Police investigate PIN code theft as scam moves into Plano
By Stephanie Flemmons, Staff Writer
(Created: Friday, October 17, 2008 10:52 AM CDT)

Early this month, Plano police started receiving reports of a national scam that has hit the city where thieves are snagging PIN codes and accessing fast cash.  Jerry Minton, Plano forgery and fraud detective, said a reported 45 cases are currently being investigated.

The scam has affected people nationwide. Minton said investigators are not too sure exactly how the PIN numbers are being compromised. He said the scary part is there is not a specific area targeted. The debit card scam is being tracked to all types of gas stations and ATM’s across the city, in neighboring cities and nationwide.

“Sometime people’s PIN numbers are being used in states they have not even visited,” Minton said. “The thieves are re-encoding a max drive on software and hardware they purchased. They can walk up to an ATM, pop it in and have the cash in hand.”

Minton said cardholders typically do not find out their card has been compromised until after the thief has conducted their “dirty business” or at the tail end, when they are finishing up. “The card could have been compromised two to three weeks or even one month before, and it’s just now being used.” Minton said. “This makes it hard to target a specific timeframe when the cards were compromised.”  The newest debit card scam is similar to the previous one where thieves retrieved bank information from credit cards and debit cards, but Minton said in this case, thieves do not have to make face-to-face contact to get the cash they desire.

The magnetic strip on the back of a debit card does not contain PIN number information, Minton said. The hard part, he said, is getting the PIN number.

“We don’t know if they have a trap and trade device, or something broadcasting out for a person nearby to receive on a laptop computer,” Minton said. “We don’t know exactly what they are doing. But, they have to be able to match up the PIN number with the max drive.”

The Plano PD and the Secret Service Dallas office have teamed up in this investigation.  Rob Caltabiano, assistant special agent in charge, said these type crimes are popping up everywhere. “They are nothing new, they just get more sophisticated,” Caltabiano said. “Every time we find out how they are doing it, another scam takes place.”

The Secret Service has an electronic crime task force that works on crimes such as this. The Plano PD has members on the task force, allowing them to work hand-in-hand.”  “Unfortunately this task force keeps busy,” Caltabiano said. “If we weren’t busy it would be a good thing.” Minton said detectives are also working with bank investigators and numerous stores.

“We are doing as much diligence as we can,” Minton said. “We are making sure we have a pretty good idea where the cards were compromised and not just singling out gas stations, or one person claiming they have bad business practices.”  Minton, along with another Plano detective, are interviewing each victim and investigating each case. He said no matter how much money was stolen from the victims, each case has its own impact.

“Anytime you take money out, you are expecting to have it in your account and you are counting on to pay your rent, groceries and bills, it will cause a bind,” Minton said. “I’ve seen many people who were put in a bind. Sometimes the overdraft fees assessed are more expensive than the money the thief took out.”

The importance of keeping track of daily activity that occurs in one’s account is getting more crucial everyday. The Federal Reserve Bank’s Regulation E stipulates as long as the consumer reports fraudulent activity in a timely manner, the bank is required to absorb the loss or try to recover it elsewhere.

ViewPoint Bank, based in Plano, is one of the many banks where the Plano police detectives are investigating fraudulent activity. Jennifer Kent, ViewPoint’s Account Service’s vice president, said the bank’s fraud department is working with the police in the investigation to determine how much exposure, if any, they have had.

“We encourage customers of all banks in the area to monitor accounts and immediately report unauthorized transactions to their bank,” Kent said. “When ViewPoint Bank becomes aware of an incident that may expose customers to fraud, all available resources are used to identify at risk customers. We make every attempt to contact the customer and close the account in order to prevent a loss.”

She said in some instances this involves blocking their debit card immediately and reissuing a new card number. She said typically affected customers are issued provisional credit for the unauthorized transactions and any related fees are refunded.

As part of the investigation, Minton said the targeted gas stations contact their own security team, who investigate every pump. He said it is the gas station’s responsibility to correct the problem if a skimmer or any illegal device is detected.  Recent reports target gas stations performing “inside jobs” and being behind the scam. But, Minton believes those reports are false. “They are servicing their pumps all the time,” Minton said. “The stores reputation is on the line. If customers don’t trust the stations point of sale terminals, then they will stop going to that particular station and their business will go under.”