Frequently Asked Questions
Answers to all of your queries about payment card fraud, ERAD™ and our state-of-the-art solutions.
FAQs for Law Enforcement Agencies
Everything you need to know about ERAD™ and our innovative law enforcement solutions.

If your agency wants to stop payment card fraud in its tracks and prosecute more criminals, ERAD can help. We work with law enforcement agencies to thwart identity theft, fraud, money laundering and other crimes tied to credit, debit and prepaid cards. Our cutting-edge platform gives agents the power to read cards and freeze and seize funds associated with illegal or illicit activities—all in a matter of seconds.

Using payment industry card reading devices and our patented ERAD software, law enforcement agencies receive the intelligence necessary for the seizure of illicit funds and prosecution tied to illegal activities. If an officer identifies suspicious prepaid cards, ERAD makes it possible to temporarily freeze the balance, secure the funds in a law enforcement bank account and document them as evidence for trial.

Like other cloud-based subscription software solutions, the ERAD platform is easy to implement for each sworn officer and is accessible on mobile or PC devices. Once online, an officer can look up card account information for virtually any credit, debit or other payment card. Users can also quickly retrieve the value for both open loop prepaid cards (such as MasterCard or Visa) and closed loop prepaid cards (such as Walmart or Best Buy gift cards.)

We currently serve hundreds of federal, state and local agencies across more than 40 states. Want to add your agency to that lengthy list? Call 571-207-ERAD (3723) or email us.

Unlike a debit card, a prepaid card is not linked to a bank account. Instead, you load money onto the card in advance and can spend it at almost any location in the world. The cards can be loaded or reloaded at almost any store or online through a website such as PayPal or Moneygram. Some prepaid cards also allow for direct deposit of payroll funds and tax refunds.
Because they’re an easier, safer way to move and conceal large sums of money. Using an inexpensive magnetic stripe reader/writer, a criminal can encode the account information from a stolen payment card onto practically any card with a magnetic stripe in less than a minute. These can be prepaid cash cards or gift cards – or even hotel key cards, driver’s licenses, and subway passes.
While most legitimate prepaid cash card program managers and issuers will not allow a prepaid cash card account to hold more than $10,000 – $15,000, there are programs outside the U.S. that allow higher balances. A recent case involving more than 3,000 prepaid cards included several cards loaded with more than $1 million and one with more than $5 million.

Using ERAD, an officer can swipe any credit, debit or prepaid card to see if the information on the magnetic stripe matches the cardholder name, card number and financial institution issuer printed on the card, as well as determine the cash balance. This information will allow the officer to determine whether or not the card is legitimate.

If an officer identifies suspicious prepaid cards, ERAD makes it possible to temporarily freeze the balance, secure the funds in a law enforcement bank account and document them as evidence for trial

The magnetic stripe on a card contains the same information as what’s visible on the front of the card: name, card number, expiration date, and issuer information. A prepaid card stripe also contains the balance. ERAD security technology prevents law enforcement from gathering personally identifying information (PII), such as addresses and bank account information. Multiple courts have ruled that there is no expectation of privacy in the magnetic stripe of a payment card because the cards are already used as a method of financial exchange. In other words, when a law enforcement officer swipes a card as part of a reasonable search, it’s no different – and no more invasive – than a retail clerk doing the same thing. (US v. Benjamin, 2014 WL 5431349, D.Neb. 14 and US v. Alabi, 934 F. Supp. 2d 1201 (D.N.M. 2013)

The 5th Circuit Court of Appeals ruled in 2016 that reading data on a magnetic stripe is not a search.

The 6th Circuit Court of Appeals ruled that law enforcement officials can legally read the information on a card’s magnetic stripe because it should only contain the same information that is already visible on the front of the card.

The 8th Circuit Court of Appeals recently ruled for similar reasons that swiping or scanning a payment card is not a Fourth Amendment search and therefore doesn’t require a warrant.

No. ERAD security technology prevents law enforcement from gathering personally identifying information (PII) such as addresses and bank account information. ERAD only gives officers the ability to compare the information on the magnetic stripe of a payment card to the information visible on the front. ERAD can also determine the balance on prepaid and gift cards, but not credit cards or debit cards attached to checking accounts. Only financial institutions can link a debit card number to an individual’s checking account. Access to that information requires the owner’s consent or a search warrant.

If an officer identifies suspicious prepaid cards, ERAD makes it possible to temporarily freeze the balance and to secure the funds in a law enforcement bank account when they have the proper legal authority. All of this is recorded and documented as evidence for trial.

Only a judge can issue the order to permanently seize the funds on a card. This is known as forfeiture and is only done as the result of due process in a court of law.

Using ERAD, an officer can swipe any credit or debit card and learn if the information on the magnetic stripe matches the cardholder name, card number and financial institution issuer printed on the card. This intelligence will allow the officer to determine whether the card is legitimate, cloned or stolen.

FAQs for Financial Institutions
Find out why financial institutions need ERAD.

ERAD-INS (Issuer Notification Service) is a unique fraud solution that quickly notifies financial institutions when stolen credit, debit or prepaid cards are confiscated by law enforcement. This superior reporting service allows issuers to identify stolen cards and mitigate financial losses.

If you want to curb financial losses associated with stolen cards, look no further than ERAD. Participating financial institutions receive daily reports with the relevant cardholder and agency information they need to protect card accounts from additional fraudulent use. This gives issuers the opportunity to diminish financial losses associated with stolen cards and proactively notify cardholders BEFORE transaction based risk models kick in. ERAD-INS is available to every U.S.-based financial institution.

For more information, call 571-207-ERAD (3723) or email us

Last year nearly 32 million Americans had their credit cards stolen and 13 million individuals had their identities stolen. In 2017, it is estimated that issuers will lose as much as $25 billion tied to stolen credit and debit cards. Experts predict that amount will double by 2020, as criminal activity is expected to expand in both face-to-face and online purchase activities. This is where ERAD can help. Many times a card that has been confiscated by a law enforcement officer is still active and available to be used. Cards that have already been exploited by the criminal are generally destroyed or discarded.

Because ERAD sees these cards prior to their illicit use, the issuer can take actions to block the card and avoid the financial loss.

Because a prepaid card is not linked to a bank account, they’re an easier, safer way for criminals to move and conceal large sums of money. They can load money onto the card in advance and spend it at almost any location in the world. The cards can be reloaded at over 150,000 U.S. stores, or online through websites such as PayPal and GreenDot. Some prepaid cards also allow for direct deposit of payroll funds and tax refunds.

Using an inexpensive magnetic stripe reader/writer, a criminal can encode the account information from a stolen payment card onto practically any card with a magnetic stripe in less than a minute. These can be prepaid cash cards or gift cards – or even hotel key cards, driver’s licenses, and subway passes.

Using ERAD, an officer can swipe any credit or debit card and learn if the information on the magnetic stripe matches the cardholder name, card number and financial institution issuer printed on the face or back of the card. This intelligence will allow the officer to determine whether the card is legitimate, cloned or stolen.

If it turns out the card is stolen, cloned or otherwise fraudulent, ERAD quickly notifies the issuing financial institution, allowing them to mitigate losses associated with the stolen cards and proactively notify cardholders. Participating financial institutions also receive daily reports containing the relevant cardholder and agency information they need to protect their card accounts from additional fraudulent use.

No. The magnetic stripe on a card contains the same information as what’s visible on the front of the card: name, card number, expiration date, and issuer information. A prepaid card stripe also contains the balance. ERAD security technology prevents law enforcement from gathering personally identifying information (PII), such as addresses and bank account information.

Multiple courts have ruled that there is no expectation of privacy in the magnetic stripe of a payment card because the cards are already used as a method of financial exchange. In other words, when a law enforcement officer swipes a card as part of a reasonable search, it’s no different – and no more invasive – than a retail clerk doing the same thing. (US v. Benjamin, 2014 WL 5431349, D.Neb. 14 and US v. Alabi, 934 F. Supp. 2d 1201 (D.N.M. 2013)

The 5th Circuit Court of Appeals ruled in 2016 that reading the data on a magnetic stripe is not a search.

The 6th Circuit Court of Appeals ruled that law enforcement officials can legally read the information on a card’s magnetic stripe because it should only contain the same information that is already visible on the front of the card.

The 8th Circuit Court of Appeals recently ruled for similar reasons that swiping or scanning a payment card is not a Fourth Amendment search and therefore doesn’t require a warrant.

No. ERAD security technology prevents law enforcement from gathering personally identifying information (PII) such as addresses and bank account information. ERAD only gives officers the ability to compare the information on the magnetic stripe of a payment card to the information visible on the front. ERAD can also determine the balance on prepaid and gift cards, but not credit cards or debit cards attached to checking accounts. Only financial institutions can link a debit card number to an individual’s checking account. Access to that information requires the owner’s consent or a search warrant.

If an officer identifies suspicious prepaid cards, ERAD makes it possible to temporarily freeze the balance and to secure the funds in a law enforcement bank account when they have the proper legal authority. All of this is recorded and documented as evidence for trial.

Only a judge can issue the order to permanently seize the funds on a card. This is known as criminal forfeiture and is only done as the result of due process in a court of law.

Using ERAD, an officer can swipe any credit or debit card and learn if the information on the magnetic stripe matches the cardholder name, card number and financial institution issuer printed on the card. This intelligence will allow the officer to determine whether the card is legitimate, cloned or stolen.

If it turns out the card is stolen, cloned or otherwise fraudulent, ERAD quickly notifies the issuing financial institution, allowing them to mitigate losses associated with the stolen cards and proactively notify cardholders. Participating financial institutions also receive daily reports containing the relevant cardholder and agency information they need to protect their card accounts from additional fraudulent use.

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