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New debit card fraud tied to West Coast case

By Greg Sandoval
Staff Writer, CNET News.com

Published: March 7, 2006, 4:12 PM PST

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A spate of fraudulent debit card charges in Massachusetts, New Mexico and Bermuda is being linked to a case that led some West Coast financial institutions last month to replace 200,000 cards.

Citibank, a major issuer of debit and credit cards, has "detected several hundred fraudulent cash withdrawals in three countries," spokesman Robert Julavitis wrote in an e-mail Tuesday. The bank told customers the thefts are a result of an information breach at a "third-party business" that it did not name.

Meanwhile, at least seven financial institutions in Western Massachusetts reissued debit cards last week after hundreds of customers noticed charges on their accounts from places like Barcelona, Spain, Pakistan and Romania, said Christopher Goetcheus, spokesman for the state's Consumer Affairs Office.

The situation prompted Goetcheus' office and the Division of Banks to release a joint statement urging debit card holders statewide to check their accounts for fraudulent activity.

Two banking sources, speaking on condition of anonymity, said the recent cases are tied to the massive debit-card replacement on the West Coast last month. In that case, Bank of America, Washington Mutual and other banks notified customers that a security breach at an undisclosed merchant had forced them to take precautions.

Sources told CNET News.com that the West Coast investigation found that a large number of people whose debit cards were compromised had previously shopped at office-supply chain OfficeMax.

Police in Leonminster, Mass., a community 40 miles west of Boston, say their investigation has also turned up a link to OfficeMax.

The Leonminster Police Department has received 29 complaints of debit-card fraud since last week, said Detective Scott Wolferseder. Wolferseder said he's interviewed at least eight of the victims, and each one had shopped at OfficeMax in the last six months.

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"I thought that the thefts may have involved a skimming device installed at local ATMs," Wolferseder said. "Now I'm following up this OfficeMax connection."

Wolferseder cautioned that it's still too early in the investigation to draw any final conclusions.

Bill Bonner, OfficeMax's spokesman, said the company has no indication that it suffered a security breach. He declined to comment about the findings of the Leonminster police.

A representative of the FBI's Charlotte, N.C., bureau, which is overseeing several debit card fraud cases, including those on the West Coast, was unavailable for comment.