HOUSTON --- Joel Lisker has built a long career devoted to safety and security, guarding against everything from terrorist attacks to organized crime. He served as an FBI agent, a federal prosecutor and the chief counsel and staff director for a U.S. Senate subcommittee on security and terrorism. More recently, he served as the worldwide head of security for MasterCard.
Now, Lisker has some harsh words for corporate policies uncovered by the 11 News Defenders at various large, national retailers.
KHOU’s undercover cameras documented how -- over and over -- we could shop at stores like Target, Sears and Hobby Lobby while using someone else’s credit card to make major purchases for items like GPS systems, Nintendo Wiis, tool sets, furniture, Xbox gaming systems and much more.
No one asked for photo ID and no one compared our signatures signed at the register with the signature on the card we presented at checkout. We even sometimes signed "not my card" and similar signatures and were still able to leave with goods in hand -- no questions asked.
We asked a Sears operations manager at a Houston-area store about the incidents on hidden camera:
Channel 11: "How come you guys don’t ask for ID?"
Manager: "It’s actually within our policy not to. We don’t ask for ID, as far as any customers. As long as you have your card, we just validate you have the card and slide it."
Channel 11: "So you don’t look at ID or anything?"
Manager: (Shakes head saying "no")
"What happens is they simply enable the thief," Lisker said, of policies such as the one described by that Sears manager, and later confirmed as accurate by a spokesperson for the corporate office of Sears.
"Candidly... I don’t understand," Lisker said. "People want to feel the merchants are part of the solution not part of the problem."
In fact, Sears says while their policy is to not ask for photo ID with a purchase, they do have another policy we did not find in place at every retailer we checked. At Sears, they require cashiers to compare the card’s signature with what you sign at the register. They say what KHOU discovered happening at their stores, at least as it pertains to employees who did not verify signatures, was not in compliance with their corporate policy.
As a result, they are now in the process of retraining employees at approximately 850 Sears and 1,330 Kmart stores across the nation. Kmart is the sister corporation of Sears.
"I think it’s a smart move on their part," Lisker said.
But speaking from his position as the former head of security for MasterCard, Lisker says he is very concerned about a specific corporate policy we discovered at Target stores.
"It’s a nonsensical policy. To put it in laymen’s terms, it’s stupid," Lisker said.
It was at Target where we found cashiers not only not asking for an ID, but also not comparing signatures. Unlike the stated policy that Sears and Kmart are retraining now to adhere to, Target told us they don’t want their stores to verify signatures before a purchase is allowed to go through. In fact, Target said in a statement that they stopped verifying signatures at the register at least five years ago, saying they rely on electronic systems to fight fraud.
The policy of not verifying signatures would seem to directly conflict with rules for merchants in place at Visa, MasterCard, American Express and Discover Card.
"It’s not only irresponsible, but it goes somewhat beyond that," Lisker said. "For them to willfully and by design flaunt those rules makes no sense to me, whatsoever because all it does is enrich the opportunities for the criminal."
So who pays for all this fraud at the register? Lisker said it gets passed to you in the form of increased banking fees and higher interest rates. But some banks are trying to fight back. ING Direct Bank said when they noticed higher rates of credit card fraud for purchases made at Sears, Kmart and Target, they limited customers' credit cards to $200 for any purchases made at those stores.
"We are constantly evaluating card activity with various merchants to figure out how often card information could be used fraudulently," said Jeff Mirabello of ING Direct. "If there is a high rate of fraud, we can make the decision to block certain merchants or transactions of a certain dollar amount. In the past, when’s there’s been a high probability of fraudulent activity with card transactions, we’ve taken precautionary measures to ensure that our customers are not impacted by fraud."
