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.
Although I don't own a credit card or a debit card, this was very fascinating to read about. Since they have done a survey, I supposed they should crack down on these "scammers". Although I usually hang up on those calls, I realized the many elderly people who may be deceived by such fraudulent offers. Indeed, credit card fraud is very common and many people are affected- it causes trouble for both the cardholder and the bank. The step by step credit card transaction was very helpful. This was another great read! I am looking forward to reading your next blog!
ReplyDeleteWoah, another reason why I should stay away from shopping online! This was very interesting to read, I loved how informative it was about the frauds and how we know about the phone and online fraud tactics but fail to avoid them when it actually happens. I hope that they'll be able to track down the master minds behind this and perhaps find a way to block out the online and telephone offers. Maybe a company will invent some sort of program that can filter out the bad websites out there, haha.
ReplyDeleteA efficient method to pay someone without actually having to give out cash is to use a credit card. But it is only efficient only if you know how to take care of it. As you have said that many people have fell into these scams that criminals have placed, it only shows that they did not take care of their credit card information properly. I found your written summary well written and interesting and people have to learn that "If it's too good to be true than it probably is". Reading your summary has also made me careful upon using credit cards.
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