How a new credit card code could help stop mass shootings

Code offers "significant" new tool for identifying shooters, one advocate said.

September 13, 2022, 1:54 PM

A gunman in Aurora, Colorado, who killed 12 people in a mass shooting at a movie theater, in 2012, legally acquired weapons and ammunition using a credit card.

So did a shooter in Orlando, Florida, in 2016, who killed 49 people at a nightclub. After a shooting at a music festival in Las Vegas, in 2017, which left 59 dead, police found credit cards on the countertop in the shooter's hotel room.

In recent years, gun reform advocates and some lawmakers have called on credit card companies and banks to bolster their tracking and reporting of unusual purchase activity tied to firearms in the hopes that it would help authorities identify potential mass shooters before they carry out attacks.

Late last week, major credit companies took a step that could allow them to do just that. Visa, Mastercard and American Express announced plans to use a specific code for categorizing credit and debit card purchases made at gun stores.

The move follows a decision from the International Organization for Standardization, or ISO, a group that makes guidelines for such transactions, which said on Friday that it would create the unique code that allows gun stores to mark credit and debit card purchases.

Gun reform advocates applauded the step, while gun rights groups, such as the National Rifle Association, condemned it. Experts told ABC News the move may help authorities intervene before a mass shooting, but its effectiveness depends on how banks and credit card companies implement the new tool.

Here's how the credit card code works and what happens next:

What do credit cards have to do with mass shootings?

Many mass shooters have legally purchased weapons and ammunition using credit or debit cards.

Between 2007 and 2018, there were 13 mass shootings that killed 10 or more people, the New York Times found. Of those 13 shootings, the killers financed their attacks with credit cards in eight of them, the Times said.

It remains unclear whether the credit cards found in the hotel room of the Las Vegas shooter were used to purchase guns, since government officials have not disclosed how the guns were purchased, beyond saying that some were bought with cash and some online, the Times reported.

The new purchase code will help banks and law enforcement discover unusual purchases, and provide an additional means for identifying and stopping potential attackers before a mass shooting, said Adam Skaggs, chief counsel and policy director of the Giffords Law Center to Prevent Gun Violence.

"It's significant," Skaggs told ABC News. "This creates a tool that will allow suspicious activity around illegal gun trafficking and around mass shootings to be detected and flagged to the authorities."

How does the new credit card code work?

Nearly every category of a retailer in the U.S. has a code, called a merchant category code, or MCC, that marks each credit card transaction. For instance, purchases at grocery stores, movie theaters, and hair salons each carry a different code.

Until late last week, sellers of guns and other gun-related products shared a code with sporting goods stores.

"There was no way to tell whether somebody spent a thousand dollars on guns and ammo or on soccer balls and hockey sticks," Skaggs said.

Now, credit and debit card transactions at gun sellers will carry a unique code that marks them as such.

Gun advocates hope the new code will push banks to report some gun purchases, since a law passed in the aftermath of the Sept. 11 attacks requires the banks to alert authorities to suspicious transaction activity. For example, banks use algorithms to flag unusual activity that may indicate money laundering or human trafficking, Skaggs said.

It remains unclear if and how credit card companies and banks will apply a standard that deems some gun-related purchases worthy of flagging, especially when the code only shows that a purchase was made at a gun seller but not the products that were purchased, said Kevin Sullivan, a former fraud investigator with the New York Police and founder of the Anti-Money Laundering Training Academy.

"The bank is aware you shopped at a gun store — now what?" Sullivan told ABC News. "What are the parameters going to be now? What are the lines you're going to cross?"

PHOTO: Visa Inc. headquarters in Foster City, Calif., Nov. 23, 2020.
Visa Inc. headquarters in Foster City, Calif., Nov. 23, 2020.
Bloomberg via Getty Images

What are the credit card companies saying?

Late last week major credit card companies said they plan to use the code, including Visa, Mastercard and American Express. The companies did not respond directly to a question about how the new code will be enforced.

"Following ISO's decision to establish a new merchant category code, Visa will proceed with next steps, while ensuring we protect all legal commerce on the Visa network in accordance with our long-standing rules," Visa told ABC News in a statement.

Similarly, Mastercard said the company would implement the new code as it would for any other category of retailer.

"With ISO approving the proposed MCC, we now turn our focus to how it will be implemented by merchants and their banks as we continue to support lawful purchases on our network while protecting the privacy and decisions of individual cardholders," Mastercard told ABC News in a statement.

"This is exactly how we would manage the process for any other appropriate MCC, like a bicycle shop or sporting goods store," the company added.

Likewise, American Express told ABC News in a statement that it would move forward with putting the code in place.

"When ISO develops a new Merchant Category Code, we follow our usual business practices and will work with our third-party processors and partners on implementation," the company said.

"It is important to note that MCC codes are one of many data points that help us understand the industries in which our merchants operate," the company added. "We are focused on ensuring that we have the right controls in place to meet our regulatory and fiduciary responsibilities, as well as prevent illegal activity on our network."

How have gun rights groups responded?

The National Rifle Association condemned the new code for credit and debit card transactions at gun stores.

"The ISO's decision to create a firearm-specific code is nothing more than a capitulation to anti-gun politicians and activists bent on eroding the rights of law-abiding Americans one transaction at a time," NRA Spokesman Lars Dalseide told ABC News in a statement.

"This is not about tracking or prevention or any virtuous motivation – it's about creating a national registry of gun owners," he added.

Skaggs, of the Giffords Law Center to Prevent Gun Violence, rebuked that characterization of the new merchant category code.

"There are merchant category codes for bookstores, newspapers and religious institutions," he said. "Making a contribution to your faith institution on your credit card or purchasing books from a church-affiliated bookstore, those are all coded differently and those are all constitutionally protected rights that are widely practiced and respected in this country."

"It's not any different for guns," he added.