Detroit Lakes Liquor Store identified as source of the city's largest financial card fraud case
City officials say it’s safe to use debit and credit cards again at the municipal liquor store, after it was identified as the source of the largest transaction card fraud case in Detroit Lakes history.
Lakes Liquor “suffered a compromise in its data system resulting in unauthorized access to customer credit card account information,” according to Jim Watland, Lakes Liquor manager.
Customers who used their credit card or debit card at Lakes Liquor from Oct. 27 to Nov. 25 were impacted.
“The information involved includes customer name, credit or debit card number, the card’s expiration date and security code,” Watland said.
Customers were tipped off to the card fraud when many cards were later declined because of insufficient funds, money was missing from accounts and banks contacted customers to let them know their cards had been compromised and new ones would be sent out.
Because of the ongoing criminal investigation, Detroit Lakes Finance Officer Pamela Slifka said city officials can’t comment on what went wrong, what was done to fix the system, whether any employees were disciplined, or if there is potential city liability for the money lost through fraud.
More than 250 people have so far reported cases of financial card fraud linked to the city liquor store.
“Those were the ones who contacted us, there may be quite a few who didn’t,” said Detroit Lakes Police Investigator Eric Bergren.
There have been no arrests in the case and there are no suspects yet. The liquor store was identified as the source of the problem after the city hired a computer forensics firm “to do an exam on their system,” Bergren said. “That’s how the compromise was discovered.”
Detroit Lakes police are working with banks, fraud departments and the U.S. Secret Service in trying to track down the perpetrators, who are not believed to be local residents, and may well not even live in the United States, Bergren said.
“Somebody from God knows where was able to hack into the (liquor store’s) computer system to extract information from that. It’s somebody, most likely overseas, that has been able to compromise systems like this.”
Bergren believes those who lost money in the case were all reimbursed by their banks or credit card companies, but he said the case involved a fairly large amount of money overall.
He didn’t provide a specific amount, but judging from police incident reports, it was easily in the tens of thousands.
“It’s a lot of money,” he said. “We’re not talking millions, but it’s pretty good money.”
Although the fraud incidents have stopped locally, Bergren warns that the latest Target cases are similar to the one that hit Detroit Lakes, and that residents should continue checking their credit card statements and report any suspicious activity to their financial institutions immediately. They should also report it to the Detroit Lakes Police Department, he said.
“And there are different security packages that banks and credit cards offer, so I would probably look into something like that,” Bergren added.
The investigation is ongoing and at this point the ball is in the hands of the Secret Service, the agency spearheading the investigation.
“We’re thinking in the next couple weeks we’ll hear back on the information we provided them and we’ll see what we’ve got,” he said.
Bergren, a seasoned police department veteran, said the fraud case is “by far bigger than anything I’ve seen — we’re just not used to seeing this type of activity in Becker County and Detroit Lakes. It’s quite an eye-opener.”
Nathan Bowe, Detroit Lakes Tribune