Monday, May 26, 2008

How do you deal with Credit Card Fraud?

Perhaps you may not aware that credit card transaction is not secure at all. As long as you’re using credit cards, there are chances that you may face the credit card fraud. When you have credit card fraud, how should you do with it? Most importantly how do you prevent it from happen again?


Types of Credit Card Fraud

Cloned credit card is the most common type of credit card fraud. As long as someone can get your credit card, they can clone your credit card by copying your credit card information on to a fake card’s magnetic stripe. It used to be very popular but no longer true after the government enforce all the credit cards that used must be implemented with the embedded “chip”. With this “chip” implemented, the cloning fraud can be prevented.

Surprisingly, this embedded “chip” is not enforced in U.S. I find out this every time when I have visitors from U.S and they always complain that their credit cards cannot be used in Malaysia. This is due to the fact that only the credit card with embedded “chip” can be used in Malaysia or perhaps the Asia Pacific.

Another common type of credit card fraud is online transaction. As long as they know your credit card number, 3 digits behind your credit card, and the expired date, they can purchase anything online on your behalf. This information can be easily obtained when you pay your bill using credit cards in a restaurant. Can you see how insecure the credit card is?


What should you do? Know your rights!

The first thing when you realize your credit card is lost or any transactions that do not belong to you, report to the bank as soon as possible. The second thing is you must know your liability and rights. Different country has different rules.

In Malaysia, the Bank Negara Malaysia’s credit card guidelines effectively limit a card holder’s liability for unauthorised transaction to RM250.
That means the bank cannot charge you more than RM250 for unauthorized transaction. This is providing that you do not take part in the fraudulent transaction and reported the lost or stolen credit card as soon as possible.

In Singapore, you have to pay for all the fraudulent transactions that occur before your card is reported stolen or lost. In UK, you’re limited to pay £ 50 for fraudulent transactions. In U.S. the maximum liability that cardholders have to pay for unauthorized use of a credit card is USD 50.


How to Prevent Credit Card Fraud?

  1. Periodically check that all your credit cards are still with you.
  2. Destroy all copies of credit card’s receipts, airline tickets and any documents that display your credit card numbers.
  3. Carry out online transactions only with reputable companies. Ensure that the websites have security features.
  4. Avoid responding email that request for credit card information.
Lastly, I would recommend you to copy down the Customer Services' Phone number to a safe place. It is located at the back for your credit card. Just in case when you lost your credit cards, you can call this number immediately.

I hope this helps. Have you experienced the credit card fraud before? Any tips to share?

11 Comments:

keeyit said...

A very detail post about credit card.

imDavidLee said...

good post!! but do u know how to do the limit RM250 for each transacion in malaysia??

ChampDog said...

I think the RM 250 limit is the Bank Negara (Malaysia) credit card guidelines law to protect us from fraudulent transaction with the condition that you need to report the missing card immediately. So we should not pay more than RM250.

I don't know how true is this as I never have this experience before. I get this information from the personal money magazine. I will remember this limit in case it happens to me in the future.

Not sure exactly if I answer your question. This is just sharing.

jamy said...

Champdog,

You know why we do not have that in US :"Surprisingly, this embedded “chip” is not enforced in U.S. I find out this every time when I have visitors from U.S and they always complain that their credit cards cannot be used in Malaysia. This is due to the fact that only the credit card with embedded “chip” can be used in Malaysia or perhaps the Asia Pacific.", fraud is a common thing in Asia Pacific but not here. A lot of people in Asia Pacific use more of their brains on frauds to make $ than people here who think of inventing products, pattern products in making $ and that make the whole world of difference in our finance , retail markets. But, of course if the country economy is going Souther and Souther and people lost jobs and jobs disappear, we might become 3rd world one day like Malaysia.

A lot of things/business and based on trust, so there is less 'government' enforce regime here.

If we find out any item in our cards that is not ours, we call the credit card company and they will waive it off, without any hassle.

The first culture shock I came here is the 'refund' policy here.

You can return practically anything you brought from store and bring it back and they would refund you the money. A lot of companies do not even require receipts except a picture ID, that is your driving license.

We bought a lawn mover in 2005, we did not like it after we mowed 1/2 of our lawn, we took back, get another one ,and did not like it and bring it back ,and bought another one and did not like it , bring it back and get the first one we bought.

Double edge sword: consumer is king.

But one thing Malaysia does not have, US have is "Credit rating or Credit score" .

A person credit score is extremely important for a person in the US. It determine how much a bank will lend you , what kind of house you can buy. Without good credit score, your life sucks in US. It is like the fortune teller 'palm line', 'face', 'birth date', in short, your fortune !

Jamy

ChampDog said...

I think you have a point. This reminds me when I was using my credit cards in U.S. some stores required me to show them my identification. I think this is probably how they avoid credit card fraud. But I don’t know if they do this is because of I don’t look like a local people there. However, I did remember I read a U.S. news (I think is CNN) mentioned about the serious issues of credit card fraud in U.S. Perhaps compared to Asia Pacific, it is still less.

I think the idea of “consumer is king” or refund policy in America is great but I do know that a lot people especially those are from Asia misused the power of this rights. Let’s look at CA State, majority of the people (I think is around 70%) are immigrants from Asia, I wonder if this “refund policy” still can be applied? I would by an OSIM massage chair…

Maybe we should implement the “credit score” as well in Malaysia… but would it help? I think when you’re applying for loan, the bank will do a background check on your credit history although we don’t really have the official score system.

Thanks for your comments. :)

jamy said...

Champdog,

After I commented, I had my lunch and I was thinking about the comment I have written. Then I realized we have the max $250 fraud insurance on all the credit cards here. I think the max you pay $250 is imposed in all credit card companies. I do not know how it works.

Yes, there is certainly credit fraud, but you must remember we have 300 million population so what you heard from CNN might represent a very small percentage compare to Malaysia 30 million population and the frauds you read from Straight times, Stars, Malay Mails etc...

I do not think the refund policy work in Asia. I am sad to say being an Asian myself but I have written a post in my blog titled, the only truth in China is lie. And a few Malaysians thought it was so true.

When I first started to blog, I mainly blogged on life here, I love to take pictures and post things that you would never see in Malaysia and I got a number of Malaysia commentators who wowed about the life here.

For eg. I have never closed my Florida room door (Florida room is like a sun room, it is an extension of the house), I leave a copy of bible and a jug of hard candy on our Florida room. If we have big parcels from UPS, the guy would drop the parcel or mail on the sun room. Our town is not an ulu town, it is quite a cosmopolitian town with the biggest state university in the South Eastern part of USA.

I like to take pictures whenever I travel and many times I come across shops which closed on Sunday or late evening have their water melons or produce placed outside of their shops when they closed their shops.

I think the watermelons and my hard candy will be stolen if they are in Malaysia, do you agree with me.

It is sad that our culture is so corrupted.

I remember reading one of Keeyit posts on her blog about one of her mom customers actually stole the dress from her mom [her mom sell clothes at home]. And when I read the post, I lamented in my heart and wonder when will our people change ? Next generation ? No way, if our children are taken care by uneducated Indo maids when our educated women slave themselves in the corporate world.

In US, it is done by private system, and in a commercial basis :
"I think when you’re applying for loan, the bank will do a background check on your credit history although we don’t really have the official score system.:

There are 3 major credit companies here in the US, where you can buy a copy of your credit score and history and there are ways to repair bad credits if your credit is not the best.

It is not only apply to bank loan, it can apply to when you go to a grocery store and you want to apply for the store credit card (remember we do not use cash here at all, we use credit cards most of the times, from grocery stores to electrical shops, we use credit card and it only takes 15minutes to apply a credit card from the store, all they do is do a credit check on you and issue you a credit card with the amount of credit according to your credit score, very simple.).

I think the companies will have to give and take cos these people also consist of a big chunk of consumer :"but I do know that a lot people especially those are from Asia misused the power of this rights. Let’s look at CA State, majority of the people (I think is around 70%) are immigrants from Asia, I wonder if this “refund policy” still can be applied?"

Jamy

ChampDog said...

I have the same feeling when I visited China but one thing that I must admire and respect them is they are a very good sales person. They know and understand the psychology of a human, what we need and what make us cannot refuse to buy their products.

Culture cannot be changed that easily. Not to talk about culture of a country, even the culture in a company (medium to big), it takes years to change. What about culture in a family? It takes years for my mum no longer complains me wearing slipper and shorts go outside. Maybe she just gave up. :D

In US, for big purchase (e.g. USD 5K), do they give you a call to verify? Here, they usually give a call and also especially for online purchase, they will give you call to verify. When we travel to overseas, we also need to inform them so that they won’t block your account. I have a friend travel to US but can’t use his credit cards at all because failed to inform the bank. This really pissed him off. :)

jamy said...

Champdog,

3 things I have to mention about our finance industry and consumer market here :

a. US finance ind. is more sophisticated than those in Asia.
b. Credit cards are not limited to banks alone, most retail stores issue credit cards : eg. Dell, Amazon, JC Penny, Sears, WalMart, K-Mart and the list goes on.
You can apply online or at the store. Your credit rating determine how much credit you are going to get from the stores.
c. It is a far more automated society, in short a DIY (do it yourself society).
Store assistance is not there to sell you products, they are the check-out counter cashiers or the return and refund personnel.
All marketing to get customers to buy the goods are done through medias :
i. TV (we have cable TV in most households and all you have to do is switch on CNN, and you are bombarded with the latest trendy goods.
Then we have a number of shopping channels where they mainly show you all the merchandise that you want to buy.
ii. Then we have internet.
iii. Then we have stores' weekly advertisement inserts that are included in your Sunday paper, or the alternative is the stores online version of their weekly advertisement.
iii. We have very informed customers in US, before we go to the store, most of us know what we want to buy, there are very little 'look see look see' kind of customers.

Say I want to buy a laundry washing machine and dryer, before I go to the store, I will do some homework to find out the kind of machine within the price range I want and go to different stores (online) and find out the pricing and specs.

Say I want to buy a laundry washing machine, these are 3 stores I would check pricing/specs.
Sears :
http://www.sears.com/shc/s/search_10153_12605?keyword=washing+machine&gobutton.x=22&gobutton.y=6&gobutton=find
Lowes home improvement:
http://www.lowes.com/lowes/lkn?action=productList&category=Washers&Ne=5000&N=0+1000089
Best Buy:
http://www.bestbuy.com/site/olspage.jsp?_dyncharset=ISO-8859-1&id=pcat17071&type=page&st=washing+machine&sc=Global&cp=1&nrp=15&sp=&qp=&list=n&iht=y&usc=All+Categories&ks=960

You actually study the specs and see what are the differences in each model, their functions and if that fit your needs.
Here, people do not depend on stores assistant to sell them products.

Retails stores here pay big bucks to pay advertisement companies to sell for them.

I think a lot of newly Asian immigrants might not use to the DIY mentality when they first come here cos you are the ones who serve yourself.

When you go to stores, you hardly see any sales reps or sale assistance but there is a customer service station where you can go if you have any questions. And most stores now have self-check out counters.

$5k is a lot of money in the US. Our money is like like Indonesian rupiah where everything cost like thousands dollars.

All credit cards have their web site where you can customized your own preference. You are the ones who set your own alert not the bank or the stores. It is call privacy law.

Frankly, I have never buy anything $5k with any of my credit card at a time.For eg :
Household products :
Fridges cost range from $100 to 2k.
A $300 to $500 fridge would suit fine with most middle income family.
Washer and dryers cost range from $200 to $1.5k and likewise from $300 to $400 is likely to be purchased by most middle income family.


Like I say credit cards here are not only issued by banks, all stores issue their own stores credit card.

I really cannot think of any household products that cost 5k. Even a plasma TV cost range from $300 to $3.5k

When my hubby went to Malaysia, he thinks everything is very expensive, when he see everything cost $100, $1000, I told him to divide by $3.5, and he said, oooh.

Aiya, don't talk about Malaysia banking system lah, I am piss by most things that are done in Malaysia. Don't think I am not patriotic or that kind of stuffs, I just think we should be more efficient than what we are now. It is not like none of our people never be educated in more advance Western countries, but these people did no good to Malaysia, esp. a lot of government sponsor students, waste tax payers money only.

Talking about Malaysian banking system, I vomit blood when I have to deal with them.

In my own experience a few years living in Malaysia after I left for Australia, the bank I have a fair bit of respect is Public bank. But, man the public man in Kuching is darn backward.

I have seldom go to the bank in US, most of our transactions are done online.

My hubby and my pay are bank online.
We pay our electric , telephone online.
We do transfer of $ online all the time, eg. from bank to online stock broker, from bank to credit cards company.

The only time I go to the bank is when I want to send some $ home to Malaysia during mother day or father day as now my bank still does not do TT online [I told them they should and they agree with me]

When you go the bank here in the US, you don't see lines and lines of people. When I was in kuching, to wait for your turn, it takes more like 20 minutes, for us who are so used to convenient, that kind of system is really 'cannot pakai'

America is overall a nice place to live outside of L.A or N.Y.

I hope I understand your questions. Come visit me and stay in my country home in the future when you can make it. I am sure you will really enjoy the life here. I like it here much more than Australia. To me, Australia is very 'ulu', they are like 10 years behind Hong Kong and of course way behind here.

There are a few things I like it here :
1. Freedom : the sky is the limit to achieve what you want to do.
2. Opportunities : More so than anywhere I have lived before.
3. Efficient : Everything is much well planed and structured than anywhere in the world; and that make life a lot easy.
There is street (vertical) and Avenue (horizontal); and if that is not enough, install a GPS system that navigate wherever you want to go.
4. Equality : All of us are equal here regardless of race, religion, gender and etc...
There is no Datin, Datuk or Sir.

and the list goes on. It is a country for achievers, whoever want to achieve, there is nothing to stop them, of course, there are a lot of losers for they choose to be losers themselves.

Jamy

ChampDog said...

I like the idea of DIY because those sales persons in the store or shopping mall are really annoying. They always like push you to buy the products even thought you have told them many times that you’re not interested. This is the part I hate.

As for the Malaysia banking system, I vote the HSBC bank is the best and the second one will be the Public Bank. Ya, I agree among all the local banks, Public Bank is the best. Talking about Government in Malaysia, sometimes they really make it not proud to be Malaysian at all. In fact, this is a very sad thing.

If I have a chance to visit Florida, I will definitely visit you. Probably I can take the company expatriate package offer in U.S. Thanks again for all these sharing.

CKW said...

i have been experience this case lately and the bank keep asking me to pay all the unauthorised transaction...

ChampDog said...

Does the bank agree it is unauthorized transaction? If yes, then it shouldn't charge more than RM250.


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