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July 22, 2009

A Few Tips On Protecting Yourself From Scams And Frauds

The economy isn’t doing too well these days. People are worried about credit, the slow economy and the high unemployment rate. These are not the only things that are threatening your financial stability too. There is also credit card fraud and identity theft.

Credit card fraud usually happens when a third party is able to gain access to your credit account by accessing your credit card details. Identity theft is a much more complicated scenario where the thief is able to get a hold of your person
al information, most commonly your social security number. Both of these threats are quite serious. If left undetected for a long time, thieves can steal your entire savings or sell your identity to someone else, usually someone who is going to use your identity for illegal purposes.

The damage of credit card fraud and identity theft can be enormous. Financially, it cold cost your your entire savings. You can also be implicated in illegal acts even though you were not a part of the situation. The cost in time and wasted money when you are trying to put your details back in order will also be quite high as well.

To avoid these situations, here are a few tips that you should try:

Keep Your Credit Card Numbers Safe

This is an absolute must if you own a credit card. The numbers on a credit card can be used by credit card thieves to access your account if it is compromised. Keep it safe and do not give it to anyone else unless they are fully qualified to know it.

Be Aware Of Phone Scams

Thieves often use the phone to scam people for their credit details. A favorite tactic is to call the victim and pretend to be from the victim’s credit company. They will use any kind of technique to get you to give up your credit card information. A common one is to claim as someone from your credit company claiming to have traced an illegal charge and attempting to stop it. They will then ask for your credit number and other details.

Watch Out When You Use The ATM

The ATM is a very convenient piece of equipment. It is also a very common way for thieves to collect credit card and personal information. Be wary of tampered or odd looking ATMS. They may be hidden gadgets made to steal your credit card information.

Keep Online Shopping Safe

Online shopping is the next big thing amongst consumers. The convenience of finding what you are looking for online and buying it from there has many advantageus over traditional transactions. However, you are also faced with more risks. Make sure that you are browsing the right website and that your computer has no viruses and spywares.

June 16, 2009

Weak Credit Card Security Increases Credit Card Fraud Risk

If you are a credit cardholder, surely one of your main concerns is the security of your credit card transactions. Credit card fraud is a very real and very common threat that has victimized many a cardholder. Nobody wants to be victimized by a seemingly random crime that has the effect of stealing your credit identity and charging you with the purchases of someone else.

Weak Credit Card Security Increases Credit Card Fraud Risk Security wise, credit card transactions in the United States needs a lot of work, security experts say. The existing setup for credit card transactions are optimized for speed and convenience, not security. These are, after all the major requirements that credit card companies and merchants need to meet the demands of credit card purchases. While credit card companies are implementing security checks, they are not as robust as security experts would expect them to be.

As serious a risk as credit card fraud is, you would expect there to be tighter measures to keep it in check. Currently, the U.S. sees more than 50 billion credit card transactions per year, a major security risk. Surprisingly, the government has left it to the credit card companies themselves to design the proper security rules to keep these transactions secure.

In 2006, American Express, Discover, JCB International, Mastercard and Visa created the Payment Card Industry Security Standards Council. Through this, they created a uniform set of security rules for credit card transactions applicable to merchants. The result was the PCI standard which still exists today as the standard for security that every merchant doing credit card transactions must attain.

According to Avivah Litan, an analyst from Gartner Inc., security upgrades for PCI compliance have cost retailers and other involved payment processors around $2 billion. PCI compliance has also gained widespread acceptance with 93% of the major U.S. retailers and 88% of medium retailers having PCI compliance.

Unfortunately, many security experts have found that the PCI compliance standards are too lenient and does not really reflect the actual security risks involved. Furthermore, PCI compliance audits are known to be inconsistent. Certification courses are also merely cursory and can take as short as a weekend. Bigger retailers can also provide PCI compliance evidence by themselves which makes the process open to major mistakes and fraudulent evidence. Also, retailers having less than 6 million annual transactions are allowed to do evaluations on themselves. These comprise around 99% of all retailers.

All of this means that whenever you use your credit card transaction, you are basically gambling against the odds that the merchant your are using has secured the transaction for you. As long as credit card transaction remains this lax, you probably should consider cash payments as your primary payment option.

June 11, 2009

Identity Theft Study Shows Credit Card Fraud as Most Common Form

Identity theft has long been one of the most dangerous and most personal forms of crime. Identity Theft Resource Center recently conducted a new study regarding identity theft. According to their figures, the most widespread use of identity theft nowadays is opening a new credit card line using a stolen identity. The study says that around two thirds of victims of identity theft are affected by credit card fraud.

Identity Theft Study Shows Credit Card Fraud as Most Common Form This is a very disturbing trend, considering the state of the economy and how little a credit card consumer can afford to have their credit at risk in the current economic climate. According to the study, the number of victims of fraudulent charges increased by 39% in 2008. In 2007, the figures were at just 15%.

The major protection for credit card fraud should be data security. Unfortunately, consumer data is not as secure as consumers would want it to be. Identity Theft Resource Center maintains a Breach List report and, according to their 2009 report, there have been 230 breaches as of May 26, 2009. These 230 breaches resulted in the exposure of 11,615,507 records.

Recovering from being victimized by credit card fraud can be very costly in terms of time and money. When an existing account has been compromised, the cardholder can spend an average of $739 for expenses such as travel, police reports, photocopying, and the like. When a victim’s stolen identity is used to create a new credit account, the cost can be much higher, averaging at $951. The cost in terms of time is also formidable. Recovering an affected existing account can take an average of 58 hours. A fraudulent new account can take 165 hours to correct.

Identity theft is such a serious and devastating crime that many people are taking interest in it, not the least of which are consumers. Because information about identity theft and its prevention have been spreading fast, detection of identity theft incidents has gone up.

Credit cardholders are beginning to be very vigilant in keeping an eye on the details of their monthly bills and statements. As a result, a majority of victims of credit card fraud has been able to detect that they have been victimized before major damages have been done. Only a third of the total number of victims found out that they have been victimized only after they got a call from a collection agency or they had a denial of credit. When it goes that far, it usually means that major damage has already been done.

June 10, 2009

Smart Spending Means No Credit Card Woes

With the way the economy is going, you really don’t want to get yourself into credit card debt. That’s why, as much as possible, you should try to make smart choices whenever you use your credit card. If you are thinking that you are better off getting rid of your credit cards, don’t. Your credit cards are the primary link to your credit score and, if you surrender your credit cards, you will most definitely lose out on your credit score.

Smart Spending Means No Credit Card Woes One of the worst ways that you can get into credit card debt is when you fall for their aggressive marketing practices. Credit card companies are always looking to expand their customer base. More customers mean greater profit. Thus, you are always going to find some very attractive offers from credit card companies. Take this with a grain of salt. For instance, some companies offer credit cards with waived annual fees. Make sure that you know how many years that fee is waived. 0% interest rates are another common trap. With a deal like this, they are just waiting for you to miss one monthly payment. Once you do, you’ll see your interest rates rocket sky high.

Another thing to remember is to be smart with your monthly payments. Obviously, make every effort to zero out your monthly balance every month. That means charging your purchases smartly, making sure that you will have the money to cover your balance at the end of the month. You don’t want to be charged late fees. You should also make a point of reviewing your monthly statement carefully. Banks are notorious for charging you with unearned fees or with ghost purchases. Make sure that you are being billed fairly. If you have any doubt, call the bank immediately. This is also good practice for detecting credit card fraud.

As much as possible, use your credit card for credit purchases. Some credit cards offer a service wherein you can also withdraw cash from an ATM using your credit card. Don’t use this service. For one thing, the charges are way higher than a normal ATM card. Also, you don’t want to get used to this kind of practice. Small withdrawals have a way of ballooning over time so that you will realize only when it is too late that you’ve accumulated a huge debt.

If you are fond of the convenience of using credit cards, you should look into debit cards. Debit cards can be used just like how you use credit cards. The main difference is that, with a debit card, your purchases are taken against an existing balance, maybe in your bank account. That means that whatever you charged to your debit card, it is already paid the moment the transaction goes through. No need to worry about monthly bills.

May 26, 2009

Rapid Rise On Credit Card Fraud Seen

Credit card fraud has long been one of the most controversial problems of the credit card industry. The nature of the crime is doubly troubling as credit card fraud, more often than not, involve the theft of information of a personal nature which can be hard to secure again once it has been compromised.

Rapid Rise On Credit Card Fraud Seen Some types of credit card fraud can also be difficult to detect and, since consumers only see the summary of their purchases when their bill comes, finding out that they’ve been a victim always comes after the fact. This makes credit card fraud much more difficult to track and the perpetrator much more difficult to apprehend.

CQR Consulting is a firm specializing in information security. Their security specialist, Steve Darrall, recently released a statement saying that the total cost of fraud in 2008 has risen by at least 51% compared to the figures from 2007. These figures were taken primarily from credit card fraud involving counterfeiting cards and card skimming.

The information security firm has also noted that CPN or card-not-present credit card fraud along with card counterfeiting and skimming is the most common type of credit card fraud that is threatening cardholders today. Card-not-present credit card fraud is when the illegal transaction occurs without the cardholder or the card itself present during the transaction is done. This is most common in credit card transactions involving telephone or mail orders. Internet or online transactions are also commonly used for card-not-present credit card fraud.

Financial institutions are not standing still and, currently there is a strong push in the financial industry to increase their information security and reduce their risks for fraudulent credit card transactions. Financial institutions are also encouraging their respective merchants offering card payment services to improve their defenses against credit card fraud. This usually involves making necessary information storage equipment more secure and minimizing as much as possible the amount of personal data about the credit cardholder that the merchant will have access to.

According to Darral, there are two initiative that the financial industry is pursuing in order to improve the security of both cardholder and card transaction information. One is the PCI-DSS or Payment Card Industry Data Security Standard. This is developed primarily by the major credit card companies and it will be applied to all organizations that process, store or transmit data pertaining to cardholder payments regardless of the size or the transaction numbers. The other is the Payment Application Data Security Standard. This will be applied to software applications which are made to store, process or transmit data pertaining to card payment.

May 1, 2009

Common Sense Your Best Defense Against Identify Theft

It used to be that identity theft meant an unauthorized purchase on a credit card. But criminals have advanced identity-theft alongside technology and suddenly identity theft can involve a stolen Social Security number used for filing false medical claims or applying for mortgages. When you swipe your card at the ATM, gas pump, or in the RedBox for your next video rental, how do you know there isn’t a fake front added to the swiper – capturing your credit card number and pin?

You’ll know when you start getting the bills and experiencing the problems associated with identity theft. The Federal Trade Commission estimates nine million Americans are victims to identity theft annually, but the most extreme identity fraud cases are rare.

For the most part, fixing a case of identity theft will involve closing one credit card account or freezing your credit if you notice a problem. If you should become the victim of extreme identity theft – where a person becomes “you” in order to open new lines of credit or pay for their medical expenses – you can experience a very lengthy clean up process to repair your credit history. It can take months, sometimes even years, to repair credit histories and scores after such fraud takes place.

Security measures are constantly being improved for your credit card accounts, bank accounts and health care records – but you can’t rely on them to fully protect you from all fraud. You need to take some common sense steps to prevent identity theft.

Preventing the problem is easier than treating the problem. Review your monthly statements regularly from all of your financial accounts. If you see anything that looks suspicious, take action immediately. Most of the time you can stop identity theft in it’s tracks if you take action as soon as you see an unauthorized transaction – but if you aren’t reviewing your financial information monthly or even more often – chances are you’ll miss it until it becomes a huge problem.

Look at your credit reports to make sure there is no errors or omissions on your report. Follow steps to fixing any errors.

Shred bank statements and medical records before disposing to prevent garbage pickers from gaining access from your important information. Don’t carry your social security card in your wallet. Change online passwords frequently and don’t make them easy to guess.