Credit Card Debt Management

There is a new e-mail scam circulating now, according to Web Host Industry News, promising “Casino Rewards” for those who sign up for a credit card. The e-mails claim to be sent by American Express, Visa or MasterCard, in conjunction with 12 major U.S. international banks. It promises a credit card with a $100,000 spending limit, or 10 days in a premiere hotel with $30,000 spending cash.

The e-mail offers a click-through link to an informational web site with a drop-down list of banks. Scam victims choose their bank and are then sent to a “mirror” web site that looks identical to their online banking site, where they log in with their username and password. All is seemingly normal, except the site is a phony and is capturing online banking login information for fraudulent use.

E-mail scams, also known as “phishing,” are a prime way for scam artists to wreak their havoc in the 21st Century. Technology allows everything to appear normal, and the same applies to telephone scams. Con artists can actually “mirror” a legitimate telephone number, with a local area code and everything, so nothing appears suspicious on Caller ID boxes. It sets the victim at ease, just like “mirroring” a web site with which they are familiar. According to the Anti-Phishing Working Group, the financial services industry is the most targeted of all when it comes to e-mail scams. That industry served as the target of e-mail scams as much as 93.8% of the time in November 2007, the group reported.

The bottom line to remember is if it sounds too good to be true, it probably is. If there’s any doubt, call the bank or credit card company itself and ask for more information. Also remember that banks and credit card companies will never, ever ask for your login information or account numbers, period.

It seems everywhere you look, the media is obsessed with the rapidly increasing value of Visa and MasterCard shares. Meanwhile, another credit card story has died down — the one about government purchase cards being abused by federal employees, allegedly for things like online dating services, lingerie and iPods. Well, now a group of federal legislators are aiming to bring the controversy back into the limelight (and, undoubtedly, increasing their own popularity among their constituents at the same time).

U.S. Rep. John Culberson (R-Texas) went so far as to say employees who misuse government purchase cards “should be fired immediately and face charges.”

It makes sense, considering the “average Joe” has to face criminal punishment of some type if caught misusing a credit card belonging to another person. The Houston Chronicle, where Culberson’s comments appeared, recently shed light on the fact that NASA employees were among those who misused the federal credit cards. According to the news article:

“The problems have persisted despite at least five internal reports issued since 1997.”

An interesting development in light of the ongoing effort by House members to pass a bill authorizing extensive audits of government employee spending and ultimately holding those employees more accountable. A companion bill in the Senate has passed committee, but has not seen much action on the Senate floor in recent weeks, according to the Chronicle. Maybe (hopefully) developments like the NASA debacle will be just the motivation needed to keep the bill atop the list of priorities.

Virtual credit cards are certainly nothing new in the world of online shopping. After all, they’ve been around almost seven years, but they may not have received due attention in the past. Also known as substitute credit card numbers or controlled payment numbers, this technology offers online shoppers a free and highly effective layer of protection against identity theft.

According to the Sound Money Tips blog, MBNA, Citibank, Discover and Paypal all offer this free service to customers. All you have to do is sign up, download the software, and enter your credit card info (viewable only to the customer and the bank).

Some services limit spending to one merchant or venue only. Other services do not place restrictions on spending, but do generate a different “temporary number” with each online purchase. This temporary number is the only thing hackers can see, whether they eavesdrop at the point of purchase or hack into merchant records after the fact.

Many consumers have snubbed virtual credit cards because they are viewed as unnecessary in light of the fact that credit card companies generally do not hold customers liable for fraudulent purchases. However, the bigger picture is that online credit card fraud can turn into a bigger case of grand-scale identity theft, from which it takes a lot of time and money to recover. And who really wants to deal with that?