Archive for the ‘Credit card fraud’ Category

3 Things To Learn About Your Debit Card

Thursday, May 19th, 2011

The recent security breach at arts-and-crafts retailer Michaels Stores, calls much needed attention to debit cards and their vulnerabilities. In this breach, the thieves not only stole debit card numbers, they actually used them to swipe money from the victims’ bank accounts.

We often consider debit cards a convenient alternative to their look-alike payment tool, the credit card. What many of us fail to remember is that the theft of debit card resources, robs us of our own money and not the bank’s money. Fortunately, there are protections and guidelines in place for victims of debit card scams, but the key lies in understanding the extent of our responsibility for reporting a problem.

Although most debit card issuers offer a brief grace period for reporting a lost, stolen or compromised card, we have specific obligations to our bank that could mean the difference between the protection or the loss of our assets.

According to Bankrate.com, not all debit card issuers play by the same rules:

“Federal law limits personal liability for unauthorized transactions to $50 for credit cards, but offers more limited fraud protection for debit cards. How to protect yourself: Find out if your bank offers theft and fraud protection. Get specific. Under what circumstances is it honored? How do you have to use the card? Whats your timetable for reporting the loss?”

Since each  financial institution varies, you need to know the following for any debit card you carry:

1. What are the specific written rules for my card? Get the rules in writing from your card issuer.

2. Lost, stolen or compromised cards require different time-sensitive responses from you. Get it in writing from your card issuer.

3. Failure to report a problem could result in the loss of all your money. Monitor your debit-card account at least monthly for any irregularities and promptly report them.

The rules above all point to you “promptly reporting” any concerns, though the definition of “prompt” varies. Again, get it in writing.

Jay Foley at the Identity Theft Resource Center reminds consumers to file a police report in the event of a suspicious transaction, which helps document the facts of  your case
for reimbursement with the bank.

By simply keeping a watchful eye on your card’s balances and activity no less than monthly, you can drift off to sleep at night without fear that someone might steal those sheep you’ve already counted.

Posted in Credit card fraud, Data security, Financial Scams, Identity Theft Protection | No Comments »

New “Data Passing” Scams Exposed

Thursday, July 1st, 2010

What do online companies like Orbitz, Priceline and Travelocity have in common?

Nope, guess again.

All three have found themselves  in the middle of complaints about dubious business practices. The behavior in question has recently been investigated by the Federal Trade Commission on behalf of boatloads of victimized consumers.

The scam here,  refers to the practice of sharing or “passing” credit card information over to a third party at the end of a transaction without the knowledge or explicit consent of the buyer.

The retailers deny any wrongdoing.

The practice known as “Data Passing” or “Pre-Acquired Account Marketing” was the subject of a high profile, year-long investigation by the Senate Commerce Committee according to a June 22, 2010 article in the Washington Post.

According to published reports:

“In May 2009, Chairman Rockefeller launched an investigation into a set of controversial e-commerce business practices that have generated high volumes of consumer complaints. Since that time, Commerce Committee staff has been investigating three Connecticut-based direct marketing companies – Affinion, Vertrue, and Webloyalty – as well as the hundreds of online websites and retailers that partner with these three companies to sell club memberships to online shoppers. Although this investigation is not yet complete, it is clear at this point that these three companies use highly aggressive sales tactics to charge millions of American consumers for services the consumers do not want and do not understand they have purchased.”

Bob Sullivan from MSNBC.com  also reported that the problem has triggered an astounding $ 1.4 billion in unauthorized charges onto the credit card bills of  30 million Americans.

Senate investigators revealed that this practice was used by over 450 e-commerce websites and retailers. Many of the names on the list are well-known and respected companies who got around existing data-privacy and banking rules by forming partnerships and joint ventures with third parties.

Credit card issuer Visa, has taken a stand and no longer allows merchants to use the so-called “Data-Pass Marketing” on their network.

Despite Visa’s policy and after more than $1 billion dollars in “aggressive and potentially deceptive” sales tactics,  I think it would be fair to complain that the horse is already out of the barn.

Posted in Credit card fraud, Federal Government, Financial Scams | 1 Comment »

A Spyware Case Where Bigger Is Not Better

Sunday, February 1st, 2009

The Heartland Payment Systems security breach is now considered to possibly be the biggest in history.

The massive theft which is thought to have occurred sometime in 2008, may have allowed the hackers to swipe credit card data from more than 100 million accounts. Apparently, it was spy-ware installed on the company’s internal network that grabbed the data.

PCWorld Magazine reported:

“Heartland says it didn’t discover the breach until Visa and MasterCard came knocking about suspicious activity involving card numbers processed by Heartland……

It’s all the more sad that we as consumers really can’t do a darn thing to protect ourselves against this kind of theft. We can be incredibly careful with our own PC and data, but we have no control over how it’s handled by the plethora of companies that store and process our information.”

According to the Washington Post, Heartland President and CFO Robert Baldwin contacted the U.S. Secret Service as well as two breach forensics teams to investigate.

In terms of sheer volume, Baldwin said:

“The transactional data crossing our platform, in terms of magnitude… is about 1oo million transactions per month.”

This type of breach leaves you and I powerless to prevent it and vulnerable as a result. The stolen Heartland data is precisely what crooks need to create counterfeit credit cards.

That is why the following basics of Identity Theft Protection should be a part of YOUR financial planning.

  1. Carefully watch all your credit card statements for irregularities
  2. Be on the look out for small charges from unknown creditors and report them
  3. Consider freezing your credit files if you don’t plan to apply for new credit soon
  4. The use of a credit card leaves you LESS vulnerable than using a debit card card
  5. Grab a free credit report at least 3 times a year for FREE

CEO Baldwin was quoted as saying simply:

“….we recognize and feel badly about the inconvenience this is going to cause consumers.”

The giant credit card processor feels badly. I’ll sleep better now.

Posted in Credit card fraud, Credit industry, Data Breaches, Data security, Personal privacy | No Comments »

Forecasters Make ID Theft Predictions For 2009

Sunday, January 4th, 2009

Recently, the Identity Theft Resource Center looked forward to the coming year to predict events that will be the inevitable outcomes of the current economic crisis and the looming identity theft battles.

Real Estate: Homeowners who are behind on payments or seeking refinancing sources can easily fall prey to unscrupulous thieves who are more than willing to “take your information and see what we can do”. Bogus land grants and home equity scams will be commonplace. The recommendation is that homeowners speak directly with well known and established banking and mortgage companies in order to avoid the potential pitfalls of unknown solution providers.

Credit Cards: Many consumers may unknowingly turn to thieves in order to get access to credit cards, debit cards and debt consolidation loans. It is easy to imagine handing over private information to seemingly legitimate companies. Like the mortgage industry, the credit card world has been turned on it’s head in the current economic climate. Look before you “leap” into a deal that may be too good to be true.

Check Fraud: Due to the lack of easy credit, many thieves will turn to check fraud as a way to accomplish their crimes. Needless to say, safeguard your checkbook, deposit slips and banking statements as a first line of defense. Many financial advisers are steering clients away from using paper checks at all. If you must write paper checks, be sure to use an anti-check-washing gel pen and keep a close eye out for any irregularities on your statement.

Organized Crime and Cyber-Thieves- Rings of professional thieves from all over the world have helped make identity theft the fastest growing crime in the United States. Security experts agree that these attacks will become more brazen as time goes by. According to the Wall Street Journal, the U.S. Department of Homeland Security has been reviewing “worst case scenarios” for possible attacks against U.S. government, industrial and financial institutions.

Consumer Scams: Common and rampant scams with nicknames such as skimming, phishing, vishing, pharming and whaling will continue in 2009. This is largely due to the weak condition of the U.S. economy, the vulnerability of average consumer and law enforcement’s scarcity of resources to deal with the sheer volume of complaints.

Breaches: Corporate, educational and government security breaches continue to grow every year. According to the ITRC, there were 641 breaches in 2008, surpassing the total of 446 in 2007. Due to the portability of data, the easy theft of laptops, the cunning deception of “inside scam artists” and the desperation of global perpetrators, this number will continue to increase. At the very least, have your own laptop or PDA/smart-phone set up with encryption and password protection software.

Remaining diligent, alert and informed about the latest scams and threats is your best defense against being victimized in 2009. Stay tuned.

Tags: , , , , ,
Posted in Credit card fraud, Credit industry, Cyberwar, Data Breaches, Federal Government, Real Estate Fraud | No Comments »

ID Theft Scam Makes Front Page Headlines in L.A.

Saturday, December 6th, 2008

The Los Angeles Daily News ran a front page headline yesterday that was right up my alley! The L.A.P.D . in this case, got their man and the bust was one of the most significant fraud arrests in recent Southern California memory.

Not only was the culprit apprehended after a lengthy investigation, but the tools of his trade were confiscated, making this arrest one of the more successful in terms of peeking into the secret world of a full time identity thief.

Like the illusionists in Las Vegas, these trade secrets are highly guarded from the public unless someone gets the chance to pull the curtain back to reveal the inner-workings of these clever con-men.

As reported in the Daily News yesterday:

“….underneath his cool and collected exterior, the 44-year old man was found to possess more than 1000 forged credit cards he used to scam San Fernando Valley residents and businesses in an operation estimated to have netted millions of dollars, police said. His bail was set at $2 million and we’re investigating mail fraud, grand theft and additional charges…”

Investigators discovered state-of-the-art tools and equipment that enabled the suspect to create magnetic strips for the back of the fake credit cards. Stores like Costco, Wal-mart and Sam’s Club were perfect locations for the suspect to go on shopping sprees with the fake credit cards.

Fortunately, an alert internal investigations team at Costco noticed the suspect’s unusual purchasing patterns in one of their stores and the investigation was finally brought to a conclusion several months later.

Thanks in part to Hollywood, the theft or misappropriation of an identity for the purpose of financial gain is all to common in television and movies, which desensitizes us to the devastating financial impact of this no-so-victimless crime in the “real world”.

Anyone who rents property should note that this particular case includes private financial information which was included on confiscated rental applications. Costco has partnered with Identity Guard to offer credit monitoring services to their members for a nominal monthly fee.

A few reminders are in order:

  • Don’t lend your credit cards to anyone (seems obvious I know)
  • Monitor your statements to detect unauthorized activity on your account
  • Report suspicious activity in writing to the card issuer
  • Make sure your mailbox is locked to protect statements or new cards that arrive
  • Minimize the number of credit cards that you carry
  • College dorms and apartments are rich targets for prying eyes and sticky fingers
  • Use online sites that start with https:// which tend to indicate they are “secure”

This case underscores the reality and vitality of professional identity theft gangs. Although credit isn’t as easy to obtain during this holiday season as it has been in the past, your chances of being victimized are better than ever.

Desperate times call for deliberate counter-measures!

Posted in Credit card fraud, Data security | No Comments »

Identity Appreciation Month

Monday, September 1st, 2008

I appreciate the value of my intact identity profile…don’t you?

It has been too long since my last post. The past month has been a whirlwind for me as a result of my vacation to China.

As anyone who travels regularly will tell you, keeping tabs on your identity is a both a necessary evil and a blessing beyond belief when traveling abroad. Venturing off to China during the Olympics is certainly a test of all the safeguards that are supposed to be in place to make sure that you are really the real you when you travel.

Passing through customs, immigration and the tightest security I have ever witnessed gave me both a sense of awe and gratitude. Chinese security officials had their hands full and the world witnessed one of the most spectacular displays of pomp, ceremony and athletic achievement ever organized.

At the same time, security was at an all time high for good reason. The eyes of the world were fixed on Beijing and our hosts wanted the occasion to shine. I think we all agree …..it did.

The 12 hour flight from the West Coast gave me a chance to catch up on some of the latest and greatest scams we are facing here at home. One that caught my eye in particular was the number of credit card skimming cases which the Secret Service is investigating around the country.

In my seminars, I magically produce and vanish a card “reader” which could be called a “skimming device” if it fell into the wrong hands. The problem is that we are so used to seeing them, that we don’t even think about sliding our credit and debit cards into a device at an ATM, bank or retail location.

The challenge is that these high tech and deceptive skimmers don’t prevent the machine we are accessing from working and can be painted to match the color of any legitimate machine. According to USA Today, there are major investigations going on right now in California, Delaware, Nevada, Pennsylvania and Washington.

In Washington state alone, the number of recent victims could total as high as 250 people with losses totaling $500,000. The combined total of the cases totals between $1 million to $3.5 million stolen from victims.

The obvious first step for self protection is awareness and a keen eye for anything that may look suspicious. Thieves quite often place a small camera on or near the pump or ATM which records pin numbers as you key them in.

Diligent, constant awareness of irregularities and unauthorized activity on your accounts is your personal responsibility. The good news for American consumers is that reporting fraudulent or suspicious activity generally stops or reverses damage done with credit cards and most debit cards bearing the Mastercard or Visa logos. Irregularities must be reported in a “timely fashion” which generally means 60 days or less from discovery of the event.

Yes, old fashioned skimming is alive and well and being dispensed at an ATM or gas pump near you.

Posted in Credit card fraud, Data security, Personal privacy, Uncategorized | No Comments »

The Killer Identity Theft App

Sunday, March 2nd, 2008

Think Id Theft is a “victimless” crime? Think Again!

In the years that I have searched for the telltale signs of “identity vulnerability”, I’ve often peeked into some rather innocuous and predictable places.

We don’t like to think of this crime as a gritty, true crime. After all, ID theft isn’t as bad as a typical violent TV crime-drama crime is it?

In fact, a little known reality is that the victims of identity often feel the same impact and violation as victims of violent crime.

Last week, an Illinois jury sentenced Eric Hanson to death for the murder of his parents, sister and brother in law. The four were found dead in an upscale home in the nearby city of Aurora.

In addition to first-degree murder, aggravated kidnapping and armed robbery, Hanson was found guilty of identity theft. He was accused of stealing $80,000 from his parents in a credit card fraud scheme.

Hanson’s killing rampage began when his sister informed the family that he had ripped them off for the money in the credit card scam.  Prosecutors claimed the convicted murderer and ID thief killed in a sick sad attempt to cover up his evil caper.

Statistics reveal that a large percentage of ID theft occurs within families. Scary eh?

Posted in Credit card fraud, Violent Crime | No Comments »