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UPDATE: Video Store Manager Charged In Credit Card Scam

9 Jul, 2002 By: Joan Villa

Hollywood Video has implemented a quick response to reassure customers after a store manager in Mount Vernon, N.Y., was arrested and charged last week in an identity-theft ring that used credit card numbers gathered from membership applications.

The scheme apparently set up fake charge accounts in the New York City area that were then used to run up purchases totaling hundreds of thousands of dollars, according to Westchester County District Attorney Jeanine Pirro.

Ronald Darden, a 27-year-old store manager, was charged with scheming to defraud along with six others who worked at unrelated retail establishments, including a pharmacy and an electronics store, and then passed the credit card information to a Bronx-based ring, confirmed Hollywood general counsel Eric English.

Hollywood has cooperated with law enforcement and alerted credit agencies, who agreed to offer store customers free copies of their credit reports in order to allay concerns they may have been victimized, he said. The incident is isolated to one employee out of some 23,000 nationwide, he stressed.

“We are deeply saddened by it and stand by each and every customer to provide any assurance they need in order to ensure they have not suffered anything other than the inconvenience of having to call each of these credit agencies,” English said.

The store has posted an informational message for customers directing them to law enforcement, credit agencies and Hollywood's customer service number. The “overwhelming response” of customers expressing concerns so far is appreciation for Hollywood's handling of the situation, he added. Fewer than 100 customers have called in with identity theft concerns, he said last week.

Hollywood is in the final stages of completing a security audit by a third-party vendor and will revisit procedures as a result of the arrest, he said. “We will continue to -- as we have over past years -- look at what we need to do as a company to be responsible in handling information,” he noted. “We do background checks on people at the stores, we perform what we believe to be appropriate checks on any personnel that work at the company, and we deal swiftly with any type of theft issues.”

Although D.A. Pirro issued a blanket warning to consumers against giving out credit card numbers “unless you know who you're dealing with,” English said that may be impractical in 21st-century America. “The credit agencies are set up to deal with fraud, as are credit card companies, and our company is set up to ensure each customer doesn't have an issue as a result of this,” he said. Hollywood's membership is “less stringent” than most other video chains, English noted. While the retailer routinely requests a photo identification with a second form of ID, that requirement can be met with a driver's license and a utility bill rather than a credit card, he said. “Our only goal is to make sure the customer who is opening up the membership is the who they say they are and second, if they take our product and don't return it, we can contact them,” he explained.

The widely publicized incident -- although apparently isolated to one bad-apple employee -- will mean customers will be even less cooperative in providing personal data for video memberships, predicted one retailer. “We fight that all the time,” he said. “People want to walk out with $200 in movies and they don't want to show you their driver's licenses.”

The Video Software Dealers Association acted on the news by issuing a special “retailer advisory” on identity theft and credit-card fraud, posting guidelines for handling customer information on the association's Web site.

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