Saturday, March 9, 2013
The Confessions of a Credit Card Thief
If you use a card, credit or debit, there is a risk that your account will be compromised. That is true even if you are very careful. My credit card has been compromised on two occasions. The first time the management of my credit union suspected an inside job. Although the thief was never caught, he or she was most likely an employee of my beloved credit union. On the second occasion, my credit card company flagged a suspicious transaction. After some research, I discovered that the thief had made a purchase from a website that was officially closed through a third party, something similar to PayPal. Evidently the merchant account was still open even though the website was closed. It wasn’t difficult to get those charges reversed, but I was left without a credit card for a couple of weeks. My wife and I share one credit card account. At times I think I should get a second card for just this kind of eventuality. In an article entitled, Secrets of a Former Credit Card thief, the author interviews Dan DeFelippi, a convicted credit card thief who avoided hard time by copping a plea and going to work for the U.S. Secret Service. DeFelippi reiterates all the stuff we already know, but it worth revisiting this material. DeFelippi is not the first thief I have heard who suggests that credit cards are safer than debit cards. He points out that debit cards access real money, your money. While you will probably be made whole if you are a victim of fraud, the burden of proof rests with you. The bank will require you fill out a lot of paperwork. Processing this paperwork takes a lot of time. He also indicates the issuers are quicker to flag potential fraud on credit cards than with their debit cards. Once my card was shut down when my wife tried to buy a pair of shoes on line in England. Since the charges hit when we were out of town, I didn’t discover the problem until I tried to pay for dinner using my card. Good thing I was carrying enough cash to cover the cost of our meal. DeFelippi bought credit card information on line for $10.00-$50.00 per card. Some of this information was obtained from waiters and waitresses who use handheld skimmers to copy the information off of the magnetic strip on the back of the credit card. Some of it was obtained from fraudulent websites that exist to steal credit card information. Some of these sites actually will deliver a product but theft is their business. DeFelippi recommends that you limit your online purchases to merchants you know are reputable. Obviously, never use a website without a secure link for credit card transaction (https web address). He also cautions against making any purchases through WiFi connections; consider any such connection as compromised. DeFelippi states that checking activity on your credit card accounts EVERY DAY! is the one most important thing that that you can do to prevent and limit your exposure to credit card fraud. He suggests mint.com a free service that will collect all this information in one place. Allthough phishing schemes using phone and email marketing still exist, most consumers know enough never to give out any credit card information to anyone who asks for it on an unsolicited phone call or through an email request. Unfortunately, this kind of fraud is still perpetrated against the elderly who are not tech savy. DeFelippi doesn’t like ATM machines. He prefers to limit his use of these devices to those found at a bank. There have been too many instances where skimmers have been installed in ATM machines located in bars and convenience stores. Realize you are at risk of identity theft every time you use plastic. We can’t live without those cards anymore, but if we exercise caution we will probably be OK, at least most of the time. Also, this might be a good time to check out identity theft insurance. You might be able to add an identity theft rider to your existing homeowner’s policy for a relatively small sum.