The ink on recent headlines is still wet and not yet dry announcing the hacking loss of thousands of credit card information records from T.J. Maxx and Marshall’s.
As Brian Hansen demonstrated with one of the “tracked” cards, the card was gone in seconds and major purchases were being made all over the world within minutes. Cards became maxed out quickly. Billing cycles being what they are, by the time a cardholder’s statement rolls in it’s too late. Since no card was stolen, the arm wrestling begins with the card issuer of the liability on the charges. As the story unfolds Brian Hansen traces the femme fatal to Nigerian Internet Cafes where the countries number one sport is honing Internet skills for fraud. While Nigerian governmental officials try to root out the problem, “wink, wink”, the illicit activity continues. The Internet Cafes in Nigeria remain very popular. Dateline set up its own sting operation involving their own online electronic store using credit cards working in concert with a set up “special” delivery company to track the purchases and movement of goods using the stolen cards all over the world. Keep in mind, this is just one small segment examined. The scam is huge and ongoing. In this example additional hooks were set using the love angle to get the “assistance” of the pigeon to forward purchases to help win the “love” of the scam artist. This is the “new sting”, the “new rounders”, “new badger game” with a different face but with the same result, separate the mark from their money.
Feeling the heat of legitimate enforcement agencies worldwide something sinister may be under way. The online chat rooms serving as the clearinghouse for credit card scams may be moving their server access to Iran and out of reach of Internet sleuths trying to chase the perpetrators of credit card thief and identity theft. The stakes of the game are getting higher.
What’s consumers to do to protect themselves from this devastating assault? When it happens ones credit history can be totally destroyed and will require hours and hours to even begin to unwind the events to win back the consumers good credit. Police reports need to be filed immediately to form a basis of the case deflecting blame to the culprit where it belongs rather than the consumer. Every time a consumer uses the Internet their IP Address (Internet Protocol Address) is exposed to those who may wish to do them harm. It is possible to pinpoint a consumer’s location and thus reveal even more information that may be used to build a credit file to support efforts to defraud and scam.
The free online government site on new credit card scams is bulging with different wrinkles on old con schemes. A consumer has a permanent mark tattooed on their forehead as a “mark” screaming “Come and get me.” A consumer can do everything to protect themselves and yet a scammer is able to come in the back door and gains access to a consumers information by someone hacking into mainframes or other means outside the realm of normal protection.
What is a consumer to do to erect defenses against this stealth enemy? Limiting the number of cards would be a good start. Having a bevy of credit cards with little or no balances is asking for trouble. A caution here, if a bunch of cards are closed out all at once, it can plummet the credit scores. So over a year’s time one could shed the extraneous cards without adversely impacting the credit scores with all other things being equal. Obtaining a card with say a $500 limit would be good for online purchases to limit the liability. Even though there is a $50 loss limit on many cards, if a scammer opens a card in your name and a consumer does not find out about it for several months, the arm wrestling will begin with the credit card issuing company. One defaulted card can precipitate a case of “universal default” where all the other credit cards will have their interest rates accelerated to the full legal limit. A great 7.5% rate card could be accelerated to say 25% with one single 30 day late on a scammed card. It will take months and months to unwind and in the meantime a consumer’s credit scores are adversely impacted and this single action spills over to all the other credit criteria.
Services such as “PayPal” and such can offer a layer of protection. Even here, there are scams imitating the real company to gain personal information to perform a rip off. Many scams imitate the consumer’s bank to “verify” their personal information to perpetrate additional scams. Mailbox pilfering have been replaced by scalping data from mainframe penetration to access personal information on multiple consumers. Firewalls need to be toughened and hardened against such infiltration. Even more serious events happen for consumers when the employee’s laptops are stolen with millions of personal information allowing credit card rip-offs. Many of these forays turn out to be inside jobs with someone within the company selling the records.
Some how, some way, there must be a way to encrypt a consumer’s data either by requiring eye scans, finger print or other devices to squash the scammers. In the meantime, it’s up to the consumers to protect themselves.
If a consumer has much to lose, accounts must be checked for any unusual activity, a post office box might be utilized to prevent credit card rip-offs. In addition, there are several credit card fraud insurance companies are willing to offer protection against this peril for a premium and provide personnel and attorneys if necessary to fight against fraud and clean up the credit card history. Consumers, have protection against auto accidents, fire and hazard perils, workman’s compensation, job loss protection and even pre-paid legal. With this great exposure to loss and credit history destruction this can offer a level of protection to consumers whom might be exposed to dramatic financial losses.
Like any insurance a consumer must make a good faith effort to minimize losses. Like leaving the car keys in the ignition with a running motor and the door open, invites a crime. In another case, if all the doors and windows are left open in the home which by its very action may invite a burglary. A consumer has to make a minimum effort to protect their information, but it is good to have a layer of protection from an insurance company just in case.
Summarizing, with less than 1% of identity thieves ever being prosecuted this world-wide problem must be elevated to nothing less than the equivalent of a mugging or strong armed robbery. Where countries are being used, as a sanctuary for identity thieves such as Internet cafes’ then there must be diplomatic engagement with resulting foreign aid offsets against losses perpetrated from that foreign country. If the server being used by these scalawags is moved to rouge countries it will make enforcement even tougher. There must be a price to be paid for such outlaw activity. The ghosts of “Butch Cassidy” and the “Sundance Kid” have found new life on the Internet. A consumer needs to be vigilant and aware of their credit information or credit challenges will follow. A layer of insurance protection might be a needed tool in protecting a consumers credit history and financial reputation. A clean credit history means everything in getting the best terms and interest rates for any credit purchase or refinance. Keep a sharp eye out.
Dale Rogers
www.brokencredit.com
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