Fraud case may extend beyond Wesco

November 17, 2006

Marie Havenga, Grand Haven Tribune

Spring Lake Township residents Scott and Robin Smith felt fear when they were alerted by their credit card company of almost $13,000 in European charges. They hadn't been to Europe.

The Smiths have been working night and day preparing to open a new G & L Chili Dog restaurant on Savidge Street in Spring Lake. Their current schedule doesn't allow for a vacation abroad and extended hotel stays in Europe.

Their Chase credit card fraud services department caught the glitch, called them, and paid the charges, after the Smiths filed an affidavit and other necessary paperwork.

"One charge was for $3,725 for a hotel and another was for $1,700," Scott Smith said Thursday night. "All of the charges fell on Oct. 31. I only use this card for business fuel and auto expenses so I can keep those charges separated (for income tax purposes)."

Other West Michigan and Northwest Ottawa County residents may have similar fears or experiences after receiving ominous letters or phone calls from credit card issuers warning of a potential "compromise" in their credit or debit card security.

The potential breach, it initially seemed, stemmed from purchases at Muskegon-based Wesco fuel stations. But federal authorities no longer are certain that the depth and breadth stops there. The federal investigation continues, at the hands of the U.S. Secret Service and the U.S. Attorney's office. According to the U.S. Attorney's office, several suspects are in custody throughout the United States.

The Smiths are not alone in the saga of potential credit card fraud/identity theft that may or may not involve Wesco gas stations.

"I frequent Wesco in Spring Lake and I also filled up recently at a Fremont Wesco," Scott Smith said.

"I still go to Wesco but I pay cash or write a check," said Smith. "Wesco is a victim in all of this. If it can happen at Wesco, it can happen anywhere. I'm still a loyal customer."

Richard Murray, assistant U. S. Attorney for the Western District of West Michigan, said the potential fraud is part of an ongoing investigation. He said several suspects are in custody, although he would not say where. Murray said a suspect recently was apprehended and is being held in Ohio.

"We're still analyzing the data," said Murray, who works out of the Grand Rapids-based federal office. "We don't have any information to indicate a specific data breach. We don't know for sure what happened."

Murray said all Wesco fuel pumps have been inspected and it's unlikely an unwelcome card reader recorded information directly from credit card swipes at the pump.

"At this point we're pursuing all avenues," Murray said. "We don't have any reason to think Western Michigan was targeted specifically. If it was an insider, which we're not saying it is, but that person knew where the data was coming from. Hackers, if they're breaking into a network, don't care where the machine is. They just care where the data is."

Tri-Cities residents and credit card issuers have picked up on questionable charges from as far away as Spain, Tokyo, New York, Texas and Georgia.

Ferrysburg resident Pat Twa said his credit card issuer called him in October to question a business credit card purchase of more than $500 in cosmetics from a perfume store in Spain. Twa said he had not been in Spain.

Spring Lake Township resident John Bottema's credit card company recently informed him he will not be held liable for more than $1,200 in pharmacy purchases in the Detroit area, a locale where Bottema said he was not present in mid-October when the charges were posted.

Ferrysburg resident Roger Posthumus said he was not in the Big Apple on Oct. 16, the day his credit card company posted an unknown charge from Gucci in New York City.

Although charging fuel and commodities at any of Wesco's 51 West Michigan branches seem to be a "common denominator," according to federal authorities and bank officials, it may not be the end-all, mean-all to the problem.

Wesco spokeswoman Ginny Seyferth said no current or former employee is under investigation for the suspected activity federal authorities say took place between July 25 and Sept. 7.

"We're in a holding pattern while the investigation continues," said Seyferth, adding that Wesco was proactive in posting warnings of potential fraud on every gas pump at each of their facilities. "We're continuing to cooperate fully with authorities."

Seyferth said there has been no reported or suspected fraudulent activity after Sept. 7.

"We're monitoring just to make sure the issue stays in the (time-frame) scope that we've been told, which is Sept. 7. This is a live investigation. This is probably the safest place to buy gas in America right now because of this investigation. Business is solid because people are appreciative of the approach the company took. They understand we're all victims in this."

Seyferth said she's received reports and calls from consumers experiencing similar questionable fraudulent charges who say they've never shopped at Wesco.

"This is happening in places where there are no Wescos," said Jill Maitzen, a manager at the Fifth Third Ferrysburg Branch, who has also received fraud complaints from people who have never shopped at Wesco. "This seems to be international and (card numbers) are being sold all over the world."

The Tribune has also received similar reports from readers of potentially questionable credit card postings well beyond September.

"It's possible other merchants are involved," said Murray, the federal attorney. "That's what we're trying to clarify. It seemed out of proportion to Wesco but we're a little taken aback on the scale that this seems to be reaching. We're trying to figure out if there's something bigger going on than what we thought initially. We're not quite ready for something of this scope. We don't have a squad of people to handle it."

Murray said many credit card companies are reissuing new numbers and credit cards to consumers for precautionary reasons.

"We need to work closely with credit card issuers as to what their data is," Murray said. "The challenge is to get in touch with the right person. We're hearing a lot from consumers but we want to talk to the knowledgeable party (at the bank or credit card company).

Fifth Third Bank corporate offices recently mailed letters to customers informing them of potential "security breach" due to unconfirmed Wesco and other merchant debit charges. As a precautionary measure, Fifth Third plans to cancel all current MasterCards and reissue them by Dec. 1.

Murray said other financial institutions typically are following the same precautions, and if not, they should.

"We're trying to work with banks across the country on this and that presents challenges," Murray said.

Maitzen advises the following for consumers who suspect they might have fallen victim to the recent fraud:

-Be on the offensive. Check your bank statement daily on the Internet.

-Be aware of potentially fraudulent phone calls, but don't scare yourself into ignoring an important one.

-When in doubt, stop by a local branch to talk to a representative face-to-face.

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