New Credit Card Scam

[Jul 31, 2007.]

 

Internet experts say that credit card thieves are employing a new tactic: making donations to charity using pilfered charge cards. The strategy may enable thieves to steal more money than was possible in the past.

The virus protection company Symantec reports that making a small charitable donation is used to test the card in order to determine if it's been reported as missing. Those kinds of donations do not trigger action by fraud detection software, so such contributions are considered to be a "safe" way for thieves to begin charging.

It's been said that bank behavior monitors are not accustomed to noticing charitable donations, giving impetus to the fraudulent donation trend. Typically, credit card users don't use their cards to donate to charity everyday, so such a charge may go unnoticed. Thieves may also feel better about themselves, knowing that part of their ill-gotten gains are being spent on a worthy organization.

Incredibly enough, one of the nation's best-known charities, the Red Cross, recorded 700 fraudulent contributions just in the month of June. The figure indicates that such "charity work" by thieves may be more common than was once thought.

This unfortunate trend brings up an important point—consumers must be ever-vigilant in protecting their credit. Financial experts say credit card customers need to carefully analyze their monthly statements to determine if there are any unauthorized charges on them. In this era of widespread identity theft and computer hacking, keeping a close eye on credit card accounts has become more important than ever. With careful monitoring, though, consumers should be able to detect even the smallest unauthorized charitable contribution.

As a result of this situation, some stock analysts are recommending that investors put their dollars in security and fraud detection companies. That's because, with so much thievery going on, fraud detection might be considered a growth industry.

Julie Ann Amos
July 31st 2007
Recent News

• Credit Card Companies Offer New Insight Into Consumer Spending
  The credit industry has uncovered some surprising news about consumer spending. Apparently, young people are going to become bigger spenders than their Baby Boomer parents. [July 25th 2007]


• Reasons for Bankruptcy are Varied
  A new study indicates there are a myriad of reasons behind consumer bankruptcies. The report shows that the vast majority of respondents, 63%, said they were overextended on credit. [July 25th 2007]


• Fed to Protect Homeowners from Mortgage Abuse
  The chairman of the Federal Reserve Board is determined to ensure that prospective homebuyers are shielded from lending practices that could be considered abusive—a move that some legislators say is long overdue. [July 25th 2007]


• New Hope on the Credit Card Front
  While the housing market appears to be sluggish and the overall economy may appear to be a mixed blessing, the outlook appears to be bright for credit card companies and their cardholders. [July 19th 2007]


• Low Interest Rates May Not Affect Stocks the Way We Thought
  While there are plenty of reasons for those in the financial community to support low interest rates, now comes word that such rates may not have the effect on stocks that investors have come to believe. [July 19th 2007]


• College Graduations Bring Decisions About Student Loans
  A number of college graduates are venturing into the job market this summer, hoping to earn enough money to start paying back their student loans. [July 17th 2007]


• Experts Recommend Comparison Loan Shopping This Season
  This summer, financial experts are recommending that consumers shop around when it comes to student loan consolidation. [July 17th 2007]