Horrible Banking Experiences: Credit and Banking Laws Need to Be Changed

A shocking thing happened to me and it may well have happened to you. I was shopping at Ralphs a few weeks ago, and when I opened my wallet to swipe my credit card, I noticed that my VISA and Master Cards were missing. I was horrified and tried to retrace my steps. Where had I been? When had I used the cards?

I had just come from Bally's gym in Hollywood and assumed that I must have dropped the credit cards when I took my gym card out of my wallet. Perhaps I'd turned the wallet on its side and the cards fell out. I'd also used my American Express credit card a couple of times over the weekend, and thought (though unlikely) that they might have fallen out unnoticed then.

One thing seemed odd. My AMEX card was in a different place in the wallet. Could a brazen thief have taken the two other cards and placed the AMEX card in a new position so that I wouldn't notice they were missing? All while I turned my head momentarily while my wallet was on the counter? My head was spinning and that scenario didn't seem probable.

By the time I returned home a few minutes later, my telephone was ringing and I'd just missed a call from the VISA security people. They'd already picked up on some strange activity on my account, which meant my worst fears were realized. However they might have gotten them, a thief was using my credit cards.

I called the security office and, as the Master Card was also issued with the same bank, they were both immediately frozen, but the damage was already done. In the first instance, the thief had used the Master Card to spend over $1600 at Armani's, then tried to use the card at Sephora's Makeup boutique at the Beverly Center. At this point, something in the computer system said, "Uh-uh. This doesn't seem like a normal purchase" and suspended the account. No problem to the thief, as he/she just whipped out the VISA card and spent $650 on makeup supplies.

I was told not to worry. These things happen, and I wouldn't be responsible for the charges. New cards would be issued soon. However, I had to ask, as the thief(s) did not take my driver's license or, oddly, any cash, why the merchants didn't ask for any form of ID? They just allowed over $2,000 worth of product to waltz out of their stores, although when I go to K-Mart, for example, even when I spend eight dollars they ask for proof of identity.

Two days later I went back to Bally's gym and casually mentioned to some staff members that I'd lost credit cards, which I was sure had fallen on the floor there. One asked if I'd called the previous day, and when I said I hadn't she said that another person complained that someone had gotten into his locker and, as in my situation, only the credit cards were removed.

This seemed unfathomable to me, as I always lock my locker; some people don't. But it still wasn't crystal clear to me that my credit card loss was anything other than my own carelessness.

In a week's time, both credit cards were replaced and the charges were reversed on my account. I was vigilant in my behavior at the gym, making certain that I held my wallet upright when I swiped my entry card and always remembered to spin the combination lock a few times after I closed it so that a potential thief might not open it up simply by turning it slowly to the last number in the combination.

All was fine, and then a week and a half later -- last Thursday to be exact -- I was at Ralphs purchasing groceries, opened my wallet and -- you guessed it -- most of my credit cards were once again gone. This time, my AMEX card was chosen, as well as my newly reissued VISA Card, and, even worse, my production company VISA debit card, which is linked to my business checking account.

I couldn't believe my eyes, but now I was absolutely certain. Both losses were noticed immediately after leaving Bally's Hollywood gym, and so it certainly couldn't be termed a coincidence. I frantically called my credit union, which issued the credit VISA Card, naturally upset but also mortified because I had just incurred a loss with them so recently. Mercifully, the thief(s) spared my Master Card, so the two other financial institutions would be dealing with me in this manner for the first time.

This time, it was much worse. My bank-issued VISA debit account linked to my production company checking account had been charged $2,800 for a new computer at The Apple Store at Fashion Square in Sherman Oaks. They tried to use it to purchase another computer there, but it wouldn't go through a second time, so they just pulled out my VISA credit card and spent another $3,000. Then, they went over to Sephora's Makeup -- this time a different store and also at Fashion Square, and tried to use the VISA credit card again for almost $900 in make-up. As it was the second purchase, VISA declined it, and so they whipped out the now handy American Express card before making their getaway.

All in the space of less than an hour and within a couple of hours of when I'd entered Bally's Gym in Hollywood. All purchased without any thought by the merchants to ask for an ID, and in the case of the production company debit card linked to my checking account, the computer never picked up on the fact that a $2,800 purchase was accepted even though I'd almost never used the card to buy anything and never for over $100.

While it's very nice of them to say that I won't be responsible for the charges, I can't imagine why a system is in place where merchants are not required to ask for an ID, and if they don't why the merchants are not responsible for their laziness?

I called The Apple Store and Sephora, both at Fashion Square in Sherman Oaks, and spoke with their managers, telling them about the circumstances and that I was about to file a police report. Both of them indicated they couldn't do anything to halt the credit authorizations on my cards, as the thief(s) had made off with their items. My only recourse was to deal with my financial institution, and while they expressed sympathy for my plight they felt no particular guilt as an accomplice to this crime.

Okay, you might say, "What's the beef? You won't have to pay the freight." Except that my credit report will no doubt be affected to the extent that I might be some sort of future risk even though I'd placed my valuables in what I'd believed to be Bally's secure lockers. And the tumult which followed might have all been avoided if there had been a mandatory requirement in place to demand an ID before allowing purchases -- certainly, let's say, for more than $100.

And because of this negligence, how much of this fraudulent activity, which must amount to billions and billions annually, gets passed on to all of us consumers as higher financial institution fees and lower interest rates to help the banks get back their collective losses? It is time for our representatives in Washington to recognize that we've made it easier for thieves to ply their trade and pass a law that puts the responsibility on the tradesmen who accept these cards to make damned certain that the card holder is the person in whose name it is issued.

And while they're at it let's have them do something about the unreasonable time it takes for a check to clear, even when the amounts are debited from our accounts in as little as 24 hours. When I purchased a car last year and needed a cashier's check from my Los Angeles Bank of America branch, I was told by my bank representative that most of the money I was depositing from a major credit union in the Washington, D.C. area would not be available for almost two weeks. It was explained that my check would have to go to the proof department, which took a day, and then be mailed to the Virginia location by snail mail, and then it would take a week or so to get certification from that credit union.

I yelled and screamed and got my money within 24 hours. How many people do that? However, just out of curiosity, I checked my credit union on-line a couple of days later and saw that my money, which supposedly had such a long distance to travel, had already been withdrawn the day before from my credit union account. Had I not complained, the Bank of America would have been holding my money for two weeks until it was finally released.

I wrote letters to the Federal Reserve Chairman, the Comptroller of the Currency -- even Chairmen Barney Frank and Christopher Dodd of the congressional banking and financial services committees. From most I received not a word, but essentially the best response I got -- from the Comptroller of the Currency -- was that it was all perfectly legal, something called Regulation CC, and it was necessary for Congress to change the law.

We are no longer living in an age of "Catch Me If You Can," when banking really was mostly performed by regular mail delivery. To Congress, I would say, "Wake up! We have something called computers now, and people should not be denied their rightful funds for outrageously long periods."

So, I've related to you two solutions to problems that involve so many of us: the mandating of ID requirements for large credit card purchases and changing the check clearing requirements to reflect modern day society. Maybe if we all write letters to our congressmen our lives will be a bit better. And maybe if enough of us do so they will actually respond with a polite reply and, more importantly, by enacting the necessary legislation.