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BY DAVID HENCH
MaineToday Media, Inc. 03/22/2008

MaineToday Media, Inc.

Unauthorized charges have started piling up on credit and debit cards exposed to fraud during a security breach at Hannaford stores, according to investigators.

Investigators say thieves have used the cards in southern states and along the East Coast, as well as in such far flung locales as Bulgaria, Italy and Mexico. The pattern, they said, suggests that whoever stole the data has most likely sold the information to another tier of crooks.

The U.S. Secret Service is leading the probe. However, local police may end up investigating individual cases of credit card fraud, and overseas transactions will fall to authorities in those countries.

Ever since Hannaford announced Monday that 4.2 million credit card and debit card numbers and passwords had been stolen between Dec. 7 and March 10, authorities have concentrated on alerting consumers.

The company says no personal identifying information was stolen, like names and addresses, but it urged residents to check their account statements for unfamiliar purchases and to contact their banks.

Portland police have had four cases of credit card fraud reported this week in which cards regularly used at Hannaford were found to have unauthorized purchases, said Sgt. Robert Martin, in the property crimes division.

One customer reported a series of gas station and convenience store charges in Texas and Alabama, and another had charges in Florida.

Two other cases involved unauthorized charges at national chains, and the location hadn't been determined. One of those was $1,200 at Best Buy. The cases differ from the typical credit card theft the department investigates, Martin said. In cases where a credit card is stolen from a purse or a car, the thief usually racks up large electronics charges at local stores within minutes -- before the card is reported stolen.

Police scan security video at the stores and can often spot a familiar face.

When the information has been stolen on a massive scale and sold outside the state, there's little local police can do, he said.

Police will forward the information to police where the fraud occurred in hopes they will investigate, but it's a long shot.

The emphasis this week by attorneys general in states affected by the theft -- in the Northeast and Florida -- has been to alert customers to the security breach and encourage them to contact their bank.

A spokeswoman for the Florida attorney general said the state's consumer fraud division had received 16 complaints that appear linked to the theft of data from the Tampa-based Sweetbay Supermarket chain, owned by Hannaford's parent company.

One was a $1,500 charge in Italy that the credit card company blocked, and another was $1,270 spent in Bulgaria which did go through, but the card company refunded the credit, said Sandi Copes. Charges at Bloomingdale's in New York City were thwarted by a canceled card.

Although the focus up front is protecting people's accounts, catching those who misuse the information remains an important goal, Copes said. Florida prosecutors working with the Gainesville Police Department broke up a gang that was using data stolen from Massachusetts-based retailer TJX Cos. to buy about $3 million in gift cards across the country. Members were sentenced last September.

Linda Conti, Maine's assistant attorney general in charge of the consumer protection division, said her office is not conducting a criminal investigation but will track the case to make sure Hannaford has alerted customers and had reasonable safeguards for its electronic information.

Chris Pinkham, president of the Maine Association of Community Banks, said banks monitor credit card use for fraud, which might explain why there has not been a significant increase in fraud reports.

Customers have reported getting telephone calls and e-mails from people purporting to be banks investigating the case or checking on their account. Pinkham said customers should never give financial information over the telephone or through the computer to someone who contacts them.

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