"The $75 [gas] Limit Ensures Merchants and Customers Are Protected From Fraud"

by Robert Farago

Published: May 31st, 2008

the 75 gas limit ensures merchants and customers are protected from fraud

Filling-up the Odyssey the other day, I was surprised when the wallet-drainage started slowing down at $48. Of course, I knew what wasn't coming: anything more than $50 worth of gas. As an a tax paying member of the world's most pampered people, I found it incredibly annoying that I had to restart the entire sales process for an additional $8. As a free marketeer, I found it bizarre that a large corporation (Shell) would make it hard for me to spend MORE money. Turns out it's the credit card companies– Visa and Mastercard– who are limiting millions of gas purchases to $50 in some states, $75 in others. As USA Today points out, even $75 won't do it for many fuel hungry behemoths. "At $4 a gallon, $75 buys 183/4 gallons. A 2008 Toyota Sequoia SUV's tank holds more than 26 gallons, a Chevy Avalanche sport pickup totes up to 311/2 gallons, and a 33-foot or longer Winnebago Adventurer RV hauls 75 gallons." While environmentalists may have little sympathy for the Devil, the credit card companies claim the limits protect their customers from fraud. Sure, in the same way they write-off fraud rather than upgrade members' card security with photo-embedded plastic or thumb print biometrics. Profits before people? No way.

[Can anyone tell me if their TTAC RSS feeder is working?]

Robert Farago

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William C Montgomery on Jun 02, 2008
I hate this cut-off thing. And it doesn’t limit fraud, it’s limits the card companies’ responsibility. $50 just happens to be the level at which the money stolen is covered by them, not you. By keeping the amount that can be stolen down to $50…well, you do the math…. Ah, the credit industry doing all it can to save us from fraud. How about ending all the BS credit card offers and checks that flood the mail. Think of the losses there. Oh wait, those losses are offset by the foolish people who open yet more cards and get buried in more 18% credit card debt. Now, I feel really good that the credit industry is at the ready to combat fraud. Yeah, and my golden retriever makes Hershey bars… Are the card companies getting an additional transaction fee for that second portion of the fillup, in addition to the percentage that they take off the entire purchase? Everybody’s looking to make the credit card companies the bad guys here. I think you’ve seen one too many asinine Oliver Stone movies because your outrage is really misplaced. Yes, banks are for-profit institutions. But we’re talking about real thieves that are stealing billions of dollars from merchants, credit card companies, and consumers every year. Haven’t any of you been the victim of ID theft? It takes money out of your pocket, kills your credit, and impairs your ability to buy a home or car – sometimes for years. This is hardly a case of The Man trying to stick it to the little guy. Grow up!

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Voice of Sweden on Jun 02, 2008
Mongomery: Credit card fraudsters are attracted to fuel pumps because the purchases are anonymous; it’s a relatively safe place for them to test whether a stolen or doctored card is going to work. Just put up some video cameras at the gas station. And what's with the pin codes? Am I the only one who doesn't have the pin code written on the card? The pin code is supposed to be secret...

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Geotpf on Jun 02, 2008
William C Montgomery : June 2nd, 2008 at 10:56 am Capping individual sales at the pump (within the industry called “island card sales”) is done by the credit card issues (i.e. the bank), not the gas station, oil company, Visa or MasterCard. Capping pump sales is mutually beneficial to both consumers and credit card company shareholders because it DOES limit fraud losses. Credit card fraudsters are attracted to fuel pumps because the purchases are anonymous; it’s a relatively safe place for them to test whether a stolen or doctored card is going to work. Industry wide, fraud is up quite significantly year-over-year, so don’t expect these controls to go away. If anything, look for more controls at the pump to go in place. For instance, in many “high risk” market, pumps now require cardholder to enter their home zip code as a pin before authorizing a sale. If you want to avoid having your sale capped at the pump, you can pay with your credit card inside the c-store where you’ll find no limit. I still don't understand how it stops fraud. If the theif could run the card once, what's to stop him from doing it a second time?

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William C Montgomery on Jun 02, 2008
I still don’t understand how it stops fraud. If the theif could run the card once, what’s to stop him from doing it a second time? Velocity Check. This is the fraud control that counts the number of times a card is used within a given period of time (i.e. 24 hours or over 3 days). After x number of purchases the card would fail to approve. It would throw a code instructing the bearer to see the clerk if he/she wanted to purchase further. It might also trigger a phone call from the credit card company’s fraud prevention unit to the card holder seeking to verify that the card was still in their possession and that the purchases were legit. So it wouldn’t necessarily curtail the small time thief from making one or two quick purchases before ditching the card. But it would stop the crooks looking to do more damage than that. Look, there are bad guys out there with stolen cards who would otherwise fill up the gas tanks of a dozen friends. Also, last year a ring of thieves were arrested in Florida. They hid tanks capable of holding hundreds of gallons in the beds of pickups under tonneau covers. They got caught selling stolen gas for pennies a gallon. Unfortunately, stuff like this goes on all the time.

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