Credit unions in central Massachusetts reported a rash of fraudulent debit card transactions March 8 in what appears to be a widening scandal involving the exposure of credit and debit card account information on hundreds of thousands of U.S. consumers.
Police in Leominster and Fitchburg, Mass. are investigating the fraudulent transactions reported this week by local residents who bank at area credit unions.
The transactions, in countries like Spain, Russia and Zaire, may be linked to a security compromise at a U.S. retailer that has prompted banks across the country to reissue debit cards in recent weeks, according to police spokesmen.
A spokesman for the FBI said the agency was looking into the Massachusetts cases and may add them to a growing investigation of debit card fraud that the agency is working on.
Police in Fitchburg began receiving dozens of complaints of fraudulent transactions on March 6, said Police Sgt. Glenn Fossa.
As many as 147 accounts at one credit union were possibly breached, and reports quickly came in from a number of area credit unions including IC Credit Union and Workers Credit Union, he said.
The transactions were mostly in small amounts both inside and outside the United States, and appeared to involve debit cards that had been cloned. Fraudulent activity was spotted in Arizona, but also St. Petersburg, Russia, he said.
The Massachusetts Office of Consumer Affairs issued a warning last week to consumers to be on the lookout for unauthorized debit card transactions.
That warning mentioned the danger of both credit card "skimming" scams, and security breaches at U.S. retailers.
As many as six credit unions appear to be involved in the latest scams, said Chris Goetcheus, a spokesperson for the Massachusetts Consumer Affairs Office.
The Charlotte, N.C., office of the FBI is investigating similar debit card fraud in both California and North Carolina, and will look into the Massachusetts incidents, said Ken Lucas, an FBI spokesman.
The FBI in Charlotte is still trying to judge the dimensions of the breach, which may involve one or more retailers or banks, he said.
"Right now, were looking at everything and anything involved in the investigation. We dont want to narrow it down to one, two or three companies. We just want to see what is out there," he said.
The indications are that the problem is widespread. In recent weeks, banks across the country have reissued credit and debit cards to customers, citing the possibility of fraud, including Bank of America, Citibank, Washington Mutual, Regions Bank and others.
Citibank confirmed recently that it is monitoring an untold number of customer accounts for evidence of fraud in Canada, the UK and Russia.