A successful and very lucrative internet scam that has been in progress for about four years now has been busted this week by the United States Federal Trade Commission.  This scam was designed by some savvy internet thieves who utilized a massive fraud network of very small charges across a large number of card holders, resulting in the theft of millions of dollars from unsuspecting consumers across the United States.  This is one of the many scams that have occurred over the last few years.  The credit card industry continues to remain vulnerable to the threat of hackers despite advanced security systems used to protect data.

The Scam

The details of the scam and the specifics of who was behind it have yet to be determined.  What authorities do know is that it has provided a very valuable and expensive lesson about the importance of secure credit card systems and protecting consumers from this type of fraud.

What happened was that the scam artists responsible for the theft found loopholes in the credit card processing systems. These loopholes in security allowed this group to set up fake companies in an effort to make money off of credit card holders. The stolen money from millions of cardholders was then moved to accounts in offshore countries to keep it under the radar. …Read more

Cash back cards are not a new idea. Cash back with purchases began around 15 years ago and since that time cash back cards have continued to be popular with consumers. Money talks and when cash is given out consumers want to have a piece of it. Consumers love getting cash.

Getting cash back is a big incentive for using a credit card for purchases you were going to make any way. In its inception some cards offered 5% cash back for all purchases. Those days are gone; however there are some cards that offer 5% back on purchases made at gas stations, grocery stores and drug stores. Other purchases are around the 1% or 2% cash back.

Earnings used to be paid out as a lump sum at the end of the year buy card companies realized that they couldn’t keep the momentum going as it was too expensive for the companies to keep up with consumer spending. As a result credit card companies restructured their cash back rewards programs. Some companies offer, for example 1% cash back on the first $2,500 each month. …Read more

The CARD act of 2009 imposed many new rules for credit card companies. These rules imposed by the act were designed to force the credit card companies to ensure that cardholders are informed of their rights, aware of charges and able to easily make choices and changes to their accounts.  With these changes came a friendly new credit card statement equip with all necessary information that will now be readily available to the cardholder.

One of the common problems for cardholders prior to the card act was the difficulty reading and understanding the credit card statement.  The pages of small print and legal terms that filled the pages of most statements were virtually useless to most cardholders because they were not useful or even understandable to the average cardholder.

The friendly face of the new statement is designed to make the credit card statement more helpful, informative and usable for the cardholder.  The new statement forces card issuers to provide pertinent card information on the statement and eliminate the unnecessary information that bogged down the statement and confused cardholders.

The more user friendly statements include the following changes: …Read more

Credit card security is always an issue when transacting over the internet. This new twist on an old standby has people up in arms in Austin, Texas. Credit card numbers from restaurant guests at a local downtown hotel were stolen when enterprising fraudsters hacked into the hotel’s accounting network.

The hotel has fixed the security breach but it is not known exactly how many victims there are but local law enforcements have estimated that up to 700 credit card numbers have been stolen. Numbers from the guests of the Driskill Hotel restaurant were stolen along with patrons who stayed at one of the approximately three dozen locations managed by Destination Hotels and Resorts, the parent company of Driskill Hotel. The Driskill Hotel was built in 1886 and is a member of the Historic Hotels of America and Associated Luxury Hotels International.

Austin Police Sgt. Matt Greer identifies the theft as “serious’ and says, “We are looking at losses in the hundreds of thousands…” Greer identified that most of the thefts have been recently identified but thought that most of the thefts occurred within the past two months.

Police received several complaints when card holders noticed unusual transactions appearing on their cards. Some unauthorized charges averaged in the $2,000 range.

The US Secret Service is on board searching for the hackers behind the heist. …Read more

The issues surrounding of credit is such a hot topic these days. The ever changing regulations and the rise of consumer debt create constant controversy over the use of consumer credit. The use and abuse of the credit cards run both ends of the spectrum. Some spend without limit and end up in debt. Others who fear the instability of the economy may have taken a hard stop approach to liberal card use out of fear.  Either scenario poses a threat to the credit card industry that will force card companies to target new and untapped markets to ensure survival.

Several factors have had a significant impact on why, how and how often Americans turn to the credit card, or turn against it. Despite the battle between spending and not spending, the credit card industry has a need to protect themselves by ensuring that they continue to make money from people who will use credit and pay the company to do so. This is the way the game works.  Young adults are a largely untapped market because up to now no credit was considered a risk in the industry. …Read more

Fraud charges are pending after a serious credit card fraud operation was uncovered in Gilbert, Arizona. Not just limited to credit cards, the man and woman team made up numerous credit cards as well as gift cards. It is thought that this operation was more than a local ring.

Fraud investigators reveal that initial accounts may reach into the tens of thousands of dollars. The financial losses to department stores such as Macy’s continue to escalate as the investigation uncovers more fraud victims. Home Depot also seems to be a target of the fraudulent cards.

The two involved, Christina Smith, 37, and Solomon Williams, 36, were found out after an astute employee wrote down the license-plate number of the vehicle after the team used fake cards to make purchases at the local Macy’s store. They have since been arrested on suspicion of forgery and other identity theft charges. …Read more

Since the new federal regulations on credit cards went into effect, consumers are re-evaluating the credit card accounts they already have. Many are looking to switch out old accounts for more up-to-date deals.

Credit card offers are everywhere – in the mail box, in your email, and all over media print advertising. Major credit card companies are working hard to bring in new customers since more people are cutting back on their credit accounts. If you are considering a new offer, there are some things you need to know and should consider before signing on. It may have been a few years since you’ve researched new credit card offers, so keep these following tips in mind: …Read more

The theory of owning a small business used to be that you need to keep your business and personal finances separate. This helps keep accounting accurate and allows the business itself to build it’s own credit history. With the recently enacted CARD act legislation, the benefits of business credit cards remain but with a few strong caveats.

Why the Changes?

The CARD Act was devised to offer more consumer protection for credit card holders. Because card companies began inflating interest rates, lowering grace periods, and essentially charging any amount of fee to turn a profit after record defaults, consumers had little protection and faced mounting debt daily. But the CARD Act only covers personal credit cards as business cards are excluded from the new protection regulations.

While technically the business credit card is for business, the responsibility for payment and card management still falls to the owner. After all the changes that have been made, it stands to reason that a personal credit card might now make more sense for certain individuals. If you are using a card to fund your business and can’t afford to pay off the balance in full each month, you may need the protection of the CARD Act to keep interest rates from increasing, adding more debt to your balance. Under the new rules, you can not be assessed a penalty until you are 60 days past due. …Read more

Having your credit card stolen is one thing but having your credit card subject to a slow bleed of petty card fees is another scam altogether. The Federal Trade Commission has uncovered a massive credit card fraud ring that parlayed small individual charges of $10 or less into millions of dollars in fraudulent charges.

The latest in a well developed scheme of cyber crimes, the fraudsters would set up fake companies and put small charges, usually under $10, to legitimate credit cards. The FTC identified that more than a million consumers were the victims and had charges put on their cards and their payments were routed through fake companies in the US and then sent to bank accounts in Europe and Asia. …Read more

In line with the CARD Act, the Federal Reserve announced the new rules this week. The new protection measures will go into effect August 22. The rules will be the final installment of the CARD Act and will cap late fees and help provide some relief from rate increases on credit cards.

The new rules involve:

Late Payment Fees
Most of the late payment fees on a credit card bill will be capped at $25. The fee can increase up to $35 if one of the last six payments you made was late or if the issuer can provide proof the costs justified a higher fee.

Penalty Fees
Penalty fees can not exceed the amount of the violations that incurred the fee. In other words, a credit card company can not charge a customer a $49 fee if a customer is late making a minimum $15 payment. They can only charge $15 or less.  Also, customers can not be charged a fee more than once for a single transaction. …Read more