Declan McCullagh wrote: > The other interesting thing to note is why Citigroup permitted one > card to make $80K of withdrawals from one account (which was allegedly > closed at the time anyway) in a weekend. The answer seems to be almost > certainly a malicious insider in their South African franchise.
This is pretty common. There are times when bank computers are unable to access customer accounts, and rather than incur customer badwill, banks will let ATM transactions go through. The risk is small, since most people will be honest, and they really don't know when these small windows of unlimited withdrawal occur.
I think my group at TRW Datasystems may have invented this approach in 1973 or there abouts. We were the first U.S. company to widely automate CC use (mostly in airports and retailers).
When our central system was down, or the link not working, store controllers were configured to allow transactions under a "floor limit" to be automatically approved. Since the controllers were quite dumb and (at least in early models) could not store the transaction details, it potentially allowed customers to temporarily exceed their allowed credit limits. Since all transactions were completed in hard copy at the cashier, manual processing of the receipts (the authorization code generated by the store controller, and written on every paper copy, enabled easy identification of "floor limit approved transactions by knowledgeable personnel) allowed the central system to be brought up to date within hours.
steve
