Credit-card experts explain the extent of Obama’s deception

posted at 1:12 pm on October 29, 2008 by Ed Morrissey

After writing twice about the deliberate decision by the Barack Obama campaign to avoid validation checks on credit-card contributions, I’ve heard from a number of people in the credit-card industry on how this works.  Two explanations in particular explain the depth of deliberation and deception involved in disregarding address and security-code verification.  The first explains that Team Obama probably didn’t just opt out of using these verification processes, but more likely rewrote the code on their site to bypass them, emphases mine:

I have over 30 years of experience in investigating Credit Card Fraud and I can tell you, which you may or may not know, that the merchant acquirer that is conducting the collection of credit / debit card for the Obama campaign are responsible for the actions to be taken regarding the Address Verification System responses.  The value of the AVS system is that the issuer of the card being used provides back to the merchant acquirer a response based upon the information provided during the authorization process.  This response indicates to the merchant acquirer if the card information was validated as to ownership of the account.  It is the merchant acquirer that determines what to do when the authorization response is received.  In most cases the transaction that comes back with any negative meaning is denied.  However, if the merchant acquirer has adjusted their system to accept any response as acceptable the transaction would be completed.

The value of the AVS system is to deny Card Not Present transactions (CNP) which are suspicious.  This protects the merchant against charge backs for bad transactions.  What is interesting to me is that the merchant acquirer has knowingly violated a basic CNP fraud prevention technique to accommodate a merchant (Obama Campaign).  I think that both the Associations (VISA & MasterCard) would be highly interested in looking at the merchant acquirer that was processing these transactions.  The value of ignoring the AVS responses is that multiple invalid transactions may be made without fear of being rejected by the authorization systems.  This means that the real owner of the credit card account is willing to allow multiple transactions to be made on the account using different names and addresses that under normal conditions would be denied.  The merchant acquirer has a complete listing of all transactions done and it would be very interesting to see how many transactions were conducted on the same account number using different names.  I would think that this would be a Federal violation under the current campaign funding laws.

Another fraud-prevention veteran notes that Team Obama has at the least provided a testing ground for thieves looking to validate responses:

You may have mentioned this elsewhere, but disabling the security allows would be credit card thieves to “ping” numbers till they get a hit.  The number of “pings” should have raised flags at Visa and MasterCard, don’t you think?

I wonder if they warned the Obama campaign, or worse, ignored it.

In other words, a crook could simply type in random numbers until he found one sequence that worked in some fashion.  That could give a thief a starting point for committing credit-card fraud.  If all they had to do was type nonsense values for names and addresses, such as Doodad Pro, they could quickly determine which numbers were valid — and they could probably program bots to do that kind of work.

Thanks to Team Obama, millions of people now have to wonder whether they’ve been victimized by credit thieves.  Some of us wonder if the thieves aren’t really working at Team Obama in the first place.


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gee, mebbe duh1 will adress this during his 1/2 hour comedy show tonite …

/who would give me THOSE odds?!
:-)

Buckaroo on October 29, 2008 at 1:16 PM

Racist!

dmann on October 29, 2008 at 1:17 PM

Victory by any means…

Just wonder what kind of shenanigans he’ll pull AFTER he gets into office!

stonemeister on October 29, 2008 at 1:19 PM

Not cool.

BadgerHawk on October 29, 2008 at 1:19 PM

“stonemeister on October 29, 2008 at 1:19 PM”

there is a simple way to prevent that!!

Buckaroo on October 29, 2008 at 1:19 PM

Just another “distraction”
/sarc

brtex on October 29, 2008 at 1:20 PM

In other words, a crook could simply type in random numbers until he found one sequence that worked in some fashion.

Or have any waiter or waitress write down the numbers…or any cashier…
Hmmmm, if we can do that this weekend, I am not suggesting it, but could that throw a monkey wrench in the whole system.

right2bright on October 29, 2008 at 1:20 PM

The magic is in prepaid gift cards; not multiple charges to the same card under different names.

lorien1973 on October 29, 2008 at 1:20 PM

Deception? Isn’t the better word fraud?

Blake on October 29, 2008 at 1:20 PM

This is what we can expect if this jackass is elected! Broken glass, people!

bopbottle on October 29, 2008 at 1:20 PM

In other words, a crook could simply type in random numbers until he found one sequence that worked in some fashion.

Anyone who knows how CC numbers are formed would laugh at this. It’s exceedingly difficult to derive a functional 16 digit number (and an expiration date). There are easier ways to go about this.

lorien1973 on October 29, 2008 at 1:21 PM

I’m hoping that, during tonight’s infomercial, Osama Obama acknowledges the contribution such stalwarts as Doodad Pro and Adolfe Hitler have made to his success.

Since he refuses to give Bomber Billy Ayers, Wrighht, Khalidi, Rezko, Soros and Karl Marx their due for making him the slimeball he is today, he should at least mention the “little people” who have sacrificed so much to break the law on his behalf.

MrScribbler on October 29, 2008 at 1:21 PM

Redistribution by ANY means – MAC needs to jump on this immediately. Use a visa ad

Greek columns for flowery, empty speech = $ 5,000,000

Entertainment to attract screaming crowds = $3,000,000

Being able to tap into anyone’s credit limit, without their knowledge or authorization =PRICELESS !

Then close with… Barak Obama, Redistribution of wealth by ANY means.

stenwin77 on October 29, 2008 at 1:21 PM

lorien1973 on October 29, 2008 at 1:21 PM

Addition:

He’s actually referring to users getting a list of known “good” credit card numbers and trying them all till one gets an approval code.

lorien1973 on October 29, 2008 at 1:22 PM

Some of us wonder if the thieves aren’t really working at Team Obama in the first place.

Understatement of the year, Ed.

*eats*

Grue in the Attic on October 29, 2008 at 1:23 PM

In other words, a crook could simply type in random numbers until he found one sequence that worked in some fashion.

The campaign claims they are checking things on the back end. But how would they catch this? All they could do is find phony looking names or see that a person had already given the max.

How frustrating that the MSM can’t ask questions about this and just repeats the campaign’s talking points about checking things in a different way. Now would be a good time to hypothesize wildly and make the campaign disprove claims of fraud.

I can dream, can’t I?

MamaAJ on October 29, 2008 at 1:23 PM

Wow, so Obama’s running his infomercial with ill-gotten money?

marklmail on October 29, 2008 at 1:24 PM

racist

D2Boston on October 29, 2008 at 1:24 PM

Just wonder what kind of shenanigans he’ll pull AFTER he gets into office!

stonemeister on October 29, 2008 at 1:19 PM

He’s a Chicago polition. Need you ask?

NeighborhoodCatLady on October 29, 2008 at 1:25 PM

Should this ever get investigated (yeah, right), I’d be curious to see how much of the money he filched and slid in under the radar was from off-shore….

…buck up, America…the MessiahFuerher can do no wrong…his heart is pure, his actions are holy, and his fecal material does not stink….

Puritan1648 on October 29, 2008 at 1:25 PM

folks, please hit the Yahoo buzz upon these stories so they might get the attention they need.
better still buzz it and e-mail to a few friends.

neal7 on October 29, 2008 at 1:25 PM

it would be very interesting to see how many transactions were conducted on the same account number using different names. I would think that this would be a Federal violation under the current campaign funding laws.

I mentioned this in an earlier thread. It’s not just Obama’s team breaking the law, it’s the unique card end-user doing the same thing if:

#1 Donations over $200 have fraudulent names
#2 Donations from a single card are over $2200

natesnake on October 29, 2008 at 1:26 PM

Some of us wonder if the thieves aren’t really working at Team Obama in the first place.

Some of us don’t doubt it.

ronsfi on October 29, 2008 at 1:26 PM

Obama’s campaign lied about this to the Washington Post, claiming they believed that VISA and MasterCard don’t even have the ability to verify a credit card based on address.

Yes, they used the weasel word “believe”, I’m not even making it up. These people are frauds and they know it, but don’t care.

@ED: You’re missing a very big point here:

The way Obama’s campaign has set this up, they have been able to use fraudulent donations as a line of credit to finance the campaign all year, then repaying that line of credit when they refund donations they find to be illegitimate, sometimes months later.

Seixon on October 29, 2008 at 1:27 PM

Thanks to Team Obama, millions of people now have to wonder whether they’ve been victimized by credit thieves. Some of us wonder if the thieves aren’t really working at Team Obama in the first place.

Front Page News IMO…

CliffHanger on October 29, 2008 at 1:27 PM

Behold the Decree of OFraud, Grand High King of Duplicitousness, Defrauder of God Himself (Funds Be Upon Him):

“That is not the credit card fraud I knew. Cease these investigations at once or face litigation. This does not help Michelle’s kids.”

BKennedy on October 29, 2008 at 1:27 PM

This Guy needs to be Tar’ed & Featherd and,
Run Out of town on a Rail!!

Send him Back to “Kenya” Were he was born..

Capt-Dax on October 29, 2008 at 1:27 PM

Even as someone who appreciated what Ron Paul brought to the political table, I thought his campaign was doing this same sort of fraud.

The internet allows fraud on a massive scale to go undetected. I guarantee you that most of Paul’s ‘money bomb’ was from a single source wealthy entity that donated everything to his campaign during these events.

ThackerAgency on October 29, 2008 at 1:29 PM

As I mentioned earlier Obama’s crew could care less. They have been through the foreign donor scandal with Clinton. What they learned from that is nothing really happens. If Obama wins this is but a small price to pay.

The end justifies the means is an age old leftist mantra. So what if a massive fraud is committed, if it spawned criminals etc–a small price for Obama.

Even if charges were brought, there won’t be, Obama will claim no knowledge. In fact I’ll bet even money that Obama and crew have run their program through their legal team who gave approval that the loophole existed so they can’t be prosecuted.

After the election they will claim they are cleaning up the system by closing the loophole. Pelosi will give a press conference. The fans will cheer.

patrick neid on October 29, 2008 at 1:32 PM

Proudly repeating a comment from last week

But, before that: Ed: you can’t hit many visa numbers by trying them randomly. There’s made 4 + 12 digits long specifically to make success at this improbable.
—-

If Obama wins any money problems the campaign has will simply disappear: access to power is, after all, highly saleable and a win will place him clearly above the law.

If he loses, however, I predict that we’ll see his wing of the democratic party undergo the biggest financial disaster anyone’s ever seen in a political party.

Here’s why: if he loses, donor fraud will become a big issue – and when some of his donors discover that lots of people who really didn’t donate are protesting charges made against their credit cards, they’ll follow suit. So if around 5% of the donations he’s collected in the last two months of the campaign turn out to have been charged illegally, another 5% turn out to have exceeded legal limits or come from ineligible donors, and 5% of legitimate donors get on the bandwagon to repudiate charges – he could be facing a 40+ million dollar shortfall.

Worse, since his campaign accepted illegal donations and contracted for television time and other campaign goods and services on the basis of those revenues, there are both bankruptcy and “proceeds of crime” issues to be considered.

On two of these issues: excess or illegal donations and donations obtained through fraudulent card use, the critical legal issue will be whether or not the campaign applied normal business practices to verify the origin and legitimacy of the payments.

I believe that the Obama campaign relies mainly Paymentech’s “Orbital” merchant payment technology – and that technology has four main features of interest in this context:

the web payments system (software plus services) is treated as a virtual device with every customer implementation assigned a unique identifier just as if it were a physical device like the visa terminals you see in stores. That identifier enables access to the normal banking records system. As a result, the customer has immediate, on-line, access to all transactions data from the current, and six preceeding, months.

As a result the Obama campaign could trivially produce lists of donors sorted by card, date, amount – with subtotals by card holder.

It actually is possible (although deprecated and risky) to process transactions with nothing more than a card identifier (including date) and without authentication from either the AVS (Address Verification System) or CVS (Cardholder Verification System) – basically you just turn off all reasons for declining a transaction other than account verification.

This is considered poor practice, in large part because it makes it easy for people with access to other people’s card information to commit theft, and the Paymentech people would have repeatedly warned the Obama campaign against doing this.

the system automatically warns of same day duplicated transactions with user selectable parameters governing what has to be duplicated to count – so it’s easy to set it to warn if the same card number is used with more than one address or name even if you choose not to use any of the available security checks (AVS/CVS/CID/CVV2/CVC -a whole bowl of alphabet soup) before accepting a transaction.

In other words, the Obama campaign would have to willingly ignore or bypass automated alarms if someone made multiple donations on the same card on the same day.

Merchants have the option of either creating or updating a user profile when a card is used on their site (or in their store). These profiles include (from AVS and other sources) the customer’s name; address; card type and number; along with the transactions amounts and unique IDs.

In other words, just about everything the FEC requires could be produced through some limited post processing of prepackaged reports already available from Paymentech.

Bottom line? Willfull blindness to abuse – and if he loses, that, coupled with the actual cash shortfall in the campaign, could sink everyone involved.

Paul Murphy on October 29, 2008 at 1:34 PM

No investigation………………. all the records of the transactions will be sealed.

Move along folks, he is a Democrat, it is his “right” to lie, cheat, and steal.

…………… didn’t you know that?

Seven Percent Solution on October 29, 2008 at 1:36 PM

Is there any way to force the Obama campaign to give the name of the person who wrote the code allowing this – and at whose direction?

justincase on October 29, 2008 at 1:36 PM

There’s only one reason why the Obama campaign would deliberately bypass the security systems: they want to receive illegal donations. How many millions, or more likely, how many tens of millions of dollars, has Obama received from foreign donors or donors who’d already given the maximum allowed by law? And despite all the publicity, the FEC sits by and does nothing.

This is an outrage.

AZCoyote on October 29, 2008 at 1:37 PM

NEW RNC AD COMING IN …..3……2……1……

FiveWays on October 29, 2008 at 1:38 PM

I know my credit card is safe…it never came near an Obama website…

JetBoy on October 29, 2008 at 1:39 PM

Thanks to Team Obama, millions of people now have to wonder whether they’ve been victimized by credit thieves. Some of us wonder if the thieves aren’t really working at Team Obama in the first place.

I can almost feel the cringe here, but here it goes….

First class cool campaign team.

Mcguyver on October 29, 2008 at 1:39 PM

I know my credit card is safe…it never came near an Obama website…

JetBoy on October 29, 2008 at 1:39 PM

I know my credit is safe, I don’t have a card :P

*eats*

Grue in the Attic on October 29, 2008 at 1:39 PM

If you were an enemy of the U.S. and could easily flood massive amounts of money to the candidate you wanted in office why wouldn’t you do it? If you could decide the who the President of the U.S. is wouldn’t you do it?

If the U.S. (or England or France) could fund (without being caught) the opposition leader to run for election in Iran or Russia or Venezuela or where ever wouldn’t they do it? Of course.

So why wouldn’t Iran or Russia or Venezuela or Cuba or China be doing this in the U.S. Presidential election? What if all these questionable hundreds of millions of Obama donations are coming from Iran or Russia or China or other unfriendly country?
Doesn’t the CIA or State Department or President even think of these possibilities and investigate?

albill on October 29, 2008 at 1:41 PM

it would be very interesting to see how many transactions were conducted on the same account number using different names. I would think that this would be a Federal violation under the current campaign funding laws.

I mentioned this in an earlier thread. It’s not just Obama’s team breaking the law, it’s the unique card end-user doing the same thing if:

#1 Donations over $200 have fraudulent names
#2 Donations from a single card are over $2200

natesnake on October 29, 2008 at 1:26 PM

Yes – see (I know blowing my own horn again) my zdnet blog on “Associative arrays and elections data”
http://blogs.zdnet.com/Murphy?p=1279

Answer: trivial to do – and (not in the blog) since issuers track purchases, any gift cards purchased using credit or debit cards can also be tracked to the original buyer.

Not, however, to the donor: If i buy a card for my son, and he gives money to Obama (God Forbid that would ever happen!) Visa can show I bought the card, but not who gave the money.

Paul Murphy on October 29, 2008 at 1:41 PM

folks, please hit the Yahoo buzz upon these stories so they might get the attention they need.
better still buzz it and e-mail to a few friends.

neal7 on October 29, 2008 at 1:25 PM

Ed, that Yahoo Buzz Up button needs to be more prominent!

neal7 on October 29, 2008 at 1:42 PM

Some of us wonder if the thieves aren’t really working at Team Obama in the first place.

I think more research needs to be done into this Gialliounous family in Chicago and Obama’s ties to them. Internet credit card fraud is right up the Mobs alley

jp on October 29, 2008 at 1:42 PM

you know, the way Americans fear Credit Card fraud these days. this could be a really good issue to attack Obama on

jp on October 29, 2008 at 1:43 PM

Bottom line? Willfull blindness to abuse – and if he loses, that, coupled with the actual cash shortfall in the campaign, could sink everyone involved.

Paul Murphy on October 29, 2008 at 1:34 PM

Paul, so what you are saying… if there is a weird transaction on the card (whom evers card) and if Obama loses. More or less calling the Card Company isn’t going to do anything and you are going to have to eat it and pay it.

Well that makes for a great day!

upinak on October 29, 2008 at 1:44 PM

How much money do you think Lybia and Ghadaffi are giving to Obama?

jp on October 29, 2008 at 1:44 PM

Democrats are just Republicans who haven’t been mugged yet. Well, consider yourselves mugged.

Laura in Maryland on October 29, 2008 at 1:45 PM

it would be very interesting to see how many transactions were conducted on the same account number using different names. I would think that this would be a Federal violation under the current campaign funding laws.

Lord forbid, but if Obama should win and his internet fund raising does end up investigated and reveals federal violations of the law, what is the potential outcome? Has Axelrod set someone up to be the fall guy? Does the buck stop at Obama since he has stated that running his campaign is evidence of his executive experience?

Texas Gal on October 29, 2008 at 1:45 PM

Any questions about where that $100K came from that was “suddenly” donated to Michelle Bachman’s opponent?

Mr_Magoo on October 29, 2008 at 1:46 PM

The Strange Case of Dr Obama and Mr Hussein is a real life drama playing out in the Presidential election of 2008. It is about the dilemma of the American voter who sees strange dissonances between the new found Messiah, Dr Obama, and the misanthropic Mr. Hussein. It is a vivid portrayal of a split personality, split in the sense that within the same person there is both an apparently good and an evil personality each being quite distinct from each other; in mainstream culture the very phrase “Obama and Hussien” will come to mean a person who is vastly different in moral character from one situation to the next.

Sigmund on October 29, 2008 at 1:46 PM

Learning more about credit card processing than a person ought to know. Thanx Obama for performing another valuable public service.

eaglewingz08 on October 29, 2008 at 1:47 PM

“I did not have sex with that woman…”

“I did not deliberately decide to avoid validation checks on credit-card contributions…”

Mr_Magoo on October 29, 2008 at 1:48 PM

Laws just have to be broken in order to bring about a socialist utopia with reeducation camps for capitalists.

Riposte on October 29, 2008 at 1:48 PM

I don’t see how this benefits Michelle-my-belle’s kids…

Unless after the coronation, the leftovers get deposited into their college education accounts.

Illegal you say! What’s another crime when you’re already neck deep in the hole!

ajrystad on October 29, 2008 at 1:48 PM

Sigmund on October 29, 2008 at 1:46 PM

-applause-

*eats*

Grue in the Attic on October 29, 2008 at 1:49 PM

Smells like Team Spirit!

Dr Evil on October 29, 2008 at 1:49 PM

Senator Credit Card

Mr_Magoo on October 29, 2008 at 1:49 PM

The internet allows fraud on a massive scale to go undetected. I guarantee you that most of Paul’s ‘money bomb’ was from a single source wealthy entity that donated everything to his campaign during these events.

ThackerAgency on October 29, 2008 at 1:29 PM

NY Sun back during February

Secret Money Floods Campaigns

According to an analysis being released today by a Washington think tank, the Campaign Finance Institute, Senator Obama of Illinois led the pack with such small and secret donations, pulling in about $31 million during 2007. Rep. Ron Paul ran second in small gifts, raking in more than $17 million. At the end of the year, Senator Clinton and John Edwards, who has since dropped out, were essentially tied for third in unitemized, small contributions, with each candidate raising about $11 million.

——–

However, one area of concern with the flood of donations, particularly those made online, is that foreigners could be weighing in illegally in an American election. Mr. Obama’s Web site allows donors to choose an address in one of 227 possible countries or territories, including Iran, Iraq, Zimbabwe, and Yemen.

Mr. Paul’s site is even more embracing, permitting addresses in Syria and the “Occupied Palestinian Territories.” Michael Huckabee’s Web site seems to require an American address to make a gift. Donors to Senator McCain need to put in a ZIP code of some sort, but not a state.

and of course this was before the now known AVS issue, much less making up names and giving under 200 mulitple times.

funny that America’s enemies would want to elect those touting the marxist view of “american imperialism” and their preferred american foreign policy.

jp on October 29, 2008 at 1:49 PM

How much money do you think Lybia and Ghadaffi are giving to Obama?

jp on October 29, 2008 at 1:44 PM

Not a penny, but Mickey Mouse is a whole ‘nother story ;)

Laura in Maryland on October 29, 2008 at 1:50 PM

Right out of commie Saul Alinsky’s handbook (Obama’s bible): the ends justifies the means.

They really thing they’re clever with all these illegal, skirting-the-rules tactics.

We will…take…them….down.

Let’s roll!

ex-Democrat on October 29, 2008 at 1:51 PM

Oopsie! Your 401Ks have all been transferred the Social Security System General Fund.

Mr_Magoo on October 29, 2008 at 1:51 PM

Paul, so what you are saying… if there is a weird transaction on the card (whom evers card) and if Obama loses. More or less calling the Card Company isn’t going to do anything and you are going to have to eat it and pay it.

Well that makes for a great day!

upinak on October 29, 2008 at 1:44 PM

NO, quite the contrary: I’m saying that if he loses a lot of people will repudiate those charges -leaving him facing a huge deficit and potential fraud charges.

Paul Murphy on October 29, 2008 at 1:51 PM

Worse, since his campaign accepted illegal donations and contracted for television time and other campaign goods and services on the basis of those revenues, there are both bankruptcy and “proceeds of crime” issues to be considered.

If some vendors are “friends”, they won’t press to get paid. Or they could write off the debt and conveniently get a big new account from someone with deep pockets.

There will be a money trail to follow. Whether anyone can or will remains to be seen.

MamaAJ on October 29, 2008 at 1:51 PM

Doesn’t the CIA or State Department or President even think of these possibilities and investigate?

With any luck, it’s being quietly investigated right now, will be brought to fruition on Monday with arrests to follow Monday night.

Did I mention my name is Pollyanna?

tru2tx on October 29, 2008 at 1:52 PM

Perhaps a light bulb is going on somewhere in this country?

Mr_Magoo on October 29, 2008 at 1:53 PM

Donors to Senator McCain need to put in a ZIP code of some sort, but not a state.

A zip gives specific city and state information right down to which part of town you live in.

Laura in Maryland on October 29, 2008 at 1:53 PM

Has there ever been a candidate with more baggage with him than Obama? No really. You couldn’t get elected Neighborhood Association Parliamentarian with 1/3 of the crap this guy has surrounding him.

Has America really come to this?

Sugar Land on October 29, 2008 at 1:53 PM

Anyone who knows how CC numbers are formed would laugh at this. It’s exceedingly difficult to derive a functional 16 digit number (and an expiration date). There are easier ways to go about this.

lorien1973 on October 29, 2008 at 1:21 PM

Actualy, if they are not locking out your sessions for bad numbers, you can run multiple subroutines to from a single IP… each would have a different session established, thus a different socket number…

You could run thousands a time from a single properly configured computer… only things slowing you down would be the response time from the computer you were asking.

Automate it to run 24/7 for months, and you could harvest MILLIONS of real credit cards…

Romeo13 on October 29, 2008 at 1:56 PM

also from that article on the foreign donations

Spokesmen for Mr. Obama and Mr. McCain did not respond to inquiries about their screening system for gifts coming from abroad. The donation pages for all the candidates remind donors that they must be American citizens or legal residents. Mr. Paul’s site also has a pop-up feature which asks any donor with a foreign address to confirm American citizenship.

However, an aide to Mrs. Clinton suggested that these mechanisms do not go far enough. “A foreign national could misrepresent his or her citizenship when contributing online, by checking the box…when such a representation is not true,” the aide, who asked not to be named, said.

The former first lady’s caution in the area is understandable since during and after President Clinton’s re-election bid in 1996 the Democratic National Committee was forced to return more than $3 million, including tens of thousands of dollars federal investigators traced to China.

jp on October 29, 2008 at 1:56 PM

this is an obvious RICO conspiracy, what are odds its ever pursued and culprits named?

should be able to find out the computer programmers the Obama camp has paid though, right???

jp on October 29, 2008 at 1:57 PM

This is typical of the election cycle to date. The Obama people tread on the edge of criminal but little gets reported and nothing is done. At this point all they are doing is playing defense until next week. Then they figure that it won’t matter if the s— hits the fan.

duff65 on October 29, 2008 at 2:02 PM

duff65 at 2:02PM
Who would be responsible for investigating this from a legal standpoint, and who can report it to make sure it is being investigated?

justincase on October 29, 2008 at 2:05 PM

I doubt very seriously there is much in Obama’s online donations that is related to idenity fraud or fake card numbers. This is real money on real cards, probably prepaid cards, coming if from outside the USA. It’s too obvious.

Texas Gal on October 29, 2008 at 2:05 PM

Could this make Obama or his campaign a target of a lawsuit?

thirteen28 on October 29, 2008 at 2:09 PM

This is NOT helpful to Michelle’s children!

Prufrock on October 29, 2008 at 2:09 PM

I would like to add that the use of random generated account numbers is not difficult if you have the first six digits. However, with the event of phishing and carding sites (where stolen account information is sold) it is not difficult to run numbers through a de-fanged system.

If Chase is the bank that is accepting these transactions on behalf of the merchant they are going to be in a great deal of trouble when the transactions submitted are charged back due to unauthorized use. The cardholders whose accoutns were misused will be made whole by their card issuer, who in turn will be made whole by the merchant processor. These leaves the merchant processor holding the bag for the merchant.

Viking6 on October 29, 2008 at 2:10 PM

I know my credit card is safe…it never came near an Obama website…

JetBoy on October 29, 2008 at 1:39 PM

If it’s ever been used anywhere, the number could have been snagged for later re-use. By bypassing more-or-less every fraud prevention check available in the system, the campaign encourages anyone with a cache of valid CC numbers to use them for donating. You don’t need any other information except the expiration date. Don’t need the name, the code on the back of the card, the cardholder’s address… nothing.

We’ve already seen documented cases of people having $2300 donations showing up on their cards when they never donated.
Expect a massive flood of these at the <$200 level now that the word is out that fraudulent transactions are accepted as donations.

You could be next. Check your online statements. If you wait for the hard-copy, it may be a fait accompli by the time you get around to disputing the charge.

If you don’t have online access, call your card vendor and check over the phone.

VekTor on October 29, 2008 at 2:12 PM

Who would be responsible for investigating this from a legal standpoint, and who can report it to make sure it is being investigated?

justincase on October 29, 2008 at 2:05 PM

I’m no legal expert but it would seem that the Justice Department has ample grounds to investigate ACORN and interstate credit card fraud would also seem to be an area where the feds should have jurisdiction.

duff65 on October 29, 2008 at 2:12 PM

Gaming the Visa card system? Isn’t that a little blatant? I know that the Obama Team are arrogant, but to delve so deeply into making it possible for illegal contributions to be made-that borders on stupid, and I don’t think Obama is stupid. He wouldn’t allow such nefarious financial cheating to come within a mile of his campaign, would he?
Especially when he has a war chest of millions of properly donated dollars-twice and again more than he even needs.
I know the argument will be made that the crooks just couldn’t help themselves…but I don’t know-the White House is a pretty big prize to lose because of financial malfeasance. Color me skeptical.

Doug on October 29, 2008 at 2:13 PM

Hussein, Hussein.

Someone will be taxing my money away from me,
Money that I will earn but will never see,
In all things I do he will interfere,
All I know is it will be trouble as soon as his presidency appears.

Mister Hussein, Mister Hussein, Mister Hussein, Mister Hussein, Hussein.

If the voters drink his potion the countries character will undergo big change,
The whole nation he will rearrange,
This strange transformation will take place directed at we,
Instead of what was God knows what we will see…

Mister Hussein, Mister Hussein, Mister Hussein, Mister Hussein, Hussein.

If he’s elected we will see the real he,
At this stage it’s becoming clear what he will be,
The charismatic fellow who’ll buy you all you can drink,
Then when he’s got his presidential power he’ll change in a wink

into…

Hussein, Mister Hussein, Mister Hussein, Mister Hussein, Hussein.

MB4 on October 29, 2008 at 2:14 PM

Who would be responsible for investigating this from a legal standpoint, and who can report it to make sure it is being investigated?

justincase on October 29, 2008 at 2:05 PM

Wire fraud? Secret Service.

Conspiricy? FBI.

Sarbains Oxley? Fed Prosecutors, SEC.

International Threat to the Election Process? CIA?

Romeo13 on October 29, 2008 at 2:14 PM

NO, quite the contrary: I’m saying that if he loses a lot of people will repudiate those charges -leaving him facing a huge deficit and potential fraud charges.

Paul Murphy on October 29, 2008 at 1:51 PM

Ok I misunderstood you. Thank you for replying.

upinak on October 29, 2008 at 2:15 PM

Since there is no legitimate reason why a person would want to donate under a false name, and since that is exactly what the Obama campaign apparently sought to facilitate, you’d think the MSM would be a little more curious about the Obama staffer or staffers who came up with this extraordinary fundraising/campaign finance law evasion policy.

Or would you?

Infidoll on October 29, 2008 at 2:16 PM

If card no’s were stolen, I think this would have come out long ago from cardholders complaining.

So, how to get numbers of accomplices who won’t blab for funneling your money?
1) Apply for cards that are actually phony and get them approved, or
2) Have absolute control over the people who hold the cards.

This sounds like a foreign operation – a ruthless one.

(I think that even bribes to US citizens as hush money would leak)

tomg51 on October 29, 2008 at 2:16 PM

This is the way you make a banana republic, folks. You elect people who believe the ends justify the means, let them get away with illegal things for a few elections, and pretty soon you have the full-fledged crooks running everything including the White House and Congress.

We’re well on the way… the Democrats have evolved from playing hardball, to playing dirty ball, to running a criminal enterprise.

drunyan8315 on October 29, 2008 at 2:18 PM

Dateline January 22, 2009: In a good-faith effort to dispel questions from the Federal Election Commisssion about campaign donations from Adolfe Hitler, President Barack Obama traveled to Germany on O-Force One to place Mr. Hitler’s refund in his tomb. Other campaign donations from unknown donors will be refunded from the Supplemental Social Security Fund, formerly known as 401(k) plans. President Obama has issued a Presidential pardon to the programmers of his campaign website, who have accepted their pardons on condition of anonymity. President Obama expressed regret for the inconvenience caused by this accidental computer glitch. President Obama has temporarily suspended all future Presidential elections until this problem has been resolved, and has appointed a study commission whose final report will be presented to the President on April 1, 2029.

Steve Z on October 29, 2008 at 2:20 PM

This really is pretty shoddy. In and of itself, it might be shrugged off. But when you look at it in the context of the sheer magnitude of money being raised, the lack of transparency, the broken promise to take public funding, the lust for big campaign donations, and the deep and broad connection between the Obama campaign, big time lobbyists and major corporations, it is getting pretty ugly. The Axelrod/ATT connection is particularly troubling in light of Obama reneging on his explicit promise to fight Telecom Immunity, but then voting for it.

mw on October 29, 2008 at 2:24 PM

A presidential candidate who accepts federal funds automatically gets audited per FEC rules. A candidate who does not accept federal funds gets audited only if the FEC votes to do so.
 
Currently the FEC is split 3-3. So Obama will most likely skate.

Gideon7 on October 29, 2008 at 2:25 PM

OK people. It’s really easy to explain. I’ve been in the merchant services industry for over 3 years. And this is why the prepaid cards work for Obama:

The credit card payment system works on two sets of risks. The first risk is based on identity. Is the card holder the ACTUAL card holder? To offset this risk, a set of information on the card (embedded in the magnetic stripe) must match. Additionally there is another set of information about the card holder that is not embedded in the magnetic stripe. If the method of transaction compromises the integrity of the information on the magnetic stripe, like keying in the card number (card not present) and the info on the stripe is not accessed directly, or only a portion of the info is read (happens when the magnetic stripe is damaged), then additional information will be required to verify the identity of the true card holder. This information includes the numeric portion of the address, the zip code, and the CVV (the 3-digits on the back of the card and not included in the stripe). If this information does not match up to the information of the true card holder within a database, the card is not necessarily rejected. In most cases, the card transaction is assessed a higher processing rate which the merchant ends up paying. This is the first set of risk.

The second set of risk involves the ability of the card holder to pay in full the amount of the transactions. This is the PAYMENT RISK. After all, the payment is being made on credit. This risk can be realized immediately if the credit limit on the card has been reached by the transaction. If the card limit is not yet reached, then the risk cannot be realized until the card holder decides not to pay his credit card bill at the end of the month.

NOW HERE IS WHY prepaid cards work so well for Obama: Prepaid cards eliminate both the first and second risks. How?

Identity risk: whoever purchases a prepaid card is NOT required to fill in an application. No identity information required! The identity is the card number itself. The identity is the card issuer.

Payment risk: the card has already been paid for at the time of its purchase. This makes the card a debit card and not a credit card. Nothing about a debit card is based on credit. The only risk is making sure the card holder does not exceed the balance of the debit card. But remember that this risk can be realized immediately.

When donors use prepaid credit cards to pay Obama, it will be difficult (but not impossible)to know their identity, especially if they paid cash to purchase the card. The only way to know the identity is if the person who purchased the card used a real credit/debit card to pay for them. Then you’d have to check store records (or processor records) and trace each transaction back to the identity of the person who used a real card to purchase the prepaid cards. The name MICKEY MOUSE is not relevant when the true identity is the number of the card. I can put in any name because the system looks for the legitimacy of the card number, not the name. About the limit of the donation–I can buy $10K worth of prepaid cards each for $200. If I use all of my cards to pay for my donation, it won’t matter if I use the same name. The system will identify 50 different card numbers, or 50 different card holders. But who would be dumb enough to use the same name to exceed the donation limit?

Hope that helped. Any questions anyone?

Danilo on October 29, 2008 at 2:27 PM

Who would be responsible for investigating this from a legal standpoint, and who can report it to make sure it is being investigated?

The US Secret Service is still the lead Federal Agency for the investigation of transaction card fraud. Title 18 Section 1029. It would take multiple complaints for them to become involved. Generally it would be losses of more than $100,000 in the aggregate before they would look at it. Normally a local agency would start the investigation.

Viking6 on October 29, 2008 at 2:32 PM

MB4 on October 29, 2008 at 2:14 PM

What tune is that sung to? My mind keeps putting it to “Pinky and the Brain” but most of the lines are too long.

*eats*

Grue in the Attic on October 29, 2008 at 2:33 PM

Federal Election Commission, 999 E Street, NW, Washington, DC 20463
(800) 424-9530

In Washington (202) 694-1000

Put your money (eh hem) where your mouth is. Right now.

And, while we’re at it, we might want to contact the big credit card companies, too.

Mommypundit on October 29, 2008 at 2:36 PM

Maybe the MSM will realize they can increase their viewership by being fair and balanced. Plus they get the fun of digging up dirt on everybody!

Nah…

Mr_Magoo on October 29, 2008 at 2:38 PM

Viking, read my explanation above. There is NO legal stand point because even if you were to trace the person who purchased the prepaid cards with a real credit card, you can’t prove that it’s the same person who used the prepaids to donate. The purchaser of the prepaid cards could have eaily given the cards to anyone. The people given the prepaids to use for donation can put in any name.

Danilo on October 29, 2008 at 2:39 PM

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