Comments on: Credit Card Fraud Huge Concern http://www.bloggernews.net/120391 High-quality English language analysis and editorial writing on the news. Mon, 23 Nov 2009 14:21:50 +0000 http://wordpress.org/?v=2.3.3 By: Living on Credit: The Hidden Dangers | The Money Saving Fifty (50) http://www.bloggernews.net/120391#comment-1114008 Living on Credit: The Hidden Dangers | The Money Saving Fifty (50) Wed, 08 Apr 2009 15:02:26 +0000 http://www.bloggernews.net/120391#comment-1114008 [...] » Credit Card Fraud Huge Concern - Blogger News Network [...] […] » Credit Card Fraud Huge Concern - Blogger News Network […]

]]> By: marite ferrero http://www.bloggernews.net/120391#comment-1113525 marite ferrero Wed, 08 Apr 2009 08:20:22 +0000 http://www.bloggernews.net/120391#comment-1113525 Comparing the U.S. market to Europe, it is clear that LESS PIN means LESS FRAUD. People here in europe ask me why U.S. cards are without pin codes and only with magnetic stripes. In the same line of questioning and almost always without a pause, people asking then exclaim that they are sure that card fraud must be rampant in the U.S. and that the U.S. banks are losing a lot of money because of fraud. I then explain that credit cards issued in the U.S. are usually issued without pin-codes. I also then say "Why skim a card that does not have a pin-code"? So if an american asks "How do I protect myself from credit card fraud?”, I would tell them: 1. Do not ask for a pin-code for your credit card. Do not use your card for pin-based transactions. Pay your gas with a credit card and signature. 2. Ask your bank for an ATM-only card to withdraw money from your account. Use this ATM-only card with ATM machines found inside your bank's buildings (besides there are no ATM fees if you use your bank's ATM machines). 3. Before you travel, contact your bank and make sure your ATM-only card can be used outside of the U.S. to withdraw money. Use your ATM-only card in machines located inside the airport. If possible, limit your ATM card usage to ATM machines located inside a well-established bank's premises. Do use your credit cards and sign for them. U.S. cards without pin-codes are not good targets for skimming, don't worry. 4. Now for card-not-present fraud (internet payments), my best recommendation is only use a card issued by a bank that allows you to check your card usage as often as you would like (in case this card is a debit card). Otherwise, always use a credit card for card-not-present transactions and check your card statement when it arrives. You can always dispute and charge back any fraudulent usage of your card credit card number. The one and only time I noticed a fraudulent transaction in my card statement while I lived in the U.S. came from a gasoline attendant who did a double impression of my card. It was quite foolish of the gasoline attendant to do this as this was easily caught. U.S. card fraud rate is less than half that of U.K.'s card fraud rate. Lastly, the Fair Credit Billing Act limits the (credit) cardholder’s liability to $50.00 while the Electronic Funds Transfer Act applies to debit cards. From http://www.federalreserve.gov/pubs/consumerhdbk/electronic.htm) : On lost or stolen credit cards, your loss is limited to $50 per card (see Lost or Stolen Credit Cards). On an EFT card, your liability for an unauthorized withdrawal can vary: Your loss is limited to $50 if you notify the financial institution within two business days after learning of loss or theft of your card or code. But you could lose as much as $500 if you do not tell the card issuer within two business days after learning of loss or theft. If you do not report an unauthorized transfer that appears on your statement within 60 days after the statement is mailed to you, you risk unlimited loss on transfers made after the 60-day period. That means you could lose all the money in your account plus your maximum overdraft line of credit, if any. Comparing the U.S. market to Europe, it is clear that LESS PIN means LESS FRAUD. People here in europe ask me why U.S. cards are without pin codes and only with magnetic stripes. In the same line of questioning and almost always without a pause, people asking then exclaim that they are sure that card fraud must be rampant in the U.S. and that the U.S. banks are losing a lot of money because of fraud.

I then explain that credit cards issued in the U.S. are usually issued without pin-codes. I also then say “Why skim a card that does not have a pin-code”?

So if an american asks “How do I protect myself from credit card fraud?”, I would tell them:

1. Do not ask for a pin-code for your credit card. Do not use your card for pin-based transactions. Pay your gas with a credit card and signature.

2. Ask your bank for an ATM-only card to withdraw money from your account. Use this ATM-only card with ATM machines found inside your bank’s buildings (besides there are no ATM fees if you use your bank’s ATM machines).

3. Before you travel, contact your bank and make sure your ATM-only card can be used outside of the U.S. to withdraw money. Use your ATM-only card in machines located inside the airport. If possible, limit your ATM card usage to ATM machines located inside a well-established bank’s premises. Do use your credit cards and sign for them. U.S. cards without pin-codes are not good targets for skimming, don’t worry.

4. Now for card-not-present fraud (internet payments), my best recommendation is only use a card issued by a bank that allows you to check your card usage as often as you would like (in case this card is a debit card). Otherwise, always use a credit card for card-not-present transactions and check your card statement when it arrives. You can always dispute and charge back any fraudulent usage of your card credit card number.

The one and only time I noticed a fraudulent transaction in my card statement while I lived in the U.S. came from a gasoline attendant who did a double impression of my card. It was quite foolish of the gasoline attendant to do this as this was easily caught.

U.S. card fraud rate is less than half that of U.K.’s card fraud rate.

Lastly, the Fair Credit Billing Act limits the (credit) cardholder’s liability to $50.00 while the Electronic Funds Transfer Act applies to debit cards. From http://www.federalreserve.gov/pubs/consumerhdbk/electronic.htm) :

On lost or stolen credit cards, your loss is limited to $50 per card (see Lost or Stolen Credit Cards). On an EFT card, your liability for an unauthorized withdrawal can vary:

Your loss is limited to $50 if you notify the financial institution within two business days after learning of loss or theft of your card or code.
But you could lose as much as $500 if you do not tell the card issuer within two business days after learning of loss or theft.
If you do not report an unauthorized transfer that appears on your statement within 60 days after the statement is mailed to you, you risk unlimited loss on transfers made after the 60-day period. That means you could lose all the money in your account plus your maximum overdraft line of credit, if any.

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