Debit scam hits Hanceville business

Hundreds of thousands of dollars hacked from pay terminals

By Benjamin Bullard The Cullman Times

CULLMAN — Hanceville police are cautioning residents to be on guard against a sophisticated debit card wire scam that has leached hundreds of thousands of dollars from customers whose card numbers have been stolen remotely from pay terminals at one or more local businesses.

The primary target in the theft so far has been the Dairy Queen, located at 812 Main Street in Hanceville. Police say they are unsure whether their investigation will ultimately involve other businesses.

“At that location, somebody has apparently tapped into the Internet server and hacked into the debit card system, and they're printing out the customers’ debit card numbers and using them all over California and Georgia,” said Hanceville police Capt. Jimmy Rodgers.

Bank and deposit account fraud, as well as Internet-based crime, is subject to federal investigation and prosecution.

“We believe they have taken several hundred thousands of dollars,” Rodgers said. “We have been investigating this for about two weeks, but it has gotten so big and they are using such a sophisticated method that we have contacted the secret service to assist us in this investigation. A department our size does not have the capability or the resources to conduct this type of investigation without some assistance from people who deal with it regularly.”

Nearly 30 separate incidents of fraudulent activity had been reported, but officials said more reports are inevitable, as banks make new discoveries of days-old transactions and determine whether to issue chargebacks to protected cardholder accounts.

One victim discovered Wednesday that a series of 25 transactions at grocery stores and restaurants in California had wiped out her checking account and even incurred additional insufficient funds fees.

“I got up this morning and looked at The Cullman Times online, and I see a story about how there’s a debit card scam that’s going around. When I got on my checking account, sure enough - they got everything I had and more,” said the Hanceville resident who asked not to be identified.

“They had eaten at Popeye’s chicken; they’d spent hundreds of dollars at Burlington Coat Factory; a 7-11; a Safeway - I can’t believe that my bank didn’t call me when all these out-of-state transactions started coming through on my account,” said the woman, who declined to name her bank.

Hanceville Dairy Queen owner Rex Jordan said the thefts have taken a major toll on his business, as word of the crime has begun to take on a life of its own.

“I thought at first that this was an isolated case, but then it just started snowballing,” said Jordan. “My main concern now is that we get the word out so our customers know that we are doing something about this; that we are cooperating with local and federal investigators. It is hurting our business, obviously, but people have been understanding as we try to work through this. It’s limited only to debit cards; credit payments haven’t been affected, and that’s important to distinguish for us.”

Rodgers confirmed that no activity had been detected on transactions processed with a credit card at Dairy Queen or any other Hanceville business.

“All this is debit cards,” said Rodgers. “It’s not affecting regular MasterCard or Visa or other payments that are processed as a credit card. We have advised the Dairy Queen to post signs instructing customers temporarily not to use their debit cards. No one should be overly alarmed. Other forms of payment are fine to use, and we want people to continue to give them their business. People just need to use another form of payment for the time being.”

Jordan said card transactions account for approximately one-third of the restaurant’s daily business.

“Both types cards count a lot toward our daily sales, and when something like this happens, it has a big effect on not just our business, but our customers as well.”

“But,” he added, “something is being done to resolve this, and I want that to get across to people. Law enforcement has been responsive and fantastic about investigating this, and we are in communication throughout the whole thing.”

Hanceville mayor Kenneth Nail said people and businesses affected by the fraud have cooperated fully with the investigation.

“The Dairy Queen here has worked with us in every way they could, and people are really being very understanding and cooperative when you consider what they’re going through,” said Nail. “Our officers have begun coordinating with other agencies in order to bring some big guns in here who can investigate fraudulent activity of this magnitude - I don’t know of any local police department that would be equipped to deal with this on their own.”

* Benjamin Bullard can be reached by e-mail at bbullard@cullmantimes.com, or by telephone at 734-2131, ext. 270.

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