Aspen City Council to weigh parking-scam losses
September 20, 2014
Aspen officials will soon decide whether to pursue criminal action or cut their losses concerning a parking-meter scam that has resulted in unpaid debts of as much as $56,000 a month this year and thousands of dollars a month since 2010.
The city's Finance Department has been in talks with the Aspen Police Department and City Attorney Jim True about legal avenues, and on Monday, the Aspen City Council will weigh in, as it is expected to approve a new $600,000 parking-meter system to be installed in December.
The current system, installed in 2007, has been susceptible to a scam where drivers use prepaid, maxed-out debit cards for downtown parking. Because it is a batch-processing system, the cards are not declined until the end of the day. The city claims it has since blocked such cards.
When asked how confident he is that criminal charges can be pursued, Finance Director Don Taylor declined comment. He did say that he disputes reports that the city has lost more than $1 million in parking revenue since 2010, claiming the number is significantly lower.
"I'm not downplaying the issue," he added. "It's something we take very seriously."
Since 2010, the average dollar amount for declined-card transactions has climbed steadily. Based on monthly declines, the Finance Department logged losses of $26,580 in 2010, $37,800 in 2011, $78,036 in 2012, $227,220 in 2013 and $448,000 so far in 2014. That's a total of $817,636.
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However, Taylor claims not all declines were fraudulent, pointing to drivers who unknowingly fleeced the system with cards they thought were valid. He estimates that non-fraudulent declines account for $121,000 in lost revenue over the past 41/2 years.
Taylor is expected to deliver a more complete analysis Monday.
When the city became aware of the loophole, it began blacklisting invalid cards, which made them unusable after the first unpaid debt. However, due to changes in Payment Card Industry standards over time, the city's ability to store and blacklist a particular card number was eliminated. The city's latest attempt to end the scam involves blocking all prepaid gift cards that carry a common set of digits. Assistant City Manager Randy Ready said this covers most but not all debit cards.
Ready said the Finance Department is still narrowing its list of repeat offenders, revealing cards that have racked up hundreds, and in some cases thousands, of dollars in unpaid fees.
"There are identities that can be tracked," Ready said. "They will be looked into. Those are criminal acts."
The batch-processing technology the current system employs is consistent with Aspen's previous system, which was installed in 1995.