The number of cases of fraud involving forged credit cards or cards used under disguised ownership to pay taxi fares is on the rise in and around the city of Nagoya, according to sources familiar with the cases.
Taking part in the fraud are both taxi customers and drivers, who are suffering from decreased revenues due to the recession and are probably passive participants overlooking the scams.
The parties conspire to use the cards to pay fares, which provide the customer with cash and the driver with revenue, the sources said, adding that credit card companies suffer the loss.
Taxis are being targeted because they do not carry magnetic card readers to verify the validity of the cards with credit card companies, according to the sources.
In response to the increase in card fraud, the Japan Consumer Credit Industry Association, which comprises credit card firms nationwide, is calling for taxi companies to instruct their employees to not get involved.
Annual damages caused by credit card fraud amount to about 30 billion yen. This amount is expected to rise due to the increasingly sophisticated nature of such fraud, including the stealing of data by skimming and other means, according to police.
Such fraud targeting taxis occurred frequently around 1997 in Osaka. It was not until recently that taxis in Tokyo and Osaka started to carry online terminals able to read magnetic data on credit cards so drivers could validate the cards in real time.
There are about 250,000 taxis nationwide, but many taxi companies have held off introducing such devices for their cabs due to the prolonged economic slump.