Identity theft is the stealing of another person’s identity and using it as your own. Personal information is stolen by identity thieves through various sources, and used to make credit cards and other identity documents. Fraudulent credit cards are the most common result of identity theft. There are various ways in which thieves gather details of someone’s identity. The most common methods are listed below:
Retrieving information from redundant equipment which has been disposed of carelessly, e.g. at public dump sites, information given away without proper sanitizing etc.
Stealing payment or identification cards, either by pick-pocketing or surreptitiously by skimming through a compromised card reader
Eavesdropping on public transactions to obtain personal data
Stealing personal information in computer databases
Advertising bogus job offers (either full-time or work from home based) to which the victims will reply with their full name, address, CVs, telephone numbers, and banking details
Browsing social network sites, online for personal details that have been posted by users.
These methods allow thieves to gather a surprising amount of information and get a credit card issued in your name. The net results of such a measure are disastrous. Vigilance and discretion must be exercised in keeping personal details from being stolen.
Credit Card Hijacking by Cancellation Barrier
Another common form of credit card hijacking is used by subscription companies, the payments for whom are routed through a credit card. The organization creates certain barriers that make it difficult for a credit card user to cancel his subscription easily, and as such continue to charge him for services he no longer desires or needs. This is in direct contrast to the traditional method of subscriptions, where the subscriptions have to be proactively renewed, and are cancelled or suspended if payments are not on time. The credit card makes the user’s money more easily accessible to the subscription company, and the liability resulting from inactivity falls on the user’s shoulders, rather than the company that is providing the service.
Also, since the general monthly cost is low, such practices can go unnoticed for months at a time. Hence, the user must maintain a close eye on his monthly bills.
Credit Card Hijacking by Negative Option Billing
Negative option billing is a business practice in which goods or services are provided automatically, and the customer must either pay for the service or specifically decline it in advance of billing. Thus, if the user makes no response to the bill sent by the company, he is assumed to have agreed with the transaction and the amount is debited from his credit card. This is a practice which is not illegal yet, and many credit card users have been exploited because of such tactics.
Sources:
http://en.wikipedia.org/wiki/Credit_card_hijacking
http://en.wikipedia.org/wiki/Identity_theft
Showing posts with label Credit. Show all posts
Showing posts with label Credit. Show all posts
Thursday, May 28, 2009
Credit Cards for Small Businesses
Small business owners who need a quick cash inflow, but are unsure where to borrow from, should consider using a credit card. Business credit cards represent an easily accessible source for a loan, although the availability is offset by the high risk incurred in doing so. However, despite the dangers, there are countless examples of a credit card being used as a financing source.
Larry Page and Sergey Brin's start up of Google was financed by credit cards to buy the necessary computers and office equipment and a terabyte of memory, to start the search engine. Filmmaker Robert Townsend and Director Kevin Smith have used credit cards to finance various movies. Famed hedge fund manager Bruce Kovner began his career (and, later on, his firm Caxton Associates) in financial markets by borrowing from his credit card.
Taking note of such trends, credit card companies offer business credit cards that can be used for financing various projects, and also for the day-to-day running of the business. Visa and MasterCard both offer credit cards that allow business expenses to be charged to them, and easy access to secondary and add-on cards with the same features. Such cards offer reward points, air miles and other fringe benefits as an incentive for using them. They have low-interest rates, to increase sales and offer small businesses a way to cut down on operating costs, as well as providing a speedy method of emergency cash injection.
Another advantage of business cards is that they allow the owner to track his employees’ spending, and also makes his accounting more efficient and easier to manage.
However, business owners who borrow on plastic should strive to use their business credit card for monthly expenses and pay off their balance in full each month. Also, they should make sure to check their account summaries regularly. They should also generally use only one business card at a time, as it sometimes becomes difficult to pay off several balances.
Business owners and administrators should consult issuing banks or financial institutions about the feasibility of a credit card for their business.
Source
http://www.businesscreditcardsite.com/why-business-credit-cards-are-useful-to-your-business/
http://www.businesscreditcardsite.com/10-valuable-tips-about-business-credit-cards/
www.creditorweb.com/categories/business-credit-cards.html
Larry Page and Sergey Brin's start up of Google was financed by credit cards to buy the necessary computers and office equipment and a terabyte of memory, to start the search engine. Filmmaker Robert Townsend and Director Kevin Smith have used credit cards to finance various movies. Famed hedge fund manager Bruce Kovner began his career (and, later on, his firm Caxton Associates) in financial markets by borrowing from his credit card.
Taking note of such trends, credit card companies offer business credit cards that can be used for financing various projects, and also for the day-to-day running of the business. Visa and MasterCard both offer credit cards that allow business expenses to be charged to them, and easy access to secondary and add-on cards with the same features. Such cards offer reward points, air miles and other fringe benefits as an incentive for using them. They have low-interest rates, to increase sales and offer small businesses a way to cut down on operating costs, as well as providing a speedy method of emergency cash injection.
Another advantage of business cards is that they allow the owner to track his employees’ spending, and also makes his accounting more efficient and easier to manage.
However, business owners who borrow on plastic should strive to use their business credit card for monthly expenses and pay off their balance in full each month. Also, they should make sure to check their account summaries regularly. They should also generally use only one business card at a time, as it sometimes becomes difficult to pay off several balances.
Business owners and administrators should consult issuing banks or financial institutions about the feasibility of a credit card for their business.
Source
http://www.businesscreditcardsite.com/why-business-credit-cards-are-useful-to-your-business/
http://www.businesscreditcardsite.com/10-valuable-tips-about-business-credit-cards/
www.creditorweb.com/categories/business-credit-cards.html
Hidden Payments
Merchants who accept credit cards must pay a processing fee ranging from 1- 6 % of the purchase price. These hidden costs and hidden payments are transferred to the consumer in various ways.
The first method is the most commonly accepted one of a surcharge on the payment, leading to the price being higher than the marked price. The problem has been compounded in India, where the credit card companies have not asked for “merchant agreements”, which provide that the processing charges will not be added on by the merchant. This has led to credit cards being used less frequently than they might be, a disadvantage to the issuer as well as the merchant.
A second method is simply marking up of the prices of all items in the shop, leading to the surcharge being hidden in the retail price. While the MRP does restrict this to some extent, the net result is that people who pay in cash are paying as if they were using a credit card. Thus, a part of the revenue earned by the credit card companies comes from people who do not even own a credit card!
The flip side is, with the boom in the credit card market in India, greater volume of credit card sales allow the merchants to keep their existing price structure, and still not lose any profit on paying the processing fee, since the credit card companies have relaxed their rates, as a measure to boost sales and increase the acceptability net. . Credit cards also allow for convenience in repeat sales, and the processing fee is greatly offset by the increased convenience. Also, the processing fee is simply an equivalent payment to the costs incurred in counting, transporting and depositing the cash payments.
Whichever way you look at it, using a credit card can entail certain hidden payments consequences of which must be closely examined before using a credit card.
Source:
Wikipedia
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/08/AR2007030802178.html
Statutory Instrument 1990 No. 2159: The Credit Cards (Price Discrimination) Order 1990
The first method is the most commonly accepted one of a surcharge on the payment, leading to the price being higher than the marked price. The problem has been compounded in India, where the credit card companies have not asked for “merchant agreements”, which provide that the processing charges will not be added on by the merchant. This has led to credit cards being used less frequently than they might be, a disadvantage to the issuer as well as the merchant.
A second method is simply marking up of the prices of all items in the shop, leading to the surcharge being hidden in the retail price. While the MRP does restrict this to some extent, the net result is that people who pay in cash are paying as if they were using a credit card. Thus, a part of the revenue earned by the credit card companies comes from people who do not even own a credit card!
The flip side is, with the boom in the credit card market in India, greater volume of credit card sales allow the merchants to keep their existing price structure, and still not lose any profit on paying the processing fee, since the credit card companies have relaxed their rates, as a measure to boost sales and increase the acceptability net. . Credit cards also allow for convenience in repeat sales, and the processing fee is greatly offset by the increased convenience. Also, the processing fee is simply an equivalent payment to the costs incurred in counting, transporting and depositing the cash payments.
Whichever way you look at it, using a credit card can entail certain hidden payments consequences of which must be closely examined before using a credit card.
Source:
Wikipedia
http://www.washingtonpost.com/wp-dyn/content/article/2007/03/08/AR2007030802178.html
Statutory Instrument 1990 No. 2159: The Credit Cards (Price Discrimination) Order 1990
History of the Credit Card
The concept of using a card for purchases was invented in 1887 by Edward Bellamy and described in his utopian novel Looking Backward. The first version of the credit card was used in the 1920s, in the United States, as an alternate means of paying for petrol. In 1938 several companies started to accept each other's cards. It was not until 1950 that Ralph Schneider and Frank X. McNamara suggested that credit could be used for variegated transactions, in order to consolidate multiple cards. The Diners Club card, which was created partially through a merger with Dine and Sign, was the first of such general purpose charge cards and was called a Charga Plate. It was different to contemporary cards in that it required the entire bill to be paid with each statement; it was followed shortly thereafter by American Express and Carte Blanche. Bank of America created the BankAmericard in 1958, a product which eventually evolved into the Visa system ("Chargex" also became Visa). MasterCard was inaugrated in 1966 when a group of banks started the MasterCharge scheme. It was also the year when the first non-US credit card was issued by Barclays’ Bank in the UK.
At the time, there was no rapid method of communication between banks in different regions, and credit cards allowed travelers to procure credit, even when they were far from their local bank facilities. Credit cards became very poplar in the USA, UK and Canada.
In contrast, many cultures were much more cash-oriented and had developed alternative forms of cash-less payments, like Carte bleue, or the EC-card (Germany, France, Switzerland, among many others). In these places, the uptake of credit cards was initially much slower. It took until the 1990s to reach anything like the percentage market-penetration levels achieved in the US, Canada or UK. Till date, In many countries credit card acceptance still remains poor due to the lack of trust in the banking system of the country.
There are now countless variations on the basic concept of revolving credit for individuals (as issued by banks and honored by a network of financial institutions), including organization-branded credit cards, corporate-user credit cards, store cards and so on. The credit card has had a rapid and eventful history, and is fast replacing paper money as the most popular means of payment in our cities today.
Source
En.wikipedia.org
PBS Documentary “Secret history of the credit card”
At the time, there was no rapid method of communication between banks in different regions, and credit cards allowed travelers to procure credit, even when they were far from their local bank facilities. Credit cards became very poplar in the USA, UK and Canada.
In contrast, many cultures were much more cash-oriented and had developed alternative forms of cash-less payments, like Carte bleue, or the EC-card (Germany, France, Switzerland, among many others). In these places, the uptake of credit cards was initially much slower. It took until the 1990s to reach anything like the percentage market-penetration levels achieved in the US, Canada or UK. Till date, In many countries credit card acceptance still remains poor due to the lack of trust in the banking system of the country.
There are now countless variations on the basic concept of revolving credit for individuals (as issued by banks and honored by a network of financial institutions), including organization-branded credit cards, corporate-user credit cards, store cards and so on. The credit card has had a rapid and eventful history, and is fast replacing paper money as the most popular means of payment in our cities today.
Source
En.wikipedia.org
PBS Documentary “Secret history of the credit card”
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