. If I paid cash, I have no such protection.

This has NOTHING to do with "credit" and everything to do with "electronic transactions" plus a little legislation. In short, you can get ALL those benefits with a DEBIT card, without utilizing credit.

Building a positive credit history is also essential for other purposes, such as renting a property, or securing employment in some sectors.

I've been a renter for many years. I have never had my application rejected, or been asked to get a co-signer nor additional deposit, even when dealing with several large commercial rental companies. And yes, I have dually confirmed I have never had any credit history at all. The 3 reporting agencies sent me nice form-letters telling me I do not exist.

Lack of credit history becomes a small hassle when establishing service with a new utility company. They may want additional records to prove your identity, or a modest deposit.

The one and only place I'm concerned about my lack of credit is in home-loans. My solution to that works out well for me (live cheap for a few years, then find a great deal on a dirt-cheap home where the banks will only accept cash offers, anyhow), but I can understand the dilemma of others who aren't in such a situation.

In those cases alternative credit can be established from your history of routinely paying utility bills on-time, providing a larger down-payment, etc.

But back to the OP, it is certainly and undeniably true that the way to get an ideal credit score is to "love debt". Paying a couple credit cards on-time, and keeping no balance on them will NOT give you a very good credit score. Keeping a balance on a LARGE number of credit cards, for years, is the way to get the most-desirable score, which is undeniably a piss-poor system, designed to encourage people who "love debt" to take more and more of it.

Re:Sounds about right.

[Your.Master]

The credit card companies are actually giving me money.

I get 1% cashback on my purchases, have to pay $25 / year for the credit card, but I put recurring bills totallying well over $2500 per month on the credit card, so the $25 is paid easily. I pay everything within the grace period.

After that, there's the subtle time-value effect. Essentially the billing cycle plus grace period provide me with what is essentially extra wealth to invest. It's a trivial trickle amount and not worth a lot of hassle or anything, but being able to make big ticket purchases by credit card and then move the money around in the bank all at once at one time in the month is hassle removed.

If you can't afford a credit card, don't get a credit card. If you can afford to pay it off in full every month, you're foolish not to (unless the terms are far worse than the ones I have). Yes, you could lose your job -- but if you can afford a credit card you can afford to have savings greater than the credit limit to instantly eliminate the credit card debt when the need arises. If you lack the self-control to not overspend on a credit card but somehow have the self-control to not get a credit card, then, yeah, don't get one -- but I just can't comprehend that sort of lack of self-control.

Re:Sounds about right.

[sg_oneill]

Fun fact. The elderly pensioner who lived next door to me is now homeless after being credit card frauded over the internet. He was an old , not particularly literate, old man.

The company who got broken into didn't do this to him , the thief did.

Stick all the abstractions you like up your own arse and light it on fire for all I can care. The buck stops at a respectable but aged 70 year old man who last I checked is living in a squat with junkies because some punk thought it would be clever to empty his meagre pension and thus make him unable to pay his boarding house rent. Thats the bottom line.

Re:Sounds about right.

[loimprevisto]

...yes I am a messiah like it or lump it...

I do not think that word means what you think it means.

Re:Sounds about right.

[ToasterMonkey]

More properly, he hurt a few banks which insist on a system with virtually no security whatsoever. They then passed the hurt on to up to 675,000 people rather than fixing the problem.

That certainly doesn't make him less guilty, it just makes him the only one who's going to pay for it.

I don't think enough people fully appreciate both sides of the security/convenience scale on this one.
They need to keep credit cards about as easy to use as cash.

The banks are not ignorant of the risks. If you don't like it use cash and throw away your debit cards for credit cards & ATM cards. Or walk into your bank, make cash withdrawals and go that route. Hell, just keep cash under your mattress if you really hate the economy.

Re:Sounds about right.

[IICV]

Ramsey is a multi-millionaire and has a terrible credit score. Why? Because he doesn't participate in the system, not because he doesn't have money.

Well yes, that's true to a point - he does have a terrible credit score, in part because he doesn't participate in the system. However, non-participation won't get you a "terrible" credit score, just a bad one.

Want to know what will get you a terrible credit score? Something like this:

One of Ramsey's largest creditors was sold to a larger bank, which began to take a harder look at Ramsey's borrowing habits. The bank demanded he pay $1.2 million worth of short-term notes within 90 days, forcing him to file for bankruptcy relief.

So yeah. He abused the credit system and got burned, and now people are less willing to give him credit. Who'da thunk it.

Re:Sounds about right.

[sjames]

That doesn't exactly put me in the clear. I am still subject to "identity theft". That is, a bank allows itself to be defrauded of a fair bit of credit and comes after me for it without a single shred of proof that I agreed to anything. Because of their contract terms with retailers, I still get to subsidize the percentage they take for credit transactions even when I pay cash (they forbid the merchant from passing the credit transaction cost to the patron, so they have to hike the price for everyone to cover it).

I also get to pay more because the banks charge the fraudulent transactions back to the merchant who then has to raise prices for everyone to cover the excess breakage. It's not like I get to opt out of that surcharge by paying cash. If the bank had to eat the damage and pass the costs ONLY to people who opt to use the credit card, that would be fine, but it would look a bit less like credit cards are as good as cash then. It's a classic case of privatized profits coupled with socialized losses.

Further, there is nothing less convenient about having a smart card sign the transaction. To the customer, it would look a lot like using an ATM or credit card at a gas pump. It could even be managed by a near field tap the pad with your card system.

A more security conscious user might set the card to mandatory pin entry using a device in their wallet. In the near future, they would just load the "card" into their phone and enter the PIN before tapping the pad with their phone.

Re:Sounds about right.

[coaxial]

That's up to 675,000 people he's hurt,

No. That's up to all of us.

Re:Sounds about right.

[DrXym]

It's not that serious. If you have an issue with cancelling your credit card, informing a few companies of the change, and filling out a short form to recover your money you have bigger issues than this man. People need to relax.

All of which is a huge inconvenience and stress to the individual and adds to the bottom line costs of the banks and card processors. Times 675,000. Ten years (really 5 or 6 with good behaviour) really is too short for such serious fraud, and likely organised criminal activity.

Re:Sounds about right.

[HeadlessNotAHorseman]

A credit card is a tool like anything else. Used well, it can improve your financial position. I use a credit card for all of my day-to-day purchases, but I don't spend more than I can afford. Then on a weekly or fortnightly basis I pay off what I owe.

This allows me to keep my money earning interest in a savings account for the maximum amount of time, instead of leaving it to sit idle in a day-to-day use account just in case I will need it.

My credit card has no annual fee, and an interest-free period. I don't know what the interest rate is, because I've always paid off before the interest-free period ends.

Re:Sounds about right.

[erroneus]

"The banks are going to insist that..."

That seriously makes a great point. At some level, everyone knows how beholden we are to "the banks." They run the show don't they? Even if you operate in the black at all times, you still need the banks' blessing to get by.

There is ample proof out there that it is possible to go through life with little to no debt. It doesn't make sense to me why anyone would volunteer themselves to sustain the wealth and power of the banks which already run our lives in exchange for what? Convenience? Positive/negative feedback through scoring how well you remain in debt? With knowledge of an alternative [odd that not borrowing money might be considered an alternative] it just makes me wonder.

Let's put this another way -- this path that the masses have been corralled through has lead to much in the way of over-priced things in exactly the same way healthcare and insurance have made their upward spiral. This credit mentality is why places like Aaron's stay in business.

The banks are empowered by their patrons in the same way the RIAA, MPAA and BSA are. We are quick to denounce the activities of the R*M*B* and to boycott the likes of Sony here but manage to look away while the banks do much the same thing.

Re:Sounds about right.

[dugeen]

Someone who openly fantasises about people being raped in prison is an unsuitable person to pass judgement on a credit card fraudster. You and he are both on the same level of degeneracy.

Re:Sounds about right.

[erroneus]

Credit is not food. Credit is drugs. Use drugs in moderation. Excessive use may be an indication of addiction. No need to repeat the last statement.

One does not have to prove one is worthy of being given food by borrowing increasing amounts of food only to return it later.

That is the simplicity of this game. People spend money and then they pay it back.. eventually, maybe, at some point in time. Even if EVERYONE pays their debts without exception, why doesn't it simply make more sense to save first, spend later to skip this middle-man which rewards his users with an approval score of worthiness? I have never paid interest on my savings.

And this bleed over of the credit system into other aspects of life was predicted when this system was being assembled and was fought tooth and nail. Thanks to the credit system as it is now, when people lose their jobs through no fault of their own (as we have seen lately) and have been relying on being spoonfed a diet of credit, there is no place but disaster for those people to go. Worse, it now interferes with their ability to recover through employment, eligibility for housing or other essentials for survival. So even people who play the game properly and by the rules of best practice make themselves needlessly vulnerable to this system.

(I just love the responses from those who say "I always pay the balance" etc, etc. Really? You have never found yourself in a difficult situation? And you can never imagine that happening in the future? It is precisely because I have found myself in difficult situations after living under "best practices managing credit" that I realized I was paying someone else to use my own money.)

It is very possible to continue to enjoy the electronic freedoms everyone else has. Keep your money in the bank. Use debit cards instead of credit cards. Maintain a safe-gambler's amount of money in the account associated with the debit card. (Safe-gamblers never bet more money than they can afford to lose.) Save first, spend later. Why is "spend now, pay later" better?

Re:Sounds about right.

[erroneus]

That presumes disaster will never hit your life. You know? When the financial crisis began to become public news (it started way before it hit the news you know) it started to affect people like you pretty early in the game -- people who once paid their bills found themselves unemployed an unable to sustain themselves on debt financing. I was also affected by the financial crisis as I eventually found myself without a job, but at that time, I had a larger savings than I ever had before in my life and because of it, I survived nicely until I could find work again -- unemployment helped, but do the math -- unemployment is worthless unless you live in a low-rent neighborhood in an area with a low cost of living. (In fact, I was even able to pay for my relocation expenses when I accepted a job in another state.)

Think of it like this:

In debt financing, you dig a hole, then fill it up again hoping to get back to zero.

In savings, you build a pile and try never to reach zero.

Zero is nothing. In your way, you aspire for zero and in mine, I seek to avoid it.

Re:Sounds about right.

[N1AK]

So your point is that because you have sufficient assets and low enough demands to be able to afford what you want without long/short term credit, anyone who doesn't fit that model isn't managing their money well? That sounds pretty self-absorbed to me.

The only credit I have ever had is a student loan (in the UK where they're basically a no brainer due to interest rate) and now have a 50% mortgage which I'll have paid off by 30. I don't need credit at the moment, but I'm not naive enough to think that means anyone who uses it it isn't managing their money. If my car was to die tomorrow I'd take a short-term loan to buy a new one. I don't have to, but I don't have the ~£10k I'd want to spend available in cash reserves as I used most of it on the house. I could try and get by without a car, buy a cheaper car I don't want or hire, but I don't believe they are the better option. I could have continued to rent, rather than buy, to ensure I had sufficient cash reserves, but then I'd be paying more in rent to avoid a more cost effective solution based on using credit to cover a risk.

Yes, lots of people live beyond their means and use credit to do it. Plenty of people use credit responsibly, in exactly the same way that many companies do.

Re:Sounds about right.

[murdocj]

No, it assumes that I actually have money in the bank and that the stuff that I buy with my credit card I have money to pay for. If I become unemployed, I pay off the credit card with the cash I have in the bank. I'm not running up credit, hoping that my next paycheck will come in and I'll pay it off that way. Yes, if you are using CC to spend money you don't have, then I agree, you are digging a hole. I am not.

Re:Sounds about right.

[hairyfeet]

Ya know I think the sentence would be fair if he did the right kind of time instead of just sitting in a cell for his time. Here in AR we have what is called "The Hoe Squad" where they drag your ass out of bed at dawn and you work your damned ass off until sundown in the fields earning your keep.

I've seen video footage on one of those "world's wildest" where a guy drove a car that was on fire with a wheel gone flying low, nearly flipping who knows how many times, just so he could cross the TN border to keep from going back to the hoe squad.

So he caused 675,000 people to have to deal with the royal bitch that is trying to get your credit straightened out from the big three, which anyone who has had to deal with ID theft knows what a nightmare dealing with those bunches is, well his 7 years before parole served on the hoe squad sounds fair to me. If we did the same to those malware writers maybe they'd think twice instead of using it as a stepping stone to get a cushy job for a security firm after their slap on the wrist.

Re:Sounds about right.

[tehcyder]

...yes I am a messiah like it or lump it...

I do not think that word means what you think it means.

He's not the Messiah, he's a very naughty boy.

Re:Sounds about right.

[tehcyder]

The only credit I have ever had is a student loan (in the UK where they're basically a no brainer due to interest rate) and now have a 50% mortgage which I'll have paid off by 30.

In other words, you were very well off to start with (as you could afford a 50% deposit on a house) and you are now earning a lot of money so you can pay your mortgage off quickly.

Well done, we're impressed by how much money you have. Why don't you just tell us your annual salary and penis size and have done with it?

Re:Sounds about right.

[pnutjam]

You get 1% back, meanwhile you are contributing to a 3% (minimum) inflation of cost. Every business must charge more to process credit cards.

There is growing back lash against this, look at the recent debit card legislation. people prefer fees to be upfront so they can compare, not hidden as intra-company pseudo tax.

Re:Sounds about right.

[bill_mcgonigle]

But this theft did not involve the card itself. It involved data files from corporate computers.
Short of a merchant specific CC numbers, (which are available from some credit card companies) there is no way to allow repetitive payments without retention of card data by the merchant.

Not just repetitive payments, but refund processing as well. There is some hope - some payment processors are handling the online payments directly and giving the merchants API's to do some secure payments. Look up 'tokenization'.

Re:Sounds about right.

[AvitarX]

Investing in security will lead to increased rates too.

The bank with the least expensive methods (pay after the fact vs invest up front) will have lower rates and more customers.

It's in both consumers, and banks best interests for the banks to keep things inexpensive. And why aren't the banks charging the maximum they can anyway? Wouldn't they be better off charging the higher rates the whole time? or is there actually competitive pressure keeping rates down?

Re:Sounds about right.

[Runaway1956]

This does hurt those 675,000 people, PLUS it hurts tens of thousand, possibly even millions, of investors in those businesses that are affected.

Theft is theft. It hurts SOMEONE. And, unlike all the talk about IP theft, this is theft of tangible goods, ie, hard currency.

Re:Sounds about right.

[Runaway1956]

I agree with you, at least 80% - maybe even a bit more. I can't remember the last time anyone even ATTEMPTED to ascertain that I actually had a right to use a credit card. I've let the wife use mine, and I've used hers. No one asks. The card has a woman's name of it, and I'm obviously male - but no one bats an eye.

Yes, the vendors are as guilty as anyone, for making no attempt to check the identity of the card user.

Re:Sounds about right.

[black soap]

Banks are on the hook.... So the bank losing money doesn't affect anyone? Which banks do you use that give away free money because they have an unlimited supply and altruistic owners?

Re:Sounds about right.

[black soap]

675,000 people taking 10 minutes to call their card company works out to over 100,000 hours of lost productivity. So, not as much as a mini-game on Google, but I'd still say that adversely impacted the economy.

Re:Sounds about right.

[Oligonicella]

Never the actual perp, the bad guy making the choice to take something not his. Never him.

Re:Sounds about right.

[Jarik_Tentsu]

Or they just claim it from their insurance companies?

Re:Sounds about right.

[Oligonicella]

"Nice story, but some could easily spin it as his failure to keep up with and understand how things work."

Not with a functioning moral compass.

Re:Sounds about right.

[Oligonicella]

Not really complicit, that implies intent. The word you want is culpable.

Re:Sounds about right.

[mjwx]

I get 1% cashback on my purchases, have to pay $25 / year for the credit card, but I put recurring bills totallying well over $2500 per month on the credit card,

Each CC transaciton attracts a higher fee paid by the merchant (that's who you're paying) to be paid to the bank. This can be as high as 3%. The cost of this is passed back on to you, the customer in the form of higher prices. The net effect is to increase the cost of whatever you're trying to purchase without increasing revenue to the company you're purchasing from.

Please dont tell me that you're naive enough to think the bank was giving you free money, they paid you back out of the % the bank got from the merchant.

Paying by direct debit or bank transfer does not attract such high fees.

but I just can't comprehend that sort of lack of self-control.

Oh, so that's why credit card debt is spiralling out of control.

Credit has its uses, as I said for investments that are expected to grow over time, but it's positively idiotic to use credit for consumption.

Also, if you must know, I have a credit card and a gold debit card with banks in Oz. The CC is basically collecting dust as the gold card has far lower fees and charges. I've used in once in the last year to buy flights.

Re:Sounds about right.

[Oligonicella]

Even if not, you still lose a chunk of life having to replace what should be a perfectly fine and functioning card. Maybe the rest, to be sure.

Re:Sounds about right.

[julesh]

Not been the victim of id theft/fraud much?

Yes. I complained to my bank that there were unauthorised transactions on my account, and they reversed them.

Oh, wait, you're probably American. You guys get screwed every time. Sorry.

Re:Sounds about right.

[Oligonicella]

One made an admittedly disgusting wish on a crude techno board, the other actually stole from a large number of people and corporations. I disagree.

Re:Sounds about right.

[MobileTatsu-NJG]

True, but even then we don't know how many people found out on their own before the companies got wise and corrected it automatically.

The damage estimates people here have made are comically exaggerated.

Re:Sounds about right.

[petermgreen]

and where do you think the "recovered" money comes from? afaict it is generally from the retailers who were deceived into accepting the fraudulant payments. To cover those costs retailers have to raise their prices and possiblly even get out of certain lines of buisness altogether or implement onerous restrictions on their legitimate customers (why do you think it's often a PITA to get stuff delivered to anywhere other than your main residence where your card is registered? because there is less risk for the merchant that way").

Re:Sounds about right.

[erroneus]

And yet, we hear that argument at every turn. When people get hacked for not being secure enough, we are always quick to blame people for being stupid, ignorant or both. How is this different? He's older and retired and not expected to know anything.

The cost of participating in today's consumerism means lots of vulnerability and even today, most people are unaware of it. I suspect there is a lot more to this retiree's tragic story than an anonymous party draining the funds from his accounts.

As far as being credit-card frauded, in most cases, only a claim needs to be filed and the money returned. I can't imagine what other details in the case could have inhibited from being successful in the claims matter... unless he was simply fooled by someone else in which case, it wouldn't be ID theft, but something else -- a transaction he authorized I am guessing.

Re:Sounds about right.

[petermgreen]

The merchants share a bit of the responsibility, they should probablly be paying more attention to security but there is only so much they can reasonablly do within the bounds of a broken system where code numbers with the power to drain your account are submitted from insecure terminals* over a poorly secured** network connnection (or worse submitted by phone over a completely unecrypted phone line to whatever memeber of staff happens to answer).

IMO where real attention is needed is the credit card companies to replace the fundamentally broken system with something better. Sadly because afaict the credit card companies have pushed the cost off onto the merchants who end up accepting stolen codes there is little incentive for the banks to do that.

As for the criminals themselves they should of course be punished. Other peoples negligence does not absolve them of the crime.

* AKA normal desktop PCs
** The CA system used by browsers to avoid MITM attacks is fundamentally only as secure as the least secure CA

Re:Sounds about right.

[milkmage]

did I say it was victimless? no. I said 675k INDIVIDUALS were not hurt.

banks that I use?.. how about the one I work for?

banks have a line item on their P&L for all kinds of fraud. roughtly a quarter million of our account numbers were stolen on the TJMaxx incident a few years back. TJMaxx provided a list of those accounts to us and the FBI so they could be watched. if a transactions passes the fraud detection and a fraudulent charge is approved, we write it off.. just like a bad loan, or a bank robbery. cost of doing business - EVERY SINGLE credit transaction is a calculated risk. We anticipate XX number will be lost every year. it's accounted for.

believe it or not, fraud due to massive CC breaches is MUCH less than personal fraud (like the roomate/(ex)spouse stealing money because of simple passwords and the like). we take bigger losses due to lost/stolen wallets and purses than these uber breaches. (because fraudulent use of plastic at a point of sale is much harder to guard against than an online transaction using the account number)

don't forget the bank stands between the customer and the vendor for an online CC transation. We have the ability to "authorize" a charge so you get your amazon confirmation number, but secretly tell the vendor to not send the goods until we hear back from the customer (to approve the activity).

if the banks thought it was that big a deal, they'd simply CANCEL all cards processed by the TJMaxx card processor in the timeframe in question. instead those cards are flagged and montiored heavily.. why? because it's worth the cost of a few fraudulent charges to leave all the cards active and let the bad guys poke away... because they'll leave a few bread crumbs.

banks are hardly altruistic, but they excel at protecting THEIR money.

do this. go buy something online, then immediately report your card stolen. you will not get your order.. you will likely get a phone call from your bank asking you to authorize that charge in person.. or an email from the vendor telling you something went wrong.

it's not FREE money- you didn't actually get charged, the bank didn't send money to the vendor and the vendor didn't send the goods. where's the the victim?

Re:Sounds about right.

[kevinNCSU]

People who need credit cards aren't managing their money well enough......instead of lines of credit, I have money in the bank. And I don't buy stupid stuff like I used to. Turns out, when it's "your money" you think a little more about how you spend it.

What you mean here, is people who don't use credit cards wisely, aren't managing their money well enough. I use credit cards for pretty much everything, but I use it just like I would real money, because it IS real money. Honestly I've never understood why everyone has such distinction problems between the two. To me it's just a convenient way to consolidate my bills so I'm not constantly having to move money in and out of my checking account. I don't like debit cards because the fact that the charge takes money out of my account before I can dispute it scares me. I realize you can still dispute charges and get it back but I like the feeling of safety I get from disputing charges while I still own the money rather then asking for it back. And I don't want to carry cash around.

Re:Sounds about right.

[petermgreen]

Zero is nothing. In your way, you aspire for zero and in mine, I seek to avoid it.

Seeking to avoid zero has little to do with whether you have a credit card or not. You can seek to avoid zero while still having a credit card and you can be up to your neck in trivial debt* without a credit card.

Personally I have a credit card for two reasons. Firstly to segragate potentially risky (I consider any online transaction to be potentially risky) transactions from my main current account where fraudulant transactions could be either lost in the transaction volume (if they are small) or cause problems with my rent etc (if they are large). Secondly because I don't want to be stuck without a functional card (in my experiance credit/debit cards are far from 100% reliable as a means of payment even in the absense of fraudulant activity).

* I consider student loans and mortgages differently from other debt. The former because in my country you only pay it back if you are earning over a certain threshold and the interest rate is tied to be equal to the inflation rate so while it's technically a loan practically speaking it's more like a tax on graduates. The later because if you weren't paying a mortgage you would probablly be paying rent instead and if your income stream dried up you are likely to be screwed either way.

Re:Sounds about right.

[emddudley]

If I pay for something with a card, my creditor provides additional protections in case what I bought is not as advertised, or if there is some other dispute with the merchant.

Anecdotal evidence: The local symphony orchestra went bankrupt this past May and cancelled the season, no refunds. I would have been out of luck except for the fact that I had purchased the tickets on my credit card. I contacted my credit issuer and it refunded my money as "service not delivered."

I had also contacted my local attorney general's office, so I received a letter when the bankruptcy proceedings were complete stating that I would not have received any money from the liquidation of the symphony's assets since I was not a primary creditor.

Re:Sounds about right.

[erroneus]

No, I mean people who "need" credit cards. I'm not going to deny that they make things easy from a consumer standpoint. But there are better ways. I like the limited debit card approach -- best of both worlds really. Use it like a high-speed check issuing instrument and keep a close eye on the transactions, transferring money into the account as needed but not "too much." (Too much meaning more than you can afford to lose due to fraud of some kind.)

There are people who survive and conduct their daily lives using credit cards and think it's nice to pay it off each month. But as another poster pointed out, it's a contributor to inflation and higher prices. It also helps to kill the mom&pop shops that can't negotiate lower rates per transaction than WalMart or other large retailers.

Re:Sounds about right.

[operagost]

I am truly sorry that you are so ignorant about the US banking laws, yet feel entitled to comment on them.

Re:Sounds about right.

[erroneus]

Life of Brian reference... took me a while to get that... I was like "damn... sounds familiar..." until I said it to myself Monty Python male-acting-as-female style.

Re:Sounds about right.

[Alien Being]

You say that credit card theft and identify fraud is some form of capitalism? And you think I was trolling?

It's no wonder you post as AC. If you trule think that it's just a game that everyone else is playing then you are a sociopath.

Re:Sounds about right.

[sjames]

Yes, but with such a limited supply and all of them doing exactly the same thing, there is no pressure to change. Incredibly high barriers to entry keep them from having to deal with lean and mean upstarts willing to do better.

Re:Sounds about right.

[EdIII]

I think you may be speaking about debit card systems. At one point I looked at the debit card agreement over 15 years ago and looked straight back at the banker and told him his company was on crack if they thought I was going to allow unlimited amounts to be drained out of my account through the debit system with 4 numbers and the ATM only allows me $500. I demanded an ATM only card and received one. Since then, I always ask what the maximum number of digits is. Some banks actually allow up to 12. I know BOFA allows 6. Another credit union allowed 7. If you go to a bank with something other than 4, it makes it very difficult to brute force and that activity is logged.

I NEVER use the debit card system and make it a point with a certified letter to the bank indicating that I will never perform such activity and they must construe such activity as fraudulent. Since that statement is true, then there is no way to capture my PIN number. I always use it as a credit card, which affords me much greater protections.

Drain his pension? How does that happen? It's a monthly payment.

Furthermore, in the context of credit card discussions, that is impossible. The credit card companies can't actually take money from you, unless you agree to a EFT draft of your account every month, but once again, how does that even drain the pension?

Most cards are 0$ liability, but some are 50$ max. So how does this drain all the man's money again?

What kind of pension are we talking about here? Setting aside the fact it is impossible for a thief to "drain" a pension, most pensions, especially government and military ones are EXEMPT from garnishment. Look it up. It's the law.

Furthermore, if the credit card company did come after him all he would have to do is take out enough money to leave $999 dollars in his bank account since (at least in the state I am in) you cannot take money, even with a judgement, from an account that has less than $1000. That assumes that they could win in court or even arbitration.

None of your story makes sense. There has to be something else that went on there, especially with the pension. I can't possibly see how the thief could continue to receive the monthly pension payments.

I should know. I have been helping out several older people with pensions that just can't keep up with their debt because they got caught up in the real estate crazy and thought they were going to have even more money to play with.

It really is simple. The very day your pension payment comes in you set up automatic payments to all of your utilities and take anything extra and put them towards the utilities, or your credit cards. Credit cards can have a negative balance, they will take your money happily. At the end of the month all of your money is gone, save for a couple hundred bucks in the account they can't touch. They also cannot make the utilities give any money back, or the credit card companies either. A judgement does not allow them to do this with other companies, only assets and bank accounts. Negative balances with utilities and credit card companies don't count as a bank account or an asset and you don't even need to disclose it in a debtor's exam.

So, although your story is emotional, it is fraught with logical holes that I just can't figure out. My original point stands.

Re:Sounds about right.

[EdIII]

Once again I am confused how even a poorly secured credit card system allows your bank account to be drained... unless you are using debit.

Debit != Credit Cards. They are not even remotely the same.

I refuse to use debit, never have used debit, never will use debit. It affords me no protections at all and any fraudulent activity has an immediate affect on my available balance at the bank. Using your ATM card as a credit card does the same thing, but you are afforded MUCH better protections and when the activity is clearly fraudulent. I have even had the bank issue provisional credits on my account while the investigation proceeds.

Re:Sounds about right.

[Anguirel]

I have a credit card. It has no balance beyond what I bought this month. It has never carried a balance between months. I have never owed interest on it. Having a Credit Card is not the same as In Debt To A Credit Card. Everything I have is paid for. My monthly debt is all my monthly expenses, which are paid for at month's end. I have money in multiple accounts earning interest.

Now here's the difference between you and I... I'm one month ahead of you in terms of investing (I can invest my paycheck immediately, since I delay payments for food and such by about half-a-month on average via the credit card), and if I ever need to buy something that costs more than what I can afford out of pocket, I can get a better loan since I have a solid and established credit record.

Re:Sounds about right.

[Anguirel]

Each CC transaciton attracts a higher fee paid by the merchant (that's who you're paying) to be paid to the bank. This can be as high as 3%. The cost of this is passed back on to you, the customer in the form of higher prices. The net effect is to increase the cost of whatever you're trying to purchase without increasing revenue to the company you're purchasing from.

Please dont tell me that you're naive enough to think the bank was giving you free money, they paid you back out of the % the bank got from the merchant.

Paying by direct debit or bank transfer does not attract such high fees.

Perhaps it is different in Australia, but in most stores in the United States, that fee is entirely hidden from the customer. The store signs up for a given Credit Card Service, and all customers (regardless of payment type) pay the same prices at the Point of Sale. Some few merchants will charge extra for Credit Card usage, but it's not common. If that fee were transparently passed along to consumers, I suspect fewer would use Credit Cards as they do presently, but I couldn't say how many would voluntarily drop the Credit Card from their purchase cycle. Probably far fewer than I'd like to expect.

Not nearly enough time

[icebike]

Ten years means he will probably enjoy the fruits of his labor at 35, when he retires with some of that 36 million (or the other multi-millions the feds never found) that he squirreled away off shore.

Re:Not nearly enough time

[Oxford_Comma_Lover]

Leading to losses totalling 36 million does not mean that he personally stole 36 million. He may have just had a commission--at that quantity, he sounds like a wholesaler.

Re:Not nearly enough time

[hansraj]

Losses incurred probably include things like time lost in canceling a card and issuing new one. The wordings of TFA don't make it clear whether he used all those cards or he just sold it to other criminals, so I have no idea how much this guy directly made.

Re:Not nearly enough time

[erroneus]

That's a ridiculous assumption. This guy was stupid enough to get caught. I seriously doubt he was smart enough to be able to hide the money. $36 million was mentioned but that's against CC accounts that have been bought and sold by him and doesn't prove or even indicate that he actually even used any of those cards himself. And the article identifies him as a career identity thief. "ID Theft" (Identity Fraud) doesn't usually involve the use of existing credit accounts, but rather it usually involves opening lines of credit using "identity information" of others.

Still, glad he got caught and slammed for it. A person who does what he did shows little concern for the harm he causes others.

Re:Not nearly enough time

[Kittenman]

Ten years means he will probably enjoy the fruits of his labor at 35, when he retires with some of that 36 million (or the other multi-millions the feds never found) that he squirreled away off shore.

Don't drop the soap in the shower in the meantime.

in prison the high cost of phone + commissary

[Joe_Dragon]

Eats funds fast and the club feds are not what they just to be.

Re:in prison the high cost of phone + commissary

[hedwards]

It wasn't $675k, it was 675k CC numbers that were stolen, so it's doubtful that he made only $675k.

Rampant greed

[Anonymous Coward]

640 K credit cards should be enough for anybody.

This guy took it too far.

Rogelio Hackett

[russ1337]

The Mr Hackett was destined to become a hacker...

....researchers have found that people named Dennis are more likely to become dentists. An article, “Why Susie Sells Seashells by the Seashore,” finds that in the U.S. population the names Jerry, Dennis, and Walter rank 39th, 40th, and 41st among male first names. But in the national directory of the American Dental Association there are close to twice as many Dennises (482) as Walters (252) and Jerrys (270). “Similarly, people whose names begin with ‘Geo’ (e.g., George, Geoffrey) are disproportionately likely to do research in the geosciences (e.g., geology).”

http://www.freakonomics.com/2009/04/24/yes-part-ii/

Re:Rogelio Hackett

[scottrocket]

Our species is so shallow sometimes. I wonder if people named "Jesus" (Hey-Zeus) are more likely to become preachers, or if "Johns" are more likely to get hookers.

Re:Rogelio Hackett

[Stellian]

What if the name Dennis was fashionable among the upper-middle class during the years the current generation of dentist was born, leading to a significantly higher propensity for a high-investment, high-income career for the children ?
The guys of Freakonomics explained how children names become fashionable among the upper classes, and are then emulated by the lower classes; the upper classes then move to new names as the old names become mundane. Slutty names like Bambi and Brandy were at one point all the rage. Incidentally, they point to a study where identical CVs get 50% less callbacks when they belong to people named Tyrone and Lakisha.

Re:Rogelio Hackett

[Oligonicella]

The doctor who set my broken arm when I was thirteen was Dr. Bonebreaker. Shit you not.

Re:Rogelio Hackett

[JustSomeProgrammer]

+1 awesome

about that fine,

[nimbius]

do you accept visa or mastercard? ;)

I never get why these people stick around

[nzac]

Could he not have stoped at say 15M and taken an indefinite vacation to a non extradition country.

Re:I never get why these people stick around

[arcite]

No he couldn't, because he was stupid and greedy.

Re:I never get why these people stick around

[glwtta]

He couldn't, because he never made anywhere near that: the card numbers he stole "led to" losses of $36 mil, meaning he sold them to others who actually exploited the stolen identities (hence, 'trafficking').

I doubt he made more than a few million, and really, who could live on that?

Re:I never get why these people stick around

[misexistentialist]

He probably didn't clear all that much after everything was converted to cash and the money was split with his associates.

Re:I never get why these people stick around

[jimicus]

This.

There seems to be a perception - and it's not limited to /., I've seen it all over the place - that as soon as you're running a business that's turning over, say, £10 million per year, you're automatically going to be making an enormous income yourself and could theoretically sell the business and retire inside a couple of years.

Truth is that in many businesses, a £10 million turnover realistically equates to about £500,000 net profit. Which sounds fantastic but it's only about 5% - a few percent out on your arithmetic, a few big expenses you didn't expect or a few clients that you have trouble getting to pay up and that business isn't making a profit any more, it's making a stonking great loss.

Re:What he deserved was...

[Anonymous Coward]

Prescribing the death penalty for stupid shit like this is for uncivilized fuckheads.

Re:What he deserved was...

[Anonymous Coward]

1 bullet. Under the chin. Along with all of the other hackers, spammers, etc.

cute, did you miss some game time on psn?

Hung for a lamb, hung for a sheep

[Anonymous Coward]

This person definitly deserves a hard punishment for his crimes - there are over six hundred thousand people out there, inconvinenced at best, driven to financial ruin at worst, on his conscience. But I feel one minor twang of discomfort: he pleaded guilty and still has gotten the maximum sentence. This way, there is no incentive for the next criminal to not plead not-guilt and try every possible defense to get a lighter sentence or even a (incorrect) "innocent" verdict.

Looking at it in a game theory way:
Plead not guilty -> Extremely likely: Maximum Sentence; Extremely unlikely: Go free
Plead guilty: -> Maximum sentence
Conclusion: Always plead not guilty?

Re:Hung for a lamb, hung for a sheep

[Dainsanefh]

That's why anarchy is the preferred political system of the new millennium.

Re:He's not going to white-collar resort prison...

[Anonymous Coward]

You guys brag as if you're proud about your human-rights-violating prisons. Don't give me no shit about China.

Re:He's not going to white-collar resort prison...

[artor3]

It's a line from a movie. One that virtually everyone on this site has seen. It doesn't mean people are pro-rape. The occasional scumbag might be, but if you judge an entire country based on them, you're going to find that every country fails your standards.

How does this sit with the RIAA sentances

[Fluffeh]

Given that 675,000 credit cards is a ten year prison sentence, I do wonder what the same sentence would have been if it was 675,000 tracks he downloaded - and if the two of these sentences are therefore proof that the law is tilted towards a specific type of industry?

Re:So a day in jail...

[Zero__Kelvin]

"I'd take my chances in federal prison for 10k a day."

Sure, on the first day. By the second day, you would offer to give them the 10k back with 100% interest in order to be released, I promise you.

Re:36m in 10 years?

[MobileTatsu-NJG]

I'll admit to not reading the f'n A, but I don't think they let you keep the money.

sentencing guidelines

[NynexNinja]

The sentencing guidelines have been changed several times over the last 20-30 years regarding the penalties for this type of offence. In the 1980's or 1990's, had this guy been sentenced, he would likely be facing probation or at most a few months in jail, depending on his prior history. These days, they really throw the book at these people and the sentences are on par with murderers and other violent felonies. This man was born about 10 years too late, and was about 10 years older than he should have been when he committed these crimes. Also, I highly doubt the inflated numbers involved in the theft of the credit card data. The credit card companies have been known to dramatically inflate these losses, and then if you ask them for any sort of documentation proving any of it, the real numbers are somewhere around 1% of the original amount they specified. They probably claim this as a deduction on their taxes.

At least it wasn't copying

[Bengie]

If he had 675k of MP3s on Bittorrent, I'm sure he'd have life in prison for costing the music industry 90 trillion in damages.

BFD

[Fujisawa Sensei]

Big fucking Deal. Fucking whiners and such. I had 3K of fraudulent chargers against me last year. And while I could have been shafted when a minimum charge, come company took the hit instead and I paid nothing. That said, I still hope that was the same fucker.

And at that much money, hopefully it won't be club fed. I also hope that some state gets its hands on him, and he ends up serving some time in a fuck you in the ass state pen with thugs and violent offenders.

Re:BFD

[mrnobo1024]

I also hope that some state gets its hands on him, and he ends up serving some time in a fuck you in the ass state pen with thugs and violent offenders.

Really, you're happy with thugs and violent offenders being given free sex slaves paid for by your tax dollars?

If this country had a single ounce of sense we would just shoot the guy.

Credit Card vs Debit Card: Big Differences

[Dragon Bait]

It's not that serious. If you have an issue with cancelling your credit card, informing a few companies of the change, and filling out a short form to recover your money you have bigger issues than this man. People need to relax.

These stories never distinguish between credit cards (that you write a check for once a month) and debit cards (that connect directly to your bank account), even though there is a big difference legally. IANAL: Legally, you're only on the hook for $50 after you report your credit card stolen. Legally, you're on the hook for 100% if your debit card is stolen.

Anecdotal: I never heard of any friends being held liable for even the $50 from the credit card loss/theft. The banks have usually eaten it. I have had co-workers who have had their account cleaned out from a debit card being stolen and the individual had to eat the loss.

Re:So a day in jail...

[N1AK]

Really? Surely, how likely the chance is plays into it? I'd like more money, don't get me wrong, but I'd rather have more time to enjoy. I can't imagine how much money it would take to make me risk losing 10 years to prison, unless the odds of being caught were neglible.

Re:Credit Card vs Debit Card: Big Differences

[jonamous]

This is not true, actually. Regulation E covers both credit and debit cards. If you report the fraud within two days of discovering the fraudulent activity, you can be liable for up to $50 (some banks, like mine, offer zero liability). If you wait longer, you could be liable for up to $500. The big difference is that a credit card charge is typically reversed during the Regulation E claim investigation, while a debit card transaction is left there during the investigation. Many banks will give you a provisional credit during the investigation (debit card) but I do not believe they are obligated to do so. Investigations can take a while, so if your money is tied up due to a Reg-E claim, you could be screwed.

Those are only his federal charges.

[Marrow]

He almost certainly broke the laws of every state in the nation. Each state therefore can build a case against him while he is in prison. And since he made the statements, they would be easy cases to prosecute. I doubt he is going to Tahiti after his term.

Re:Credit Card vs Debit Card: Big Differences

[Dragon Bait]

This is not true, actually. Regulation E covers both credit and debit cards. If you report the fraud within two days of discovering the fraudulent activity, you can be liable for up to $50 (some banks, like mine, offer zero liability).

I am happy to note that you are correct. See FTC's Facts for Consumers. I wonder how long that's been in effect. The guy at work was reasonably upset. I wonder if he missed the 60 day window or it occurred before the rules changed.

Had to do it, sorry.

[databaseadmin]

467.52 seconds per stolen credit card.

Georgia?

[quenda]

Why is the U.S. Secret Service doing busting into a house in Georgia?
Do they suspect the Georgian secret service of colluding with the perpetrator? Or Russian Mafia moles in the Georgian police?

Re:Georgia?

[julesh]

Perhaps you aren't aware, but there are multiple places called Georgia. See this useful wikipedia disambiguation page.

Grade school arithmatic

[userw014]

7.8 minutes of incarceration per. stolen credit card.
Assuming no time off for good behavior.

No jail time

[tompaulco]

Don't send him to jail, we have to pay for that. Instead make him pay back the $36 million plus $1,000 per person or entity affected. Raid his bank account and garnish 100% of his wages forever.

Re:Yeah,

[icebike]

I'm sure it will be some white collar low security prison campus like Lompoc, where non-violent offenders go.

thats it?

[hesaigo999ca]

I would have made sure he never do it again, surgically remove one hand.....that way he is constantly reminded of the loss and suffering he imposed on others