LowCards.com Weekly Credit Card Update–June 6, 2016
The First 48 Hours: How to Respond to a Data Breach
Given the period of chaos that follows immediately after a breach, and the long-term ramifications, responding to an event without a plan is like treating an amputated limb with plasters – messy and ineffective. The first few hours after a breach are critical in asserting control of the situation and, as such, businesses must have a comprehensive incident response plan in place that enables them to react immediately should the worst happen. Before drafting a plan, companies must first thoroughly understand the different types of personal and regulated data they collect, how it’s protected, where it’s stored and who has access, as this will influence the response required. The action guide can then be created, which must include detailed descriptions of the roles and responsibilities of specific individuals and departments, and timelines. Story by Nigel Hawthorn for Info Security.
Why You Shouldn’t Use a Business Debit Card
Ditch your business debit card and use a credit card instead. That’s not legal advice; it’s just common sense, and here is why. When it comes to liability for fraudulent card purchases, there are two federal laws you need to be aware of. One is the Electronic Funds Act, spelled out in Regulation E (or “Reg E”), while the other is the Truth in Lending Act, or “Reg Z.” Reg E covers debit cards used by consumers for consumer purchases. It does not cover business debit cards. Under Reg E, if your consumer debit card (not your business debit card) is used fraudulently, your responsibility for fraudulent purchases starts at $50 but can go higher. Regulation Z covers credit card purchases. It also applies primarily to consumer transactions. In fact, it specifically says that it does not apply to “extensions of credit primarily for business, commercial or agricultural purposes.” But in a footnote, the Board of Governors of the Federal Reserve notes that even these business transactions remain subject to the parts of the regulation that deal with “the issuance of credit cards and liability for their unauthorized use.” In other words, unauthorized use of business credit cards is generally covered by Reg Z, which caps the maximum liability for fraudulent purchases at $50. Story by Caton Hanson for Nav.
Bank of America Revives Sale of Credit Card Issuer MBNA
Bank of America has relaunched the sale of one of the U.K.’s biggest credit-card companies MBNA, according to people familiar with the matter. The card business, which has about five million customers and a loan book of around £7 billion ($10.2 billion), is being shopped to a number of potential buyers including Lloyds Banking Group PLC, according to people familiar with the matter. Bank of America decided to sell the U.K. MBNA cards business in 2011 as it ditched several international credit card businesses to bolster its balance sheet. But the sale of the U.K. business was axed a year later. Story by Max Colchester for The Wall Street Journal.
Forget about Debit Cards–Here Come Debit Rings
Visa said that it will give out rings that work like prepaid debit cards to the 45 Olympic athletes it’s sponsoring. The technology is being tested by the athletes in the hopes that it can be deployed to the general public at a later date. The new ring comes in white or black ceramic, doesn’t require a battery or charging and can be submerged in water to up to 50 meters (164 feet). The ring has a secure microchip and works when the wearer hovers it over the sensor on a card reader. The rings worn by the athletes will have prepaid money on them but they can be reloaded. Story by Ahiza Garcia for CNN Money.
Bank of America Increases Earnings of Cash Rewards Credit Cards
Looking to make the most out of your credit card rewards this summer–and beyond? Bank of America has updated three of its cash rewards credit cards to allow cardholders to earn cash back on the first $2,500 in combined grocery, wholesale club and gas purchases each quarter. This quarterly cap is up from $1,500, which is a gigantic increase in potential rewards! In addition, Bank of America now allows cardholders to earn 2% cash back at wholesale clubs (including Costco and Sam’s Club), making any of the cards detailed below must-haves for people who do their shopping at those stores regularly. The categories don’t rotate, so you always know what purchases will earn you cash back, and they never expire. The rewards break down to 3% cash back on gas, 2% at grocery stores and wholesale clubs up to $2,500 in combined gas/grocery/wholesale club purchases each quarter and 1% on all other purchases. Story by Jocelyn Baird for NextAdvisor.
Credit Card Scammers Targeting Retailers, Self-Checkout Lines
Last month, thieves at Walmart stores in Virginia and Kentucky used skimmers–devices placed over credit card readers–to gather information and pin numbers and make duplicate cards. A skimmer works by recording the digital information from a swiped card, and a micro-camera captures the pin number. Those are sent to the thief via Bluetooth or removed later. In a security video, one man shields his partner, who pulls the skimmer out of his jacket and pops it in place. The whole operation takes two seconds. They made off with as much as $20,000 from at least 38 victims. The Secret Service says you can protect yourself by always covering the key pad with your other hand when you enter the pin, and check your accounts daily for any suspicious charges. Story by Don Dahler for CBS News.
Can You Guess Which Americans Have the Highest Levels of Credit Card Debt?
45- to 54-year-olds have the highest level of credit card debt among all age groups, with the average borrower in that range owing over $9,000. In fact, 45- to 54-year-olds carry, on average, over $3,000 more than millennials in credit card debt, which is a lot, considering how much more they tend to earn than their younger counterparts. Then again, higher earnings could be the reason why so many 45- to 54-year-olds are racking up larger amounts of debt. Those who make more often tend to spend more freely, thinking they can pay off their balances in less time. The problem arises when that doesn’t happen, and instead, those same people carry credit card balances for years. And the longer it takes to pay off a balance, the more money there is to be lost to interest charges. Story in The Motley Fool.
Biometrics Can Turn Breach Fears into Action
More than 700 million consumer records were exposed to fraudsters in 2015 alone, according to the Gemalto Data Breach Level Index. While credit card details may have been the most wanted information in past years, 2015 was the year when data from leading healthcare companies, government agencies and similar firms became the hottest commodity on the Dark Web. Data stolen in these breaches is typically used in fraudulent attacks on banking and e-commerce organizations. A 2015 study by Javelin Strategy & Research on the impact of data breaches on consumers found that account takeover and new account fraud will increase by 60 percent in the next three years. That makes for an estimated $5 billion lost last year to $8 billion in 2018. Financial institutions and merchants must implement solutions that identify and prevent fraud attempts, while also protecting the customer experience. The way to do this is by combining data obtained from device and observable behavioral biometrics from the time of login or account creation and throughout the user’s account lifespan. Story by Ryan Wilk for Payments Source.
Apple, Android, Samsung: Who is Winning the Mobile Pay App Race?
A recent study from market research group Phoenix Marketing International has found that although more people have reported using Apple Pay, Android Pay and Samsung Pay have adoption rates on par with where Apple Pay was several months into its launch. This suggests the two competing mobile payment technologies aren’t far behind Apple in capturing market share. Story by Megan Geuss for Ars Technica.
MasterCard Launches New Software For On-Line Fraud Prevention
MasterCard has an e-commerce anti-fraud tool for small and medium sized (SMEs) businesses. Called Simplify Controls, it lets SMEs control, prevent and monitor e-commerce transactions in real time. MasterCard’s survey of SMEs found that merchants are seeing significant gains from ecommerce. It found that the 89 percent who sell online are seeing sales increase by an average of 40 percent. That makes ecommerce attractive for merchants, and for fraudsters. It’s continuing to grow, she added. Javelin Research has predicted that card not present (CNP) transaction–mobile, online and through call centers–will grow to the point when CNP transactions are four times the number of point of sale (POS) purchases. Story by Tom Groenfeldt for Forbes.
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 14.72 percent, identical to last week. Six months ago, the average was 14.63 percent. One year ago, the average was 14.52 percent.