Economic chaos created by credit card holds related to fraud

 Credit cards are a convenience but using them is sometimes a problem when a hold is put on them to prevent fraud.[/caption]

They had just returned from a nearby city when they learned that a credit card transaction had been declined.  After making inquiries, it was learned that the company had put the card on hold because the amount being charged was an "unusual amount" which required it be flagged for potential fraud.  The hold had prevented an urgent bill from being paid, holding up a major shipment of personal goods.  It is another way the fraudsters have created problems for the general public.

According to a businessman associated with a major moving company, this type of action occurs frequently, about one-third of the time when dealing with a customer.  A credit card is declined because the amount is too large or unusual, out of the ordinary for a particular customer.  This means it is likely other companies and private citizens experience the same issue, while the use of a credit card becomes increasingly difficult during special times or emergencies.

Credit card organizations, including banks and credit unions, have learned that unusual amounts of money might mean credit card theft.  If Joe Smith ordinarily uses his card to buy gasoline, take his family out to dinner and buy the occasional bouquet of flowers for his wife on a special occasion, a thousand dollar charge might trigger suspicion that his card has been stolen.  So if Joe were to be stranded in a city far away from his home and had an emergency, needing to use his credit card might be difficult because of the geographical differences as well as any significant amount different from his usual spending habits.

Hotels typically put a hold on a credit card of an amount that is anticipated for a room charge.  This only impacts individuals nearing their credit limit, however.  With debit cards, the problems can be multiple.  For example, if the card is stolen, then it is possible for the thief to liquidate much of an account before being caught.  Furthermore, if the amount of the hold is close to the balance in a checking account used for the debit card, that might disallow additional transactions following the original charge.

As fraud and identity theft continue to expand, and large organizations find themselves as victims of hackers, more and more people are experiencing problems using credit cards.  The protection is often to put a hold on the card for those unusual amounts, and whereas it is an inconvenience, it is a protection as well.   It is when the customer is not advised and finds a credit card purchase denied that the need for emergency use can override the feelings about protection.  Finding that balance continues to be a problem for both the bank and its customers until some way is found that allows flexible use of credit while at the same time the safeguards that keep people from being victims.

Scamming the public: beware of door to door peddlers and their promises

Those who put up solar energy panels also try to scam buyers

The fellow comes to your door promising he will landscape your yard, pave your driveway or install a new roof.  Many people, especially seniors, often take this opportunity for granted, especially when a bargain is offered.  And older people are often used to those old ways of doing things, when your neighbor had a skill and offered it for a reasonable price and was someone you could rely on to do a good job.  These days, however, government agencies warn people to beware of those who go door to door, for indeed these may be scamming and not all interested in keeping their promises

An example is provided on the Washington Attorney General website about a man who offered to do asphalt paving and failed to do the work.  The man, Michael Eugene Sparrow, 50, was charged with eight counts of unregistered contracting.  He had offered that "really good deal" that turned out to be a bad deal for the unsuspecting customers.

The case came about when an investigation conducted by the Department of Labor and Industries found more than eight homeowners, mostly seniors on fixed incomes, had hired Sparrow to grade or pave their driveways.   And although he had promised a bargain, Sparrow ended up charging the homeowners a good deal more than the usual price.  Furthermore his original price was inflated after finishing the job.  On one occasion he had given the property owner a quote of $750, then demanded an extra $2300 when the job was completed.

Seniors often fall prey to such scamming activities.  There are many stories about elders being bilked out of money by handymen who promise to make repairs, then end up failing to do the job or charging more than the original estimate.  In fact lawyers tell us that more than one third of the fraudsters target the elderly.

Experts remind everyone to check credentials of anyone offering to do a job, not just the business card that is presented or the say-so of the person making the offer.  Then if there is a senior relative or friend who might be vulnerable, remind these people of the risks of thinking everyone is honest and will follow up with legitimate work.

Beware the holiday scams

[caption id="attachment_13469" align="alignleft" width="260" caption="Phishing initiative - wikimedia commons"][/caption]

Here’s the letter bound to get your attention:  Dear  Taxpayer!You are encouraged to pay a penalty for the failure to file income tax returns prior to January 31, 2012.Note, IRC [Section 6038(b)(1)] provides for a monetary penalty of $10,000 for each [Form 5471]that is filed after the due date of the income tax return or does not include the complete and accurate information described in [Section 6038(a)].

That’s the kind of letter that would get anyone concerned,  especially if he or she is a late tax filer.  It is the kind of letter one opens, frets about and then it happens.  The computer freezes, crashes, or it simply scoops up the information linked to passwords and personal data, all upended and sent along from some unsuspecting victim to an Internet bandit in cyberspace.

The new scams are clever.  It is likely many people would notice very soon they are false and meant to mislead.  After you open the mail, the malware strikes.  If you are lucky, you have a program that will erase the bug.  But most often you won’t know until it is too late, and everything is gone.

This year the email system is loaded with these goodies that are sandwiched into mail from friends and that slip by spam gates to get at you anyway.

It’s important to read carefully anything that comes unexpectedly, asking for personal information and promising a reward if you give it up and a punishment if you don’t.  The IRS note would send chills down the spines of most folks, so it’s tempting to respond.  And then there are those banking emails, but the “obvious” is early, as my bank, and yours, likely don’t call you “dear.”

 Hello Dear!  We have received too many reports from our customers about fraudulent online and ATM transactions.  We have launched a new security system to secure old and new accounts from this kind of fraud.  To prevent your checking or savings account from this fraud, update your information on the attached file which you should download and open.  Thank you.  Bank of America Security.     

 Experts tell us that phishing is on the rise, particularly during the holiday season when folks order goods online and so have online orders and confirmations as well as emails that look authentic at the outset and relate to credit cards, banking and other alleged financial offerings.  Phishing is a technique used online where the scammers ask for personal information and introduce their request through fake messages that resemble a valid message from banks or shopping sites.  The recommendation is beware of these.  Consumers are warned not to open messages that arrive from these sources.  And be particularly cautious during the days when attention may be diverted to family business and legitimate shopping, as the criminals are aware that these are times when they can attract unsuspecting folk.  Don’t be a victim and stay particularly guarded, experts say, to avoid falling for these scams.