Credit Card Information You Need to Know

The controversy

Those of us who read the fraud blogs and follow the fraud trends are aware that LifeLock’s services have been battered to death. The company is controversial to say the least. The bottom line, up until now, has been that if anyone wanted to pay LifeLock $120 per year to do what they could do themselves for free, then so be it. Part rip-off, part service; at least they pretty much did what they said they would do when you shelled out $120. Now there’s more of a problem in River City.

Experian, one of the three credit reporting bureaus, filed suit against LifeLock claiming that LifeLock posed as consumers to place fraud alerts on files even when there was no suspicion of a problem. Experian successfully argued that third party alerts were not the intent of the 2003 Fair and Accurate Credit Transactions Act and that LifeLock was in violation of California law.

The bigger problem

If third party alerts are illegal, retailers, payment processors and even banks may not be able to provide that service for customers in the event of a breach. That’s a common occurrence. Although FACTA currently allows this, there may be a shift. If the shift occurs, the steps that the financial industry take in the event of a breach could change.

Wired.com story here.

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I just got a notice from Chase that they are going to increase the interest rate on my other Chase card. They did it to the first one a couple of months ago. I destroy my statements so I wouldn’t know what the percentage of increase is until the next statement. There won’t be a next one. I already destroyed the card. Those things really smell bad when you burn them!

Sure, I could opt out by calling them and closing the account, but that would have a negative effect on my credit score, giving them a reason to raise the rate even more. They get you coming or going.

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According to this morning’s report from Information Security Resources, ID theft victims are more than twice as likely to get hit with fraudulent charges on their credit cards or debit cards. Given the current financial conditions, I’m not surprised.

ISR News: Credit Card Fraud Explodes : Information Security Resources

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A recent Press Release issued by the District Attorney of Queens County, New York announced one of the biggest busts in the history of credit card fraud. Forty-five individuals, most with ties to Nigeria, have been indicted on charges stemming from an international ring of massive proportions. In total, over 1400 criminal charges have been filed against the 45 defendants.

Almost 2 years of investigations led to a well run business with employees with various positions and assignments working within multiple cells. Employee jobs ranged from Foot Soldier to Forged Document Manufacturer to Accountant. It’s estimated that the ring cost banks, cardholders, and merchants over $12 Million last year alone.

The May 14th press release cites the names and addresses of the defendants and their alleged roles in the crime ring. It is a very interesting read!

Read the press release here.

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Advanta will close customer accounts next month, leaving a million borrowers looking for credit at a time when lenders are pulling back. The company reported a Q1 loss of $76 Million and is attempting to stem the tide. They’re probably shooting themselves in the foot.

Adding to their woes, they did some rate jacking prompting many of their cardholders to cancel. What did they expect? Then again all the card issuers are doing it to make up the expected losses when the new law goes into effect in February.

See the Money CNN article here: Advanta’s painful plastic surgery

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