Fa, la, la, la, la and all that rot! Not only is it the season of the
year when suicides and homicides are at their higest level than any
other time of the year, it will soon be the time when fraud runs
rampant. People who work in credit departments will tell you that the
week before Christmas including Christmas Eve are the worst times of
the year for fraud.
For several years in the 1960's and 1970's I was employed by the Amoco
Oil Company in its central credit card operation in downtown Chicago.
My grandfather had helped me get this job; his immediate supervisor
was the superintendent at Whiting Refinery, and by virtue of that
position also an Amoco/Standard Oil Vice President of refinery
operations. That same man had 'gotten me on' at University of Chicago
as a telephone operator when I was a junior in high school.
Most of that time was spent in the Sales Authorization Department,
which is another name for the part of the credit department which
approves (or not) credit card sales 'at the point of purchase'. In
those days, 35-40 years ago, originally there were no computers to
help us; -- there were the large mainframes in our 'computer
department' but no desktop individual computers; they did not exist --
then we eventually got computers but approvals or declines were given
by voice authorization. Of necessity, because of the huge volume of
calls received (typically several hundred calls per hour, distributed
to all clerks in that department via an ACD (or Automatic Call
Distributor) there were 'floor limits' in effect for the various
merchants. As an audit trail regards who said what, 'approval codes'
were recited over the telephone in this way, "okay (code number)" and
the merchant wrote down this number on the paper charge ticket which
served as his proof that he _did_ call it in and get it approved. For
example, "OK 67H3CPT" meant that some clerk named 'PT' had okayed
transaction '67H3C' on that day.
Prior to any computers at all -- except the mainframes -- (early to
mid-1960's) we worked from large bound volumes of books -- computer
'print outs' of about a thousand pages each with thirty or forty
entries; 30-40 entries per page, a thousand pages per book, about 40
books in total on shelves. As we walked around the room wearing
telephone operator-style headsets with very long cords on them, we
would go to the account number desired (the books were arranged in
numerical order, after a bit of experience you knew that a given
account would be found in volume 37, and approximatly what page it was
on therein) so you would walk over there, flip open the book, examine
other penciled in entries [amounts of previous sales since the book
was last updated], the 'credit limit' and any other notes handwritten
there by your co-workers. That gave you a rough idea of what the
customer's current balance [including any pencilled in entries] was,
and what it would be if the sale in question was approved. Thirty or
forty clerks, on their feet all day, all climbing over and around each
other to check books and note balances, etc. Needless to say,
excellent body hygiene was important, but not always observed. Suffice
to say, we by and large 'trusted' the customers to not go over their
credit limit; those were simpler times and simpler customers, not as
sophisicated in fraud as many are today. When a customer did go over
his limit, or was delinquent, then of course you did not approve the
sale, and told him why if you were asked.
Merchants had varying 'floor limits' also. For most merchants, some
minimum dollar amount did not have to be called in; jewelry stores had
to call in _all_ sales; gasoline stations did not have to call in
anything under ten dollars or so. It really depended on the commodity
being sold. Merchants got a mimeographed 'hot sheet' from our office
on a weekly basis; they always had to check this 'hot sheet' prior to
any sale, as this told them what cards were always invalid at all
times; customers who had gone way over limit with small sales under
the floor limits; instances of fraud, etc. The only time this did not
apply was when our phone lines got so backed up with calls waiting,
then the department supervisor would announce 'floor limit is raised
to X dollars' and that was understood to mean we did not have to check
the print outs for anything under that dollar amount; just pronounce
an approval code based on a 'manual' formula.
Then one day we all got personal desktop terminals, and the printout
books were gone. Now just sit there and type in the account number
given and the computer would respond automatically: If the account was
good, 'OK (code)' or if the account was bad: 'Declined'. If the
computer could not reach a decision on its own, then the response
would be 'review' and the customer's history for the past 5-6 months
put on display. For those accounts marked 'review' then we who worked
there had to look at the display and reach a decision and give the
approval code or the decline. It made our work much easier. At the
same time, changes in the floor limits due to phone line congestion
became less necessary. But there was no such thing as in later years
where cards were 'swiped' or automatically entered by the cash
register, etc. For the merchants it was still a totally manual
operation. For us in the office however, no more needing to try and
decipher someone else's illegible scribbles in the margin of the print
outs, no more climbing over or around a co-worker to find a volume of
account numbers in a missing print out book. This would have been
about 1968 I think when we each got a desktop terminal.
And it was 1967-68 when Amoco inherited Diner's Club temporarily.
Diners had always been located in New York City, on Columbus Circle.
Founded by Alfred Bloomingdale, in the late 1940's and early 1950's,
Diners Club was _originally_ the credit department of Bloomingdale's
store in New York City. About 1952 or so, Bloomingdale's decided to
'spin off' Diners Club into its own thing. (Recall for example how
the Southern Pacific Railroad decided to 'spin off' its
telecommunications department into a new entity 'Sprint'.) The very
same thing happened with Bloomingdale's Department Store and its new
entity Diners Club. Alfred Bloomingdale owned the department store
of the same name and he also owned Diners Club. Like Amoco, Diners
was also completely a manual operation for the first several years,
but unlike Amoco, Diner's ran into some severe problems, both in
their billing practices and their merchant payment practices. It got
to be so bad for Diners that they were losing many merchants and
many customers. About 1965, Diner's sent a letter to all merchants
saying they were sorry for being so screwed up and they were going to
try harder. By 1967-68, the VietNam era of anti-everything Diner's
Club and Amoco Credit Card Center had at least one thing in common;
they both were hell holes to work at, with some _very strange_
people -- a majority of whom were racially diverse -- each were 24
hour per day/seven day per week operations, at least in the Operations
Departments if not the 'customer service' area, both Diners and Amoco
had a large number of thieves among their own employees and labor
disputes among the workers, etc, particularly among the racially
diverse young ladies of whom both Diners and Amoco Credit Card were
full of.
After a particularly notorious incident in New York City, where Diners
management had planned secretly to close their office and move to
Denver, CO (at Denver Tech Center) and several hundred of their
employees -- suspecting the worst -- on the Wednesday before Thanks-
giving that year chose to _riot_ (police had to be called to vacate
the offices) and _take hostages_ from the mysterious place called
the 'computer room' three floors above (the rioters barricaded
themselves in the computer room, took their hostages, and proceeded
to throw three reels of tape (as yet un-backed up customer receivables)
out the window down to Columbus Circle several floors down, shredding
the tape as they tossed it out the window, Diners was about to call
it quits totally. Alfred Bloomingdale and other Diners executives
were out on Columbus Circle trying to gather up the shreds of computer
tape while police were herding the employees out. It sort of reminds
one of the stink at Norvergence on closing day when no one had gotten
paid ... remember that one?
But Diners _had_ paid everyone; no one had gotten cheated, in fact
they even got their Thanksgiving Day turkeys this Wednesday before the
start of the American-traditional four day Thanksgiving weekend. (Most
companies give Thursday and Friday, plus the weekend.) But Diners
'forgot to mention' until as they were handing out the turkeys to
everyone, "have a great four day weekend, but don't bother coming back
on Monday, cause we won't be here, we are relocating to Denver, CO."
And they did not bother to say what it is generally presumed management
was thinking: Salaries in Denver (in 1968 still a mostly rural small
town) will be a lot less; the work ethic will be a lot better; instead
of a lot of high-priced lazy anti-VietNam radicals who work in an
incompetent way when they feel like it, we will inherit in Denver many
housewives and 'regular' people who will love their jobs and work for
far less than you city people and not only that, but _they_ will all
be _white_. The employees responded by wrecking the whole office
until the police arrived to crack open some heads, etc.
Amoco observed it all ... and had been thinking for some time how they
would prefer to move somewhere else other than Chicago -- Des Moines,
Iowa perhaps -- for the same reason that Diners wanted out of New York
City in the middle 60's, but Amoco knew better than to just pack up
and sneak out of town in the middle of a holiday weekend, so when in
1972 _they_ decided to move to Des Moines, they gave their employees a
full _two year notice_ of their intentions, so as not to have a repeat
of the Diner's Club situation. And a couple months, or billing cycles
later, when Diners got the rude awakening of what they had lost in New
York -- they wound up writing off slightly over two million dollars in
credit card receiveables for which merchants had been paid but
customers had not been billed and would not be billed since the
computer tapes and paper tickets could not be reconstructed -- Amoco
took the hint and treated their employees much better, with a two year
advance notice that they were getting out of town. Later that same
year, the bottom fell out at Diners, and a consortium which included
CNA Insurance and Amoco bought up the leftovers. Amoco decided they
would start a new credit card lable, called 'Torch Club' which was
Diners and Amoco put together, and offer Torch Club only to their very
best customers. Citicorp would not pick up Diners until 1981, about
twelve years later.
With all that in mind -- that Alfred Bloomingdale almost wrecked his
company -- in fact Citicorp refused to say much about Bloomingdale at
all in their _History of Diner's Club_, I would like to tell you about
Mr. Bloomingdale's personal Diners Club card. Not his company card,
his _personal_ card. It was stolen from him, probably by one of the
various prostitutes he went out with all the time. I say this only
because it has some relevance. Many people know -- either because they
read the papers when he was alive or whatever, that Al Bloomingdale
was very much sexually into S&M, 'rough trade', or whatever you wish
to call it. He was indiscrete with the hookers he would pick up. After
he died, one lady started a lawsuit to get his life savings claiming
he had promised her all his money. True or false, I do not know, but
Al Bloomingdale was _kinky_ to say the least. In one such affair,
someone picked his pocket and made off with his Diners Card and other
stuff. Due to the incompetence of the employees at Diners in New York
and later at Amoco in Chicago and, in fairness, the lack of effecient
computer systems in those days, the thief _lived on that Diners Card
for about a year_. The fact that the mimeographed 'hot sheet' had his
number listed, the fact that store clerks would call in for approvals
and be told to decline that stolen card from Al Bloomingdale, the card
never got collected, the charges kept coming in, etc. It seems
whenever it got close to the crook losing the card (because a store
clerk actually checked the hot sheet or called in for approval and was
told to decline the sale, this thief would bully the clerk or the
authorization person; one of those "Don't you know who I am? By this
time tomorrow I will have your job!" That kind of routine.
One night the crook's automobile stalled somewhere, I do not know
where, only that _I_ was working that overnight shift at the Amoco
center when I got a phone call from this pipsqueak kid in high
school somewhere working the late night shift at a gas station
somewhere, asking for approval on a TBA (tires, batteries, accessories)
sale and the labor involved. I saw _whose card_ it was, and the
status of that account. This, by the way, was in early December
sometime, maybe a few days after Thanksgiving. The Pip Squeak was
all excited: "I was about to give this guy his car back and then on
the list you sent me I saw his card number listed. The guy is
arguing with me and told me if I did not honor his card he was going
to get me fired."
I asked the Pip Squeak where is the car now? He told me it was
still on the rack but he was finished with his work. I told him
you keep that car up on the rack, which is your right. You have a
workman's lien on that car until he pays the bill, and he is not going
to get it paid with that card. I asked him if he still had the
plastic there. He said he did, so I told him (by then the pip squeak
had told me his name was Timmy) "Timmy have you got a pair of
scissors there or a sharp cutting blade?" He said he did and I asked
him, "Timmy, would you like to make fifty dollars?" I think his
eyes almost bulged out of his head as he said "Oh, yeah man, I really
need the money to get Christmas presents for my family, what do I
have to do to make that kind of money?"
I told him, "Timmy, it is very simple. Take your scissors and cut that
card into a few pieces now while we are talking, and then I want you
to mail the card pieces to Diners, PO Box (something), Chicago, IL
and when I get those card pieces you will get by return mail a check
for fifty dollars, how does that sound? Are you afraid of this guy?
Don't be; if you need help just call police; tell them you want your
money before you release the car. Timmy assured me that a couple of
his buddies were there "so I know this dude won't try any ##@& with
me." I guess his buddies there enforced the rule about no car off the
rack ready to go until cash money is paid. Two or three days later
there were the pieces to the card along with a chicken-scrawled note
saying he was told to return this card. Most lost/stolen/abused card
rewards were fifteen dollars, but up to fifty dollars could be
authorized in extreme cases, as this one was. The guy _did_ call
up a few minutes later, making a last ditch effort to convince me
that he was Alfred Bloomingale and I was going to get fired for what
I did. I told him it sounded a good deal to me since I hated working
there anyway.
Timmy got his check from Diners/Amoco a couple weeks before Christmas
but the part I liked best was when the office manager asked me to
come by his office a week or so later. "I heard that you picked up
Al Bloomingdale's credit card." I said I had. He handed me an
envelope and said "thanks very much". Inside the envelope was a
check from the credit card office for five hundred dollars and a
note from Al Bloomingdale saying "thank you for helping with this."
That was a good Christmas for me also.
So remember, December is not only the season to commit suicide but
it is also the time of year for all the scam artists to come out of
the closet.
PAT
TELECOM Digest Editor (ptownson@massis.lcs.mit.edu)