Credit card security and Risk

By William RaymondCISA 3358 Teacher Dr Hewitt

• Credit card itself• History• Identify theft• How to protect yourself• World Statistic on the CC use and theft

What is a Credit Card?

• It’s a small piece of plastic that is 3-1/8 inches by 2-1/8 inches in size that contains identification information such as a signature or picture.

• It gives one the power to buy goods and services for which is obligated to repay back at a later time.

• It’s convenience for the customer and allows the person not to carry cash with them.

• Allows the issuer (the bank ) the right to limit your line of credit. That is based on your liability to them. Ex Young college kid that that just moved out of Moms’ house, maybe limited to $500 line of credit. The reason for this is you are the liability for the bank

• However Banks can make up for it by interest. If you’re a good Samaritan and pay your bill in full by usually in a grace period of 30 days you will not be subjected to interest fees.

Why so many #’s on that card?

• MasterCard - Digits two and three, two through four, two through five or two through six are the bank number (depending on whether digit two is a 1, 2, 3 or other). The digits after the bank number up through digit 15 are the account number, and digit 16 is a check digit.

• The first digit in your credit-card number signifies the system

• 3 - travel/entertainment cards (such as American Express and Diners Club)

• 4 - Visa • 5 - MasterCard • 6 - Discover Card

Credit Card history

• In the early 1900s you had service stations and department stores issues these cards out to customers.

• The cards though were only accepted at the issuing place. So If you got one at the Chevron in Fresno it could only be used at the Fresno location.

• So the card was very limited.

• The system of payment and loaning was based on honor

system.

• Then in 50 years later the Dinner Club card was introduced. This became what is known as the first universal credit card. One that could be used at a variety of stores and business.

• It started out as a card mainly for business associated that could dine in with their clients. It had 200 associates.

• This however was a charge card, because the full amount had to be repaid back within the month.

• By 1951 It grew to over 20,000 members.

• Then you had the Banks take over the credit cards. Bank of America issued (VISA) to all consumers' alike.

Credit Card + and -• However when the banks later in the 60’s

and beyond got a real hold of this gold mine idea, the credit card became a way for banks to rule the customer with compounding interest.

• Credit cards have positive and negatives to them.

• Merchant it guarantees payment once the transaction is made. The banks promise to pay quickly. However they are usually charged about 5-50 cents per transaction.

• Customer allows them to buy goods and services without the need for hard currency.

• Banks well they usually get all the benefits that combine the merchants and customer.

• Button line Be careful and make the card a true asset not a liability!

• Credit cards have many external risk attached to them

• Forgery operation centers. That make fakes credit cards.

• Masquerading your identity. Account takeover happens when a criminal tries to take over another person's account, first by gathering information about the intended victim, then contacting their card issuer masquerading as the genuine cardholder, and asking for mail to be redirected to a new address needs is your SS# and your name.

• Skimming devices- these are strips of tape devices that can read the magnetic strip of the cards information. Used at ATM machines, restaurants and bars.

• And Tons more

How to Protect yourself• Information from http://www.scambusters.org/

CreditCardFraud.html

• * Never provide your credit card information on a website that is not a secure site.

• Never leave your credit cards or receipts lying around.

• Always void and destroy incorrect receipts.

• Keep an eye on your credit card every time you use it, and make sure you get it back as quickly as possible. Try not to let your credit card out of your sight whenever possible

• Shield your card form others when your about to pay for your goods. Cell phones these day have great lil cameras to them.

• Information from http://www.privacyrights.org/ar/idtheftsurveys.htm

• Cancel your paper bills and statements wherever possible and instead check your statements and pay bills online. Monitor your account balances and activity electronically (at least once per week).

• If you do not have access to online accounts, review paper bank and credit card statements monthly and monitor your billing cycles for missing bills or statements.

• Use email based account “alerts” to monitor transfers, payments, low balances and withdrawals and review your credit report (now available for free annual review).

World Stats on CC crimes 08

World Stats on CC crimes 2

• Globally, in 2008, most scammers operated from the United States. The U.S. still held a huge lead in active internet users then, a gap that has since closed considerably

EU Stats on CC crimes

• Credit card fraud in the European Union increased by 50% last year from 2000

• BBC report in 2001 on http://news.bbc.co.uk/2/hi/business/1179590.stm

• the European Commission says it is determined to stop the fraud, which accounted for 600 million euros ($553m) in illegal transactions in Europe last year.

• Recent data has shown that internet transactions represent only 2% of all credit card usage, but account for half of customer complaints.

Why the difference EU VS US?• Found at http://www.cashunclaimed.com/unclaimed-property-blog/the-

government-finance/identity-theft-in-europe-is-different-than-in-us

• 1 Europeans use national identity cards as a form of identification and these are fiercely guarded . The national ID number appears very little compared to SSN in The US.

• As Oppose here we use the SSN for too many applications.• 2 European countries, credit bureaus are maintained by groups of banks that

share information with each other and not with outsiders. Contrast that with the U.S., where just about any business can acquire data from a credit bureau and use credit scoring to determine a potential consumer’s risk of default.

• 3 Western European countries have laws that keep businesses from sharing and selling private financial or personal information. Information is only available to the person to whom it pertains. The European Union privacy directives restrict data aggregation of public records.

That concludes CC information

• THANKS PEOPLE!!!!!!!