Credit card crime is on the rise. How not to become a victim

Credit and debit card scams are on the rise but you can take steps to stay safe.
According to the first official survey of personal fraud in Australia, about 3 per cent of credit card holders can expect to experience card fraud this year, while nearly 60,000 people could be conned out of their confidential banking details in "phishing" scams.
And don't think it won't happen to you. In the case of card fraud, the Australian Bureau of Statistics study found the vast majority of victims - 70 per cent - were employed, married and Australian-born, with nearly half of them highly educated.
The chief executive of the Australian Bankers' Association, David Bell, says: "So long as there's been money in the system, there's been fraud - it's an ongoing issue. In terms of the quantum, it's relatively small but that's not the point - the point is it should be prevented . . . because not only does it result in financial issues for customers and banks, it also goes to the person's sense of security with their accounts."
Australian Payments Clearing Association data for last year shows fraud remains a fraction of overall payments: 44.5 cents in every $1000 of transactions in the case of credit and charge card fraud, 7.1 cents in every $1000 for debit cards and less than one cent in every $1000 for cheques. However, while cheque and debit card fraud are falling, credit and charge card fraud are rising - up from 36.9 cents the previous year. About 70 per cent of that increase relates to cardholders making purchases overseas via the internet and telephone.
Generally speaking, you won't be held liable for losses to fraud, Bell says, as long as you don't contribute to the loss by your actions.
"So, for example, with a debit card if you were to write your PIN [personal identification number] on the card and you lost it and someone removed funds, it would be a hard ask to get your money back," he says.
However, even if you're not financially liable, there will be a cost in terms of time and inconvenience as you sort out genuine transactions from fraudulent ones, rearrange any direct debits and wait for a new card.
So what can people do to protect themselves from financial fraud? These days it's not just a matter of never signing a blank cheque or making sure no one is "shoulder surfing" while you enter your PIN at the ATM.
Crime agencies and regulators say the increasing technological sophistication of criminals means it's also about safeguarding your computer from hackers and protecting yourself from identity theft when you go online.
DEBIT CARDS
Your PIN is the key to debit card security, Bell says. You should never give it to anyone, even a member of your family. And your bank will never, ever ask you to reveal it.
You should have a different PIN for each financial instrument or channel, such as your debit card, credit card and internet banking.
As with passwords, it doesn't hurt to change your PIN occasionally. But don't use numbers or codes that relate to things such as your birthday or age.
That's why social networking sites such as Facebook and MySpace are causing concern. Some people put sufficient personal information on them that a fraudster can "steal" their identity.
CREDIT CARDS
Never, ever lose sight of your credit card when you're paying.
"When you go to a restaurant, don't hand over your credit card and let someone take it away," Bell says.
Unscrupulous operators can record card details (including its three or four-digit verification code) and then use them for online or phone transactions.
Email is not a secure way to transmit information and if you're going to give your credit card number to somebody over the phone, make sure you know who you're talking to. Make sure you sign your card as soon as you receive it and have your mail collected or diverted if you're expecting a card while you're away.
Having a separate card with a low limit for internet transactions may save you some heartache if your details are intercepted online.
"Having a very large credit limit on a credit card does potentially expose you," Bell says.
The new chip-and-PIN credit cards offer a step up in security but, again, you must protect your PIN.
PHISHING
Criminals hope to catch people when they send out "phishing" emails purporting to be from the bank asking you to confirm your account details, password and PIN, supposedly for a "security upgrade" or some other ruse. The email may even contain a link to a replica website. Crime agencies say you should never click on such a link and it's good practice to always type your financial institution's website address into your browser.
Remember, your bank will never ask you for your password or PIN, Bell says, and certainly not via insecure email.
The ABA, the Australian Securities and Investments Commission and the Australian High Tech Crime Centre have a joint website (protectfinancialid.org.au) that provides more detail on how to protect your financial identity, while the Australian Competition and Consumer Commission's scamwatch.gov.au site offers help in identifying common internet scams.
ONLINE TRANSACTIONS
The Government's Stay Smart Online website, http://www.staysmartonline.gov.au, says you need to protect passwords for online banking and other internet transactions just as much as you would your PIN for a debit card.
That involves making sure your computer is protected by up-to-date anti-virus, anti-spyware and firewall programs and setting your browser security at a sufficiently high level.
It also suggests you should confirm the data is encrypted and safe from prying eyes by looking for the prefix "https://" in the address bar and for a locked padlock symbol at the bottom of your browser window.
Always log out from internet banking when you're finished and go the extra step of also closing your browser.
"If any other windows 'pop up' during an internet banking session, be suspicious, especially if it directs you to another website which then requests your customer identification or password," the website says.
SOCIAL NETWORKING
An Australian Federal Police spokesman says you should configure your web browser so it won't remember the data you enter into forms and you should never select "Remember me on this computer" or similar boxes on websites.
You could even go as far as deleting cookies after your internet session.
If you use social networking sites, treat everything on the site as if it were publicly available information. Don't display your date of birth, address or other personal information. Check the site's privacy settings to make sure they're high enough to resist non-friends finding out too much about you.
Don't accept "friend" invites from people you don't know and don't accept the name of a user at face value - they may not be who you think they are.
Be careful about using applications on these sites as they're run by third-party companies that may also get access to all your personal information.
The growth of identity theft has prompted credit bureau Veda Advantage and security group Secure Sentinel to announce last week a $65-a-year service that alerts individuals by email whenever there's a change in their credit file.
IF YOU BECOME A VICTIM
Tell the police immediately.
* Alert your bank or financial institution.
* Get a copy of your credit report and check it.
* Close all unauthorised accounts.
* Keep all documentation.
Source: Australian Federal Police

Credit cards holders get the short end of the stick, but whose complaining?

If you are like me and you have a credit card, chance are you are feeling hard done by.
The Government is out there asking people to spend, spend spend, and mortgage rates are dropping like a lead balloon, but we don't get any joy from equality in rate reductions on credit card debt.
I just don't get it. I thought that when the cost of money is going down then the banks would reduce the rates of money for all clients. But business customers and credit card holders seem to be holding up the banks bid to smash profit targets in spite of poor decisions and rampant wage and bonus claims by top level [not top performing] managers.
It would be one thing if nobody cared or was hurting financially right now, or who was facing financial hardship.
It would see obvious that we have a lack of credit card competition, and that may be the answer to our question. With the major players in credit card finance taking a heavy hit in the US recently, and with these guys suffering loses in the US due to a long recession which only looks like getting worse over there, these guys are leaving our markets or taking as much profit as they can muster, and letting our banks get away with what seems to be like daylight robbery when it comes to credit card interest rate charges.
If this was Italy, Governments would fall, in France there would be riots in the streets, in Greece they would be throwing Molotov cocktails, but hey this is Australia. She'd be right Mate!

Citigroup executives consider sale of all or part of bank

With Citigroup stock value plunging, top executives at the financial giant are considering the sale of all or parts of the company, the Wall Street Journal reported on its website.
The debate within the company is at a "preliminary stage," and officials said the company has "ample capital, funding and strategic direction," the daily said.
The sale option is one of a range of dire scenarios company executives were considering after Citigroup stock fell another 26 percent Thursday, after a 23 percent drop on Wednesday.
The company's board of directors is expected to meet Friday to discuss options to reverse the stock slide, people familiar with the situation told the daily.
Citigroup, a component of the blue-chip Dow Jones Industrial Average, has tumbled more than 70 percent since the start of the year, with the bank hit by hefty writeoffs linked to the US real estate crisis.
Chief Executive Vikram Pandit and other company executives have told colleagues they are frustrated and confused by this week's 50 percent stock decline, the daily said.
Citigroup stocks on Thursday closed at 4.71 US dollars, their lowest level in 15 years, despite Wednesday's announcement by Saudi Arabian investor Prince Alwaleed bin Talal bin Abdulaziz Al Saud that he would increase his holdings in Citigroup Inc. to 5.0 percent, adding that he supports the banking giant's management.
At 25.6 billion US dollars, Citigroup's value on the stock market is barely higher than the 25 billion dollar aid package the US Treasury extended it last month, in the framework of its 700 billion dollar bailout plan for stricken financial institutions.
Besides considering selling the company to another bank, Citigroup executives are also looking into selling parts of the company, including the Smith Barney retail brokerage, the global credit-card division and transaction-services unit, Citigroup's most lucrative and fast-growing businesses, the newspaper said.
They are also exploring the possibility of merging with a rival. Some analysts have pointed to Morgan Stanley and Goldman Sachs Group Inc. as potential suitors, market analysts told the daily.
Citigroup also want to make it more difficult for investors to place bets that the company's share price will fall, a strategy known as "short selling," and have been lobbying the Securities and Exchange Commission to reinstate a ban on the trading strategy imposed at the start of the stock market crash.
Citigroup on Monday announced it was slashing a near-record 50,000 jobs worldwide in further belt tightening to cope with the global financial crisis and heavy losses. At its peak last year, the company employed 375,000 people.
It was the second largest job-cut announcement on record, according to global outplacement consultancy Challenger, Gray & Christmas, tying with 50,000 job cuts by retailer Sears, Roebuck & Co. in 1993 behind the all-time largest the same year: 60,000 by IBM.

Citigroup says credit card loan losses will rise in the recession

Citigroup says losses in its credit card portfolio could rise between $US1 billion and $US2 billion each quarter from now through the first half of next year.
Citi's credit card losses could double over the next nine months.
Shares of Citigroup, which plans to slash 50,000 jobs worldwide, had declined 9.5 per cent to $US8.05 with just under an hour of trading remaining on Wall Street.
Citigroup also revealed its plans to change its accounting for a large portion of its risky, written-down assets. It will move about $US80 billion of the assets from its trading portfolio to either its held for investment, held to maturity or available for sale categories on its balance sheet.
Citigroup said that the company's capital position was strong and it was moving ahead with restructuring plans, which include an additional 50,000 job cuts.
Citi reported last month a $US2.8 billion net loss in its third quarter; its losses over the last four quarters totalled more than $US20 billion.

Stop spending on plastic

Credit card borrowers have been told to cut spending through the Christmas period.
Use the rate cuts windfall to pay down your credit card debt.
Because of Global funding cost rises you cannot expect the banks to pass on all the rate cuts coming over coming months, though the Government and opposition will be putting a lot of pressure on them to comply to this expectation.

In the Christmas holiday season borrowers should be thinking about reducing their credit card debt, as we don't know how the financial markets will affect the rest of our economy.

Credit card debt generally rises due to increased spending, but we have seen that most cardholders have started to reduce their balances.

Another credit card day another million dollars for your bank

Every day that your credit card interest rate remains high, it gifts every the major bank almost $900,000. No wonder you can't pay your bills or your card card down!
Australia's four big banks have failed to deliver any relief on the nation's credit card holders despite the RBA discounting official cash rates by a full 1 per cent.
Fears of global recession yesterday wiped $56 billion from the value of local shares and sent the dollar plunging to a five-year low.
The Australian stockmarket dived 5 per cent. Bank stacks were hit hard.
In a move that had been anticpated by Mr Mortgage on Tuesday, lobal central banks took the necessary step last night of co-ordinating a series of interest rate cuts in a bid to stop further stockmarket plunges.
But as world markets melt down analysis commissioned by The Courier-Mail shows that each day the interest rate on credits cards remains unchanged, Australian banks pocket an extra $886,500.
If the rates remain frozen for a whole month, banks will score a windfall profit of almost $27 million, according to finance research house Cannex.
A leading consumer advocate yesterday angrily hit out at the banks, accusing them of hurting ordinary Australians doing it tough.
"Not passing on any interest rate cut to credit card holders is just punishing people who are already struggling," said Nicole Rich, of the Consumer Action Law Centre.
Almost every Australian adult has at least one credit card and the nation's collective card debt, attracting interest, has blown out to $32.4 billion.
As the global economic firestorm gathers pace and hits the Australian economy, many households will find it harder to pay off ballooning credit card debts.
Many popular Australian credit cards have interest rates as high as 20 per cent and Cannex calculates the average credit card interest rate is 16.8 per cent.
On Tuesday, all big four banks moved swiftly to cut home lending rates by 0.8 per cent when the Reserve slashed the cash rate to 6 per cent, but it is a different story when it comes to credit.
The Courier-Mail contacted the Commonwealth, the ANZ, National Bank and Westpac, who all conceded credit card interest rates remained unchanged but insisted they were "under review".
A spokeswoman for the Australian Bankers Association refused to comment on credit card rates, saying it was a matter for individual banks.
Sharemarket battered
In another day of high drama, there were further signs the Australian economy could be tanking.
The Australian sharemarket dived yesterday with the All Ordinaries shedding a hefty 228 points.
Consumer sentiment fell to near 17-year lows and the number of owner-occupied housing loans fell for the seventh straight month.
Craig James, of Commonwealth Securities, said the new data justified the Reserve Bank's decision to go for a 1 per cent cash rate cut on Tuesday.
The four major banks have all opted to pass on 80 per cent of the cut – 0.8 per cent – on home loan rates.
But Opposition Leader Malcolm Turnbull tried to claim credit, saying if it was not for the Opposition then the banks would not have passed on such a large amount.
"I have stood up for borrowers and I think borrowers have got a better deal as a result," he said.
Treasurer Wayne Swan hit back, accusing Mr Turnbull of letting his arrogance get out of control.
"I know Mr Turnbull thinks that the whole world revolves around his ego, but there are some events in the world which are much bigger than Mr Turnbull's ego," Mr Swan said.
Meanwhile, economic researcher, David Richardson, of The Australia Institute, estimated Australia's big banks could boost their annual profits by $1.4 billion by not passing on the full 1 per cent rate cut on home loans.
But the Commonwealth Bank has vowed to reduce its mortgage rates by more than 1 per cent when markets return to normal.
The Commonwealth yesterday also announced a takeover of BankWest in a deal worth more than $2 billion.
Queensland Premier Anna Bligh said although the Prime Minister had insisted banks absorb some of the cut, the full savings should be passed on as a "matter of principle".
"I understand the Prime Minister has been saying he believes that this interest rate cut should be passed on as fully as possible," she said.

As the credit card turns 50 how will you celerate?

Although Diners Club was launched in the late 1940's, it was used for dining purposes, and so American Express introduced the World's first credit in October 1958, and if you are not celebrating, then perhaps you like them too much. That was in the days when it really was a card. Plastic was a long way off.
In its first year alone Amex signed up 500,000 customers worldwide, including Elvis Presley and US president Dwight D. Eisenhower.
Since then it has changed the way people buy and view money and has meant that saving is a thing of the past. Overall why go through the pain of saving money when you can have things now?
With the current financial crisis don't expect easy credit. Mr Mortgage suggests that you pay down your credit card and switch to a debit card. Yes I know that that is even more pain than saving, but If you have a job and an income its time to give debt the flick.