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I Team: Dade's Easy Card Becomes Easy Fraud



Installed last year at a cost of $42 million, the Easy Card system is supposed to make Miami Dade transit fast and simple. Regular riders can buy an Easy Card, load it up with cash, and then use it to get around the county.

You just swipe your card and go.

But for almost a year, the system allowed credit card thieves to buy thousands of dollars in Easy Cards -- and then sell them for cash to unsuspecting passengers.

And even though Dade County officials knew this was a potential problem -- they failed to install the security measures needed to stop it.

As a result, Miami Dade Transit's Easy Card became easy fraud

Take Monday June 21, for example. At 1:40 pm an individual using what appears to be a lost or stolen Visa, bought $200 worth of Easy Cards at the downtown Government Center.

Thirteen minutes later, at 1:53 pm, the same visa card was used at the Overtown Station to buy another $600 worth of Easy Cards.

By 2:10 p.m. the thief rode the train two more stations north to the Civic Center where they hit the Easy Card machine hard, racking up $3,000 in less than ten minutes.

Forty minutes after the spending spree began there were just under $4,000 in charges on a single credit card.

The next step is to convert the Easy Card to cash, selling them at a discount to unsuspecting passengers. As you can imagine, there are no shortage of folks who would pay $50 for a $100 Easy Card.

Not surprisingly, riders were dismayed, by the county's failure to protect them. Riders wondered why the county vending machines aren't equipped with the same safeguards you can find at any gas station pump – namely requiring credit card users to punch in their zip code before a purchase can be made.

"That doesn't make any sense," said Miriam Delgado, a transit rider. "If someone wants to do something with the system they are going to find a way [to cheat it], but I think they should think these things through prior to establishing a system such as this."

The county initially thought the problem was isolated at three of its 22 stations. But a transit study states, "Further analysis indicates fraudulent activity in all locations."

How much fraud? The county isn't sure, but in the last year credit card companies have demanded repayment from the county of $79,000 in charges.

Miami Dade Transit issued a statement to the I Team stating: "We are very concerned and are working to resolve this issue."

Karla Damian, a spokeswoman for Miami Dade Transit, said the county adopted the exact same system used in Atlanta and that the Atlanta system doesn't require an address verification system.

In an email she stated: "Following initial internal discussions in mid-June, MDT stepped up monitoring in July and put in place new control measures to prevent fraud. As of July 27, EASY Card credit card transactions are now limited to three per credit card per day, and credit card purchases per transaction are now limited to a maximum of $112. We also have implemented daily monitoring of credit card activity to identify suspicious or possible fraudulent transactions."

"MDT is now working with Cubic, the EASY Card system's vendor, to add a security feature to the EASY Card vending machines that will require zip code verification for all credit card purchases beginning this October, at no charge to MDT," Damian continued. "This verification system was not part of the EASY Card system when it came online in October 2009 because the contract called for implementation of a service-proven automated fare collection system, and no other system in the nation required zip code verification at the time. In fact, MDT's EASY Card will be Cubic's first automated fare collection system that features zip code verification at card vending machines, placing MDT at the cutting edge of industry fraud prevention efforts. "

Damian went on to state: "It should be noted that credit card fraud represents less than 1 percent of our credit card fare revenue. Since October 2009, when the EASY Card system was officially implemented, it has saved MDT approximately $15 million by substantially reducing fare evasion and improving operational efficiencies. Also, MDT has in place an internal task force that meets regularly to discuss and address any issues with the EASY Card system. "

Despite Transit's assertion that the contract with Cubic did not require the installation of an address verification system, the county Inspector General's Office has launched its own review as to why a verification system wasn't installed at the outset.

Ironically, the Inspector General's Office became aware of the problem because the deputy Inspector General had her Miami home broken into recently. The burglar used one of the credit cards stolen from her home to buy a pair of Easy cards.

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