Credit card thieves are buying TriMet passes with stolen credit cards and reselling them to transit users for cash (at a discount), costing the agency $85k per year.
The Oregonian‘s Joseph Rose has the story.
Apparently, credit card thieves have figured out a good way to quickly turn stolen plastic into cash before the theft is discovered and the card is cancelled: Use them at TriMet ticket machines to buy monthly TriMet passes ($88), a transaction which does not require any identification, PIN number, or signature, and then sell them for cash (often $20) to transit passengers.
What happens when this occurs? The thieves, assuming they are not caught, get the $20. Whoever buys these passes gets a good deal on the pass–as TriMet passes are non-electronic and non-personalized, there is no way for the agency to revoke the pass. The person whose card it is, assuming the theft is properly recorded, gets their money back. The loser? TriMet, who has to eat the chargeback. According to Rose, TriMet lost over $85k last year to this scam.
Much of the problem stems from the fact that no ID, PIN number, or other form of security, other than a credit card, is needed to purchase monthly passes at vending machines. TriMet could upgrade the security of its ticketing machines (bank ATMs require PINs and frequently come with cameras, if nothing else to snap pictures of fraudsters that could assist the police in catching them). But according to spokesperson Mary Fetsch, upgrading the ticketing machines to deter this sort of fraud would cost more than what TriMet loses each year. As she put it, “its the cost of doing business”.
A better way to put a stop to this, and provide lots of other advantages to passengers–electronic ticketing. If nothing else, it would permit TriMet to revoke fraudulently-purchased passes, so it isn’t providing free bus rides–and were TriMet to crack down in this fashion, word would probably get out and there would no longer be a market for stolen passes in the first place.26 Comments