Article:
http://www.cbc.ca/consumer/story/2010/09/15/con-card-fraud.html
Summary:
This article discusses that an Ipsos Reid (commissioned by Visa) survey had discovered that about 20 percent of Canadians have found unauthorized charges on their credit cards. The main reason for these charges was narrowed down to accepting a free offer online or on the phone. The article also states that 78 percent of Canadians are aware that there are fraudulent offers online and on the phone, but many fail to apply their knowledge when it comes to online/telephone purchases. The U.S. Federal Trade Commission investigated into how easily consumers are tricked into giving away credit card information. One specific company they looked into was Central Coast Nutraceuticals, which was shut down by authorities after it had bilked customers of $100 million using quite a few deceptive tactics, such as false endorsements from celebrities and a "one time" free offer. The company had gained credit card numbers from claiming consumers needed to pay for shipping on their free product sample.
Connections:
I think this article relates to Chapter 14 because it mentions credit cards, which is a pretty prominent section in the chapter. Credit card fraud is very common these days, especially when they are combined with malicious scams such as the one mentioned in the article. Credit card fraud hurts both the consumer and the merchant businesses issuing the cards (Visa, MasterCard, etc.). Transaction fees are obviously charged to the cardholders, but an annual fee is also charged to the merchant by the bank for issuing credit cards. If credit card scams charge cardholders monthly under false claims, imagine the amount of revenue merchants could be losing because of it. Credit card transactions occur in three steps: they write up the sale on a credit voucher, run the sales slip through an imprinting device using the customer's credit card, and they give a copy of of the slip to the customer and keep two for the store. They are then forwarded to the bank along with a bank deposit. A cardholder may refuse to pay for a scam fee on their monthly statement because of the transactions steps.
Reflections:
I have never personally owned a credit card or shopped online before. If I really do need to order something online, I usually ask my parents to order it for me. They always thoroughly check the site before typing in their credit card numbers. Also, I try to avoid strange sites I've never heard of, and stick to trusted websites such as Sephora and A&F. Credit card fraud can be quite difficult to avoid sometimes, since some scam websites are made up so intricately it's hard to tell whether the site is legit or not. I think the best way to avoid these issues is to research something thoroughly before you buy, and always keep your guard up online.
