Staying one step ahead of criminals is no easy task. Ten years ago counterfeiting bank credit cards was relatively easy, until VISA and MasterCard introduced the card hologram. Today telemarketing fraud is relatively easy and both card associations are vigorously trying to reign in the losses.
This year a number of new security ideas have surfaced including the use of pin numbers on credit cards. This suggestion was not very popular, particularly among merchants. However one measure that may prove popular next year is the introduction of photographs on credit cards.
Citibank, the nation's largest issuer, announced photo bank credit cards in April. Since then fraud losses have dropped 67% for their cardholders in the New York City area. If Citibank continues to demonstrate this to be a cost effective approach to cut fraud, other issuers will surely follow. Incidentally, the cost of adding a photo to a card is about $ per accounting dealt with is the interception of credit cards during delivery. Simple thieves may steal cards from mailboxes while sophisticated criminals rifle cards in the mail system. MasterCard conducted extensive research to identify high risk areas of the postal system and as a result introduced anti-fraud procedures including the use of couriers for some of the card delivery process. Another anti-fraud practice is the requirement for cardholders to phone in to verify and activate newly received cards.
This is the time of year when credit card criminals are most active. So what can you personally do to prevent fraud?
VISA recently offered us twelve steps consumers can thwart fraud:
1. Protect your cards as if they were cash. Criminals think of credit cards as money, and you should too. Treat a credit card with as much care as your would a $1,000 bill.
2. Save sales receipts and check them against your monthly statement. If you see a charge you don't recognize or if you notice any inconsistencies, write your credit card provider right away.
3. Make a record of credit card account numbers and telephone numbers for reporting lost or stolen cards. In fact, it's a good idea to make a list of everything you carry in your at list in a safe place.
4. Be careful in giving out your credit cards number over the telephone. If you are not familiar with a firm, get its full name and address and contact the Better Business Bureau to check it out. Fraudulent telemarketing is a significant and growing problem.
5. Do not write your credit card number on any check. Although merchants might ask you for this information, you have a right to refuse to give it.
6. Do not reveal any personal information when you use your credit cards. According to VISA and MasterCard regulations, merchants cannot request you to provide any personal information, such as your address or telephone number, as a condition to accepting your card; they may require only a valid card and your signature.
7. Make certain the credit card handed back to you by a store clerk is your card. If charged slips with carbons are used, check that the clerk tears or splits the card sheets before you leave the store, otherwise your card account number could be obtained from the slip and used fraudulently.
8. When mailing in your monthly credit card payment, take it directly to the post office or a mailbox. Some thieves have been known to take these envelopes our of home mailboxes, appropriating the account number for fraudulent purchases.
9. Report a lost or stolen card to the issuer immediately. If your card is lost or stolen, and if used by another person to make an unauthorized purchase, your can be held liable only for a maximum of $50.
10. Know who has access to our cards. If your credit card is borrowed by a family member (spouse, child, parent) with or without your knowledge, you may be responsible for their purchase.
11. You may be responsible for your children's debts, whether or not you have co-signed for their credit cards. Be sure to know the laws in your state.
12. If you become separated or divorced and your spouse if on your credit account, you may still be liable for your spouse's purchases. Be sure to change the status of your credit cards when your status changes. Consumers across the country have been bombarded with a pre-approved solicitation for a 12% gold card with a credit line of $10,000 or more. The offer is coming from a company called Credicorp, Inc. of Dallas, Texas.
You should be aware the Credicorp gold card is not a VISA, MasterCard or American Express card and probably has little or no value to most consumers. What makes the Credicorp offer smell is that face that consumers on the verge of bankruptcy have been pre-approved for the card.
RAM Research has received numerous phone calls and letters regarding this offer and has long offered this simple advice: if it sounds too good to be true it probably is.
Most companies offering these so-called gold cards are really offering you a catalog shopping card. The catch is: the catalog merchandise is excessively overpriced and you have to make a substantial (40% - 50%) down payment before you can charge it to your gold card. For example a table lamp may be listed for $100 in the catalog with a required $50 downpayment. The same lamp will probably sell for $50 in local discount stores.
Consumers looking to establish a good credit reference are often disappointed since most of these so-called gold cards do not report your payment record to credit bureaus.
If you receive what you believe is a suspicious credit card offer fell free to call us or send us a copy of the solicitation. Remember too the best credit card deals mailbox.
By the way some of our readers have told us they have recently received solicitations over the telephone to purchase lists of good credit card deals. The caller will typically ask for a fee of $30 or more for the list. We have yet to hear of any offer at any price that exceeds the value of the information you have in your hands right now.
Last month we told you about Signet Bank's new rock bottom priced cards. They are now offering two special cards to the general public.
The first card is called the Signet First Consumer card and currently carries a 6.8% interest rate and a $29 annual fee. The card floats 3.4% above the LIBOR rate (London Interbank Offered Rate) through 1993. Thereafter the card carries at LIBOR plus 8.4%. For more information call 1-800-952-3388.
The second card is called the Signet Consumer National card and carries no annual fee and a 9.8% interest rate. This card caries at 6.4% above LIBOR through next year and then increases to LIBOR plus 11.4%. For more information call 1-800-862-1616.
