Some of you may remember that a while back I predicted that credit card issuers would be looking for new fees and other ways to make up for the revenue they are loosing because of the CARD act that protects consumers from outrageous fees. They are doing it.

The on-line trade publications are now warning cards holders of the latest push from the issuers. Commercial Credit Cards, also known as “professional credit cards” are being promoted to just about anyone. The lure, apparently, is that card holders will be excited about the fact that they are eligible for a commercial credit card.

Here is the problem. These commercial cards are not covered by the CARD Act. That gives banks the ability to carry on with their inflated fees just like they did before the law went into full force last month.

These promotions, mostly via direct mail, will have the usual attractive teaser rates. They’ll offer several months of zero or near zero interest rates.

Don’t be deceived. If they are promoting business credit cards or professional credit cards or commercial credit cards, what they are actually promoting is credit cards that do not fall into the realm of consumer protection laws. Avoid these cards.

“Like most consumers, I had always assumed that banks and customers are united in wanting to curtail bank fraud.”

So begins an August 23rd article in the Huffington Post. I’ve been saying for years that banks have a revenue stream in fraud. I made the statement very publicly as Merchant911′s Director on the CBS Evening News several years ago in reference to chargeback fees to merchants. Naturally, an American Banker’s Association spokesperson denied it – instead saying the fees were “to encourage the merchant to be more careful.” I’m not sure I understand the difference there but that’s what they said.

At any rate, if you think the bank is your friend and wants to stop fraud, I suggest that you read the Huffington Post article above. You should probably put aside any preconceived ideas first. It might keep you from being quite so shocked.

According to a recent article in Money Talk News, credit card issuers are patting themselves on the back after a new report shows they’ve gotten rid of many “unfair” or “deceptive” practices consumers complained about.

My recent credit card statements have announced how the bank is now “allowing” me to opt in to “overdraft protection.” They don’t mention that it’s now the law, in the hope that I’ll think they are doing it to be nice. They’re also telling me that they won’t raise my interest rates on existing balances. Same deal. It’s now the law, not their great customer satisfaction goal.

The fact is that the CARD Act forced the banks to make these changes. To add to that, the banks are finding other ways to tack on fees to make up for the lost revenue. Watch for these:

We talked about some of the things they pulled before the law went into effect. Now they need to take a different road. Never forget that banks are in business to make money–lots of money. Have you ever seen a less than perfect bank building? Fees that the new federal laws won’t allow will be replaced by others. You can count on it.

I wish you all a wonderful Memorial Day holiday. As you enjoy it, and you should, please keep these two powerful images in mind as a reminder of what the holiday is about.

Thank you to all who served!

Earlier this month, Cambridge University demonstrated successful attacks on Chip and PIN technology. Nobody is surprised. After reading numerous reports from reputable sources, here’s what we’ve been able to determine.

First, it’s important to note that Chip and PIN has been ubiquitous in the UK for several years and is currently being deployed in Canada. There hasn’t been widespread use in the US yet but the technology is being pushed.

Apparently, nobody ever thought it was secure. I certainly didn’t because I don’t believe any credit card technology is secure; just that some is a little more secure than others. It’s been reported that HSBC in London, one of the world’s largest banks, issued this statement about the Cambridge announcement.

“Although they have raised a clear security concern with regards to chip-and-PIN, which we are taking very seriously, the problem highlighted is relevant to all card issuers and not just HSBC.”

Note that nowhere in that statement did they deny that the hack was a reality.

According to at least one report, the equipment needed to accomplish the hack was too big and bulky to go unnoticed. But there are others that claim to have seen and video recorded the attack and it went totally unnoticed. I haven’t found any posted video yet so I can’t say one way or the other. But I would ask you how much suspicion a person with a back pack or laptop bag would attract. My guess is, not very much. Cashiers don’t even look at signatures these days. Whether the hacking technology is palm sized or truck sized, the fact remains that it can be done.

As usual, what we’re seeing is that the banks have no incentive to make this, or any, technology secure because they can pass the liability off to others. In this case, it looks like it will be the cardholder. The reason for this, apparently is quite simple. The hack collects enough information from a transaction to make subsequent fraudulent transactions look like the PIN was entered. That puts the burden squarely on the cardholder.

Even more interesting is a report contained in a story from SecureIDNews. This story said that, “The Smart Card Alliance has reviewed the hack along with other industry organizations and concluded that widespread implementation of this attack is unlikely.” The mysterious part is that, according to Smart Card Alliance Spokeswoman Deb Montner, the Smart Card Alliance–to her knowledge–has reached no such conclusions and has issued no such statement.

I won’t go into how the hack is carried out. I’m not a security expert so most of it is over my head. If you’re interested, there are some details in a recent Store Front Backtalk article.

We probably won’t see any wide-spread hacks from this any time soon, but I believe that once they start, they’ll grow rapidly. Cardholders will pay the price.