[Congressional Record Volume 156, Number 7 (Thursday, January 21, 2010)]
[Extensions of Remarks]
[Page E64]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                INITIATIVE TO WIPE OUT CREDIT CARD FRAUD

                                 ______
                                 

                         HON. DANA ROHRABACHER

                             of california

                    in the house of representatives

                       Thursday, January 21, 2010

  Mr. ROHRABACHER. Madam Speaker, I rise to speak briefly about an 
initiative by MagTek, a company from California's 46th District, which 
I represent. This initiative is aimed at eliminating credit card fraud 
which funds gangs, crime syndicates and global terrorist organizations, 
including Al Qaeda. I would include in the record a short excerpt from 
a speech describing the initiative, and I ask all of my colleagues and 
the American people to join us in wiping out credit card fraud.

  Excerpt From a Speech to the Federal Deposit Insurance Corporation 
                   (FDIC) Payment Security Conference

            (By MagTek Chief Security Officer Tom Patterson)

       Billions of dollars are being stolen every year from 
     thousands of banks, hundreds of thousands of merchants, and 
     millions of consumers--and it's being used to fund gang 
     activity, organized crime, and terrorist plots. And it's got 
     to stop.
       Our identities and credit card information are being stolen 
     across America, by waiters and waitresses in our restaurants, 
     by clerks at our stores, and even our ATM machines and gas 
     pumps. In fact, every time we hand over our credit or debit 
     card, Americans are taking a risk that our critical 
     information could be stolen. Last year, over $4 billion 
     dollars was stolen from us with these methods and others like 
     them, and many of these thefts are being perpetrated by 
     people and machines that have been co-opted by criminal 
     gangs.
       Gangs in America, like the ``Bloods'' and the ``Crips'', 
     have now moved aggressively into the counterfeit card 
     business, providing the devices (called skimmers), and paying 
     out $20 for every card number stolen. In fact, counterfeit 
     card fraud is now the third largest revenue source for many 
     of our largest gangs, moving ahead of extortion. They make 
     their money by selling blocks of these freshly stolen 
     identities up-stream, to foreign organized crime.
       A 2009 United Nations report has identified Russian 
     organized crime as the world's largest source of counterfeit 
     card fraud, just ahead of the Chinese triad gangs. The 
     largest of these, known as the Russian Business Network, is 
     well known for purchasing these aggregated lists of 
     identities and card numbers, combining them with near-perfect 
     looking fake cards and then selling them on underworld-
     sponsored auction sites to the highest bidder.
       One of the largest bidders for these counterfeit cards this 
     past decade has been Al Qaeda, who repeatedly purchases them 
     for use in funding their terror plots around the world. The 
     horrific bombing in the nightclub in Bali, which killed 202 
     people, was funded in large part by recently skimmed cards. A 
     captured Al Qaeda handbook describes in great detail how to 
     fund their plots, including the transliteration ``obtain 
     credit card numbers and use them to fund the struggle.''
       The security of our citizens should be paramount, 
     especially in light of its negative effects on merchants and 
     banks, and its role in funding of US gang violence, 
     transnational organized crime, and global terrorism. It's 
     time for our financial services industry to put a stop to 
     this, by working together to allow merchants to tell the 
     difference between our real cards, and these fakes that are 
     plaguing our way of life.
       It's now possible for banks and merchants to easily and 
     economically completely eliminate counterfeit cards from our 
     world, and they can do it today. By adding a simple ``card 
     authentication'' check to the credit and debit process, which 
     works with the same 3 billion cards we already have in our 
     wallets and the same ``swipe'' that we've come to trust over 
     10 trillion times per year, we will allow our retailers to 
     simply decline counterfeit card charges and thus wipe out 
     counterfeit card fraud around the world.
       All it takes to make this a reality is for the banks, 
     processors, and merchants to agree to share the ``magnetic 
     fingerprint'' inherent in the magnetic stripe of every card 
     we use, and rather than arguing over costs we can be sharing 
     the savings that come to all of us by saving billions of 
     dollars of fraud every year. Already, we have the initial 
     commitments to register the first 100 million cards, and make 
     this check available to the first 250,000 merchants. But we 
     need the rest of the players to take this step.
       I am here today to urge you to join the coalition to wipe 
     out counterfeit card fraud (www.NoCardFraud.com), and to do 
     your part in protecting the identities of millions of 
     Americans, improving the financial health of millions of 
     retail stores and banks, shutting down a key criminal 
     activity of gangs and organized crime, and disrupting the 
     funding of global terrorists.

                          ____________________