Credit card fraud is screwing all of us

Funny, just earlier today, someone tried to scam my credit card details outta me, I had a conversation with someone else about credit card fraud, earlier this week I got screwed by my card provider "oh, our card can't be used online, only in person" "WHAT??!"..

Now, just spotted on Batterystation's CPF Special page:

New foreign order policy:
Some of you guys are going to hate us for this, but due to pure numbers (dollars) and a few clearly dishonest transactions (received goods and issued chargebacks) we no longer ship any foreign orders paid by credit card or Paypal. I am sorry about this but our foreign orders for the year did NOT break even due to the crooks and lost packages. Military APO/FPO ect. orders are not considered foreign orders and are no problem. We will still continue to ship to certain countries with orders paid by money order. In short, if you have paid by credit card in the past and are in our system you are fine. If not, a money order will be required. We have resumed shipping to all of the previous countries that we were shipping to but now have to have payment by money order.

Note that this is not aimed at Batterystation but rather a comment about card based payments in general, but the way credit card fraud is going, very soon we might as well cut up all our cards and throw them in the bin because they are all going to be USELESS - not accepted anywhere.

Guess I shouldn't have applied for a new card, but Paypal needs it to validate an account.. I guess that's all they're good for. Wasn't validation and realtime card verification, 3 security checksum digits on the back of the card, shipping only to billing address supposed to protect us legit, honest international users? What the h3LL am I supposed to do now? There are sincerely times where I wish I wasn't stranded where I am, but...

Hi Kevin,

You're right about the "fraud" bit, but the biggest part isn't the small percentage of people who are trying to run some scam.

The biggest fraud being perpetrated with credit cards is by the banks and the credit card companies themselves.

Think about it. If a merchant wants to accept credit cards, they will pay a minimum of 3% of every transaction directly to the CC company. Then, your CC company/bank charges you interest on that same purchase. So the CC company just made money on both ends of that deal.

Now say someone misses a payment, or has a non-CC related incident that reflects badly on their credit report. Now the CC company jacks up your interest rate even higher. I understand the theory behind this. That if you are a credit risk, you pay more for the priviledge of having a credit card. But the problem here is that they still hand out a very high credit limit while simultaneously raising the intrest rates.

So now the CC company is offering even more credit at higher rates to the people who truly cannot afford to pay it off. So now they're locked into a cycle where they keep paying the CC company, but they can't pay off the balance because the interest is high. So now they're getting charged interest on the interest, etc.. There's something inherently corrupt about a CC system where it takes you 20 years on average to pay off a $500 charge at the minimum payment.

So now we have the debit card. An ATM card that also works like a credit card, so they can't screw you on the "credit" interest, right? Well guess again. The first thing the bank tries to do is sign you up for their "overdraft protection" service. This is basically a credit card that you can't even use until your checking account is completely empty. My bank offered me up to $5,000 in "overdraft protection" with my debit card. You have to wonder why a bank would offer you a $5,000 credit card that you can't use until you have no more money. Well, it's simple, you have direct-deposit for your paycheck, so the bank will get the money, plus the interest. It's like a credit card that takes more work to not pay it.

So you decide to forget about the credit-card aspect of your debit card and just use it as an ATM card. Well now you want to get some of your money from the machine nearby. If that machine isn't owned by your bank, now you end up paying ~$2.00 to whomever owns that machine just to get your own money. And don't do this too many times per month, because your bank will start charging you to do this too! Mine charges me after 10 ATM transactions, including those at stores equipped to take ATM cards.

Now correct me if I'm wrong here, but weren't the banks singing a different tune when they introduced the ATM? Didn't they promise us that they could save more money, get more done with less, and pass that savings on to us if we all just used ATMs? Didn't they promise us that immediate savings were to be had simply by not using up a live bank teller's time just to get some cash? Well what the hell is this crap then? If I go to my bank and withdraw some cash from a live teller, it costs me nothing. Not diddly squat. But if I walk across the street and stick my card into a machine, it suddenly costs $2.00 to use the machine and my bank tacks on another $1.00 because it's the 11th time I did that this month.

I mean, do the banks really want people to start taking up their employee's time, all the time, just to get some cash? What happened to the promises they gave us about "saving money" and such.

They complain that Bank-B is charging them $X to make the ATM transaction since Bank-B owns the machine. Ok, then, so why is Bank-B charging me too? They can't both be charging me for the same damned transaction, right? On top of that, you're telling me that it costs at least $2 just to send some bits of data from Bank-A to Bank-B and back?

I was in San Antonio not too long ago and needed some cash. I made the unfortunate mistake of going to a Bank of America ATM to do it. Now this machine was amazing. Color screen, speaker system.. Why I wondered? Just to spit out some cash.. Well, as I was waiting for the cash to arrive, this thing starts playing ads for chocolate bars and soda! So now they charge me $3.00 right at the machine (a more expensive one than usual), then they make even more money by selling ads, then my bank charges me another $1 to pay for the transaction! You have got to be kidding me here!

So I really don't feel for the plight of the banks when they say that some small-time huslter just swindled some guy out of $3,000 and that the bank is going to have to take it as a loss. It shouldn't be a big deal to them since they are making an order of magnitude more than that every day in CC interest payments, merchant fees and ATM fees. And selling advertisements at the ATM if you're the particularly inventive BoA.

pb

Being out 12 hours a day I ship stuff to my parents and bill it to my apartment. When an order is over 200 bucks they will not ship it unless I add the address and you can only have one address for a checking account when i use my debit card. So, I just order several smaller orders in those cases. Never had my card stolen or scammed.

The irony is that my debit card is the most valuable asset I have. Not only is it accepted online, they don't screw me on the overdraft facility - they simply informed me that no cash, no approval. Suits me fine; I don't want to spend beyond my means. I am especially sore about the other card. Visa.. all it takes? I DON'T think so....

But you're right about the banks making on both ends of the deal. It's just that there isn't a single payment processor which doesn't take advantage of our miserable situation, to get money from point A to point B. I'd sooner sock the cash under my bed, but it doesn't help me with Internet purchases.

MO's aren't much better, there is a very long and boring tale of how I got shafted by one of the more well known MO providers recently. I showed up at their head office in my city and they told me "We can't cash this" well.... well done! It's their own damned MO with their big fat company letterhead and watermark on it and they can't cash it? Uhh...then, WHO CAN?

I'd pay cash at the end of the day, but then again, I'm not in the US, so unlike the greenback, cold hard cash doesn't do me much good either. What wouldn't I give..

I pay every single possible transation with a credit card. At the end of the month, I pay the balance in full. I have three credit cards, one of which pays me back 1.25% of everything I purchase and I have NEVER paid a single penny of finance charges. You guys want to complain about interest rates and say that big bad credit card companies are luring the poor innocent people into spending more? Oh please. I guess there is truely no more personal responsibility in this world.

I used to be a debit card user. Now I try not to ever carry one. Why? You lose it or someone gets your number and info and someone can easily go on a buying spree. Well, thats not any different from the credit card you're thinking. Wrong. With the credit card, end of month comes, I see bill and 5 thousand dollars of spending in Tiajuana and I complain and refuse to pay. Lets try that with debit card. Same thing happens but in this case, your money is ALREADY gone. Yes, the bank is apologetic, and they'll get your money back, maybe in a few months or even a month if they are quick. But what if you needed that money? Think of all the bounced checks and all the potential repercussions because those checks didn't go through (like your mortgage). Nope, credit cards are great and in the hands of a prudent user, should be used for everything possible.

But we can't expect people to be prudent can we? /ubbthreads/images/graemlins/icon6.gif

Mark

My bank reimburses for foreign atm fees.

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Minjin said:
I pay every single possible transation with a credit card. At the end of the month, I pay the balance in full. I have three credit cards, one of which pays me back 1.25% of everything I purchase and I have NEVER paid a single penny of finance charges. You guys want to complain about interest rates and say that big bad credit card companies are luring the poor innocent people into spending more? Oh please. I guess there is truely no more personal responsibility in this world.

I used to be a debit card user. Now I try not to ever carry one. Why? You lose it or someone gets your number and info and someone can easily go on a buying spree. Well, thats not any different from the credit card you're thinking. Wrong. With the credit card, end of month comes, I see bill and 5 thousand dollars of spending in Tiajuana and I complain and refuse to pay. Lets try that with debit card. Same thing happens but in this case, your money is ALREADY gone. Yes, the bank is apologetic, and they'll get your money back, maybe in a few months or even a month if they are quick. But what if you needed that money? Think of all the bounced checks and all the potential repercussions because those checks didn't go through (like your mortgage). Nope, credit cards are great and in the hands of a prudent user, should be used for everything possible.

But we can't expect people to be prudent can we? /ubbthreads/images/graemlins/icon6.gif

Mark

[/ QUOTE ]

Exactly. Although I have mad my bank back out a fraudulent transaction. Money was back the same day.

But, I can't say enough good stuff about american express. Those guys are like pit bulls when it comes to incorrect charges on your card. One call to them, and that's it..... no more problem.

As someone who has sparatic employment, a credit card or two has helped me make ends meet. Who the hell would give an unemployeed person 10 grand in credit and let him pay it off at a fraction of the total balance for an infinite number of years? You just cant go to a bank and get an instant loan or credit line with no income or next to nothing.

As for the universal default, Ive robbed dominion poiwer to pay verizon and have yet to experience that fear. Ive even skipped a payment to one credit card to pay the other and was just charged a 15 dollar fee that i called and got removed to pay another card. Then I was late on the other card, got a late charge and called and got that dismissed.

To top it off, I over drafted my bank account too. The bank covered the drafts and just charged me 30 bucks. I was unable to get that removed or reduced, but hey, at least I didnt experience the charges from the person I made the payment to.

All hile credit cards for the finanically challenged.

[ QUOTE ]
pbarrette said:

Rant snipped

pb

[/ QUOTE ]

So live on cash and stay off the grid...

DISCLAIMER: I work for a Credit Union.

I started out addressing each of your points but it just got too long. The main point I see is that you are banking with the wrong financial institution. Fees are part of life but it sound like they saw you coming and you haven't done a thing to keep them from fleecing you.

Step one in almost anything is to be informed. Do some research and vote with your cash.

OK, I think the thread has gone in a totally different direction than I expected.

The main gist of my rant was, here I am, I have money and honest intentions as a buyer of a product, and I can't give it away because nobody will take it.

Well,

I'm not saying I don't use credit cards or ATM cards, nor am I some paranoid freak who spots conspiracy theory in everything.

I'm just saying that credit card companies are encouraging people to get in over their heads because it helps their bottom line. Don't think, even for a second, that the CC companies are in this to help people out. They are in it to make money, period. They will do whatever they can legally get away with to make more profit because it's a business and they don't care about the people with problems.

I also pay my CC's in full before the due date. But I also limit my spending with credit cards to ensure that I am able to do this.

As cobb stated, who would give an unemployed person $10K in credit with no visible income? I could understand $1,000 or so, but $10K with no income is absolutely insane. It's like they are begging you to spend money so you can't pay off the balance.

As for the ATM fees, I'm from Iowa, so I guess I have a bit of a beef there. In the 1970's, when ATMs first came out, the State of Iowa enacted laws preventing fees from being passed to customers. The state also massively subsidized the ATM infrastructure, providing a central clearinghouse for transactions and giving all banks, regardless of size, an equal say in rules and pricing.

That seemed to work pretty well for ~26 years, until 1996 when Bank of America and Wells Fargo decided to start lawsuits challenging these laws and regulations. They eventually won in 2002 because the federal courts ruled that states were not allowed to pass laws regarding interstate banking.

Six months after the no surcharge law was struck down in Iowa, the challenging banks generated $5 million in revenue from surcharges in Iowa alone. Nationwide, $2.2 billion in surcharges were paid to banks in 2001.

So thank you for listening to this "rant", because I'm sure that the banks aren't really trying to make any money off of us. They're just providing a service and charging us what is necessary to cover their operating costs. Sure, that's it.

Now please note, Saoman, that I did not refer to "Credit Unions" at any point in any of my posts. CU's are non-profit organizations that are owned by their members and really do operate "at cost". It is also interesting to note that the credit unions of Iowa were all opposed to the BoA/WF lawsuit, and all of them now participate in the original network which continues to operate fair, balanced pricing schemes and doesn't issue a customer surcharge to cardholders of institutions participating in this network. My bank also participates in this network, so if I use a machine from one of the participating institutions, I don't get charged, and it isn't considered "foreign". Since my job has me currently living in Germany, however, all ATM's are "foriegn."

pb

As a business person, I just hate it when something is dogged when it has its uses. My dad watched a special on credit cards on pbs and now he is against them. Yes, they are in the business to make money, they make money by giving you money. I just look at interest and fees are rent or the expense to use money. Now how you use it is up to you. Think gun companies make guns just for killing people?