Credit Card Fraud Easier, Police Say

For as long as there have been credit cards, there has been credit card fraud. But improved technology has made fraud easier to get away with in recent years, authorities said Tuesday.

Los Angeles Police Officer Phillip Clemons Davis, who was arrested last week in Burbank and charged with being part of a credit card fraud ring, operated a scheme known as “mag stripe fraud,” Burbank Police Detective John Dilibert said.

The scheme involves altering the magnetic stripe on the back of credit cards by using an electronic encoder, a device that can be bought on the street and costs between $2,000 and $3,000.

In the past, Dilibert said, credit card fraud was done by flattening down the name and account number on the front of a card and embossing it with new information. It was often easy enough to detect.

These days, fraudulent card users don’t go to that much trouble. A valid credit card account number obtained from discarded sales receipts, the account holder’s name and an expiration date are all that’s needed to reprogram the magnetic stripe of a stolen credit card, police say.

“This is very common nowadays,” Dilibert said. “Technology in the ‘90s has made it easier to do this.”

Davis, 33, of Fontana is a six-year police veteran stationed at the LAPD’s Central Division. He and two North Hollywood acquaintances, Tandra Ann Sadr, 19, and Monica Coles, 28, were arrested Thursday at an apartment complex in the 5300 block of Riverton Avenue.

Sadr and Coles were charged with burglary. Davis, whose preliminary hearing has been set for May 19, faces charges of possession of a forged driver’s license, possession of a counterfeit seal, insurance fraud and sale or receipt of access cards to defraud.

The arrests came as the result of an ongoing investigation and another arrest that police declined to discuss.

Investigators believe that Davis helped people to increase the limits on either their own or stolen credit cards, and charged them 10% of the new credit limit to do it. He also issued phony driver’s licenses and Social Security cards, Dilibert said.

By some estimates, fraud in the credit card industry is at least a $2-billion a year business.

LAPD officials declined to comment on the case against Davis.

But Sgt. Joe Paulo of the department’s bunco-forgery section said credit card fraud is so prevalent nationwide that the federal government has given the Secret Service authority to investigate such incidents.

The best way for businesses to spot fraud is to make sure clerks match the account number shown on the card to the account number approved for credit during a payment, he said.

Without that procedure, Paulo said, it is difficult to trace a fraudulent user because the credit cards are often stolen or counterfeit and the magnetic stripe information belongs to an unsuspecting person.