A growing number of retailers are requiring shoppers to provide photo identification or their billing address ZIP code if they’re using a credit or debit card.
The aim is to curtail card fraud, which totals more than $17 billion a year.
Best Buy, Kmart and JCPenney are among the large retailers that require all shoppers to either punch in the ZIP code of their credit card billing address or provide photo ID when using plastic.
“That’s excellent. It’s wonderful,” said Claudia Bourne Farrell, spokeswoman for the Federal Trade Commission. The policies are by no means foolproof, Farrell said, but they might prevent or deter some types of fraud.
Fraud has been shockingly easy in recent years because most cashiers never touch the card or see the signature.
Over the last five years, credit card fraud has affected about one in 16 people, according to the Federal Trade Commission.
While individual consumers by law aren’t liable for credit or debit card fraud on their accounts, we all pay the price because stores and banks pass along their losses in the form of higher prices, rates and fees.
Many retailers, such as Wal-Mart, for years have asked for ID on some large purchases or when prompted randomly by their computers. But across-the-board policies are new.
Consumers can expect such security practices to become standard, said Jay Foley, director of consumer and victims services at the Identity Theft Resource Center in San Diego.
“It’s coming. It’s all across California now,” Foley said. Punching in ZIP codes is particularly common at pay-at-the-pump gas stations and at discount and upscale retailers, he said.
“I suspect we’re going to see it all across the United States soon.”
In the average credit card fraud case, the thief charges $2,100 worth of merchandise. It takes the consumer 15 hours to sort out the mess.
Foley said that requiring a ZIP code can thwart simple cases of stolen credit cards when an entire wallet wasn’t stolen.
“What easier way to trigger the fraud-detection software than to punch in the wrong ZIP code?”
None of the security measures used are guaranteed to foil all fraud because fake driver’s licenses can be manufactured and criminals have ways of finding out people’s addresses. More fraud might be stopped if all credit cards required personal identification numbers, similar to your PIN for your ATM card.
Retailers – both traditional stores and online merchants – are constantly working on blocking identity thieves, said Dan Butler, vice president of operations for the National Retail Federation.
Extra layers of security will become more common, Butler said. “You’re going to see retailers continue to fight.”
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