16 January 2003 05:50
Popular Riga restaurant suspected of credit card fraud
Police said this week they were looking into reports of illegal debit card transactions at the Riga branch of T.G.I.
Friday's - a popular international restaurant chain - after an Estonian bank said it suspected the restaurant of
fraud. T.G.I. Friday's first came under scrutiny last week when the Tallinn-based Hansapank reported that 12
clients who had dined there now suspected their bank-issued debit cards had been copied, forcing the bank to cancel the
cards and issue new ones. Its Latvian branch, Hansabanka, followed suit, canceling scores of cards over the weekend as a
"safety precaution," said spokesman Arturs Eglitis. He would not specify how many cards were canceled. Parex
Bank, which supplies the restaurant with its credit/debit card authorization terminals, is leading an internal
investigation with police cooperation. Spokesman Viktors Zakis said Parex also had noticed "irregularities that
might be illegal transactions" in the restaurant's accounts. Officials at both Parex and Hansapank, owned by
Sweden's Swedbank, said it still remained unclear whether any money was stolen from customer debit cards. Ernesto
Gonzales, director of the Moscow-based Rostick Restaurants that owns the Baltic franchise rights to the American chain,
vowed to cooperate in the investigation and to fire any employees found to have been involved. He said Friday's
might have been targeted because of its international reputation and the upper-income clientele of foreigners and
middle-class Latvians it attracts. To defend against future fraud attempts, he said all three restaurants had introduced
portable debit card machines to limit the possibility of fraud. "This way, the card never leaves the
customer's hand. Nobody can take it away, scan it and use the information." Rapid GDP growth has led to
increased purchasing power in all three Baltic states, which has in turn fueled growth in the private banking sector.
Debit-card use in particular has skyrocketed. In Latvia, banks issued nearly 900,000 in 2002, up from some 300,000 two
years earlier. In Estonia, nearly 1 million were in use by the start of 2002. The Riga branch of T.G.I. Friday's
was opened in July with two other Rostick-owned eateries, Patio Pizza and Planet Sushi. Rostick owns and operates some
500 restaurants, mostly in Russia and the CIS, and plan to expand into Estonia and Lithuania later this year, Gonzales
said.
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