LowCards.com Weekly Credit Card Update–February 28, 2014
Financial, Retail Industries Keep Cybersecurity Mistakes and Punishments Secret
Even as cyberthreats grow in frequency and sophistication, the system for ensuring payment card security in the United States remains a closely guarded arrangement among the credit card networks who set it up, the banks who process payments for merchants and the merchants themselves. No regulator ensures that companies meet minimum requirements for protecting data. No public database tells consumers which companies lost customer information through poor performance or neglect, or when and how much they were fined. Banks and credit card companies determine fault on a case-by-case basis through private contracts with individual merchants. Fines and the reasons for them remain sealed. Story by Jennifer Bjorhus and Jim Spencer for the Star Tribune.
Credit Issuers Making it Easier to Know Your Score
It is fairly simple to get a free copy of your annual credit report. But you usually must pay to see your credit score – the three-digit number that summarizes your credit report for lenders, to help them decide if you’re likely to repay a loan. Now several credit-card issuers are providing certain types of free FICO credit scores to card holders, both as an enticement to get you to open an account and as a way to educate you about what goes into your credit score, which affects your ability to borrow and the interest rate you pay. Darlene Goins, senior director of scores at FICO, said the company began allowing firms that purchase scores to make them available free to consumers through an “open access” program, as part of an effort to “take the mystery out of credit scores,” she said. “We felt like there was a need in the marketplace, and this was the right thing to do to help educate consumers,” she added. Story by Ann Carrns for the New York Times.
Identity Theft Triggers a Surge in Tax Fraud
With tax season under way, federal authorities are stepping up efforts to stop what they call a growing problem of fraudulent filings seeking tax refunds based on stolen identities. The scam, which involves repeatedly filing fake tax returns electronically and receiving refunds within days, is so enticing it is attracting suspects not typically associated with white-collar crime. Two members of an alleged crack-dealing gang in Miami were indicted on charges they also ran a tax-refund scam on the side. Suspects typically steal lists of names and Social Security numbers. Then they file large numbers of electronic returns claiming refunds, and can start getting money before investigators spot the fraud. Story by Devlin Barrett and John D. McKinnon for The Wall Street Journal.
Neiman Marcus Hack Not as Widespread as Once Feared
When news first broke about the Neiman Marcus credit card hack, the company estimated that as many as 1.1 million cardholders could have been affected. New information suggests that the hack may have only affected a maximum of 350,000 customers. The breach occurred when malicious software was installed onto the Neiman Marcus system that collected payment card data from customers who made purchases from July 16, 2013 to October 30, 2013. The company is now saying the malware was not operating at all stores each day during that time period. A letter from the CEO says that approximately 9,200 of those cards were subsequently used fraudulently, according to data from Visa, MasterCard and Discover. Story by Bill Hardekopf for LowCards.com.
EU Accepts Visa Europe’s Offer to Cap Its Inter-Bank Fees
European Union regulators accepted an offer from Visa Europe to cap its interbank fees to the same level as MasterCard’s to settle an antitrust probe. Europe’s largest card payments company will cut the fees it charges retailers to 0.3% of the value of each transaction, a reduction of between 40% and 60%, the European Commission said. Rival MasterCard Inc. agreed to cap fees at that same level in 2009. Visa Europe made the offer last year to cut the so-called Multilateral Interchange Fees, which are paid by retailers’ banks to cardholders’ banks and are fixed jointly by the retailers’ banks. Story by Vanessa Mock for The Wall Street Journal.
JP Morgan to Cut 8,000 Jobs
The financial world took a jolt when the nation’s biggest bank, JPMorgan Chase, announced plans to eliminate roughly 8,000 jobs in consumer and community banking as demand for refinancings drop. JPMorgan said it would also add about 3,000 jobs across the company this year in areas such as compliance. Overall, the bank’s headcount is expected to fall by 5,000 in 2014 to about 260,000, including employees and contractors. Story by Bruce Horovitz for USA Today.
Mortgage Servicer Abuses Still Plague Homeowners
Despite the billions of dollars in fines levied against mortgage lenders and servicers, the mortgage industry continues to mislead and mistreat homeowners, according to the federal government. A report released by the Consumer Financial Protection Bureau earlier this month found that just under half of the 187,818 complaints filed with the agency concerned mortgage problems, with the overwhelming majority of these involving servicing, loan modifications and foreclosure activities by mortgage servicers. The CFPB is getting complaints about careless paperwork, incorrect fees and illegal evictions. These are the issues that forced the banks to come to a $26 billion settlement with the government two years ago. Now there’s a new source of these abuses: mortgage servicers, the companies whose main business is collecting mortgage payments. Story by Constantine Von Hoffman for CBS MoneyWatch.
Keep Credit Cards in the Loop and Pay with Fob or Phone
Mobile payments are supposed to be the future. You pay for stuff swiping or tapping your phone, or in Loop’s case with a fob that works in tandem with the Loop Wallet app on your iPhone. You can store all your credit cards, loyalty and debit cards, gift cards, and other forms of ID on your handset with Loop. You can also store your credit card issuer’s phone number, security codes, pictures of the front and back of the cards, and even a digital replica of your signature. By storing it all on the phone, you can shrink your George Costanza-thick physical wallet down in the process. Of course, it will be a very long time, if ever, before your physical wallet completely goes away. Story by Edward Baig for USA Today.
LowCards.com Weekly Credit Card Rate Report
Based on the 1,000+ cards in the LowCards.com Complete Credit Card Index, the average advertised APR for credit cards is 14.50 percent, slightly higher than last week’s 14.48 percent. Six months ago, the average was 14.38 percent. One year ago, the average was 14.35 percent.