Credit Card Security: How to protect yourself from credit card fraud

The WorldWide Web is a game changer when it comes to using your credit card for online shopping That unfortunately means that it is also a rich new resource and playground for cyber criminals.
Due to lack of security, one in 10 of Australia's internet users are now losing money to online identify fraud over the past year with losses totalling $1,286,000,000, reports VeriSign, a major player in the SSL Certificate industry.
That's an average of $1,000 per fraud victim of the 1,300,000 people affected, with more being lost in the 18-24 year old profile.
This is a 30% jump on the amount of money lost online in 2007.

Eight things that you can do to protect your personal and credit ID online.


1. Don't use your credit card to make purchases online. Use a Debit card instead. This will limit your losses to what money is left on the card. If you only transfer funds to it as required, then any losses will be tiny.
2. Keep your firewall, virus and phishing scanner software up to date and run them when online.

You could consider changing to an Apple computer. They are much more secure and less prone to virus and Trojan attack, but not immune. Try the iMac, the Mac book or the Power Book when you next update. There are a lot of other benefits also. You may want to keep the iMac for the Internet only, and the PC for desktop only duties. For business use Microsoft applications are easy to use. As PCs are so cheap these days, maybe you should use one for desktop work only and use your Mac for online work.
3. Use an encrypted keyboard. This ensures that keyboard readers are foiled.

You could also use a bank that uses a scrambler for your pin numbers. The scrambler randomly changes each pin number to a letter, each time you login. So your pin is scrambled each time you enter it. And will be different the next time you log in. This foils keyboard readers.

4. Ensure that you are putting your personal info into an encrypted form with a secure certificate. You can tell this by the address line in the browser starts with https: instead of http:
This is essential as even a trusted site can have your details stolen is it does not secure your information.

4.Even if you use a PC, don't use Internet Explorer for web surfing or purchasing. Install a more secure browser. Try Google Chrome, FireFox, Safari or Opera instead.
Apple's Safari for instance gives a warning when the security certificate is not known. Heed this warning and ensure you trust the site before proceeding.
This warning is when the browser detects a generic security certificate, not necessarily a bad site to transact with. For instance I have noticed that Melbourne IT, Australia's peak Internet names registrar uses a generic certificate, and I obviously trust Melbourne IT so I proceed with the transaction.
If the SSL certificate is issued by Verisign, Geo Trust or Thawte these are recognised as authentic and verified by the issuer, and show as such. These site also come with a guarantee.

5. Use a third party payment method for buying from unknown sites. Small companies understand they don't have the trust factor that major online brands command, and some cannot afford the security vigilance required online today, so most will opt for a third party payment solution as a way to ensure they don't lose business opportunities because of this lack of trust.
Third party payment options include PayPal, Digital River, e-Junkie, and 2Checkout. This means that your details will not be going to the merchant, but the trusted intermediary who are better placed to protect your information. I have used all of these to pay for goods online. Paypal is the best known, some merchants offer two so you can choose one, and I have used e-Junkie and 2Checkout where a choice is offered. Again, when you go to the transaction area, make sure that you are on the right site by checking the URL address in the browser window, and that it is in fact a form protected by an SSL certificate.

6. Always check your credit card/ debit card statements and determine that all transactions on there were authorised by you, and notify immediately your credit card issuer if there's something on there that you don't recognise. Also take your time. There may be transactions that you have forgotten about.

7. Try to resolve any errors with the merchant before contacting your bank. Your bank will give you more credence if you do, and relate the conversation to them.
Even honest companies make mistakes, and I have had Amazon make a couple of double orders when I did not want this to happen.

Another time I pulled out of my order without confirming the transaction, and somehow it went through. These were quickly resolved by Amazon for me.
8. Beware the free offer. Do not go for any free sample offers that come up. These can be bate traps for getting your credit card info.
 I did once. It went from a free offer, to a $1.95 postage [to get the credit card details], to $11.95 when it was transacted. I rang to cancel immediately and was told I could not. If I allowed the transaction to continue you were then slugged $68.00 for a second months supply. I rang my bank, who cancelled the transaction, and issued me with a new card. In 11 years of buying online it was the first time I was scammed. And this is typical of scams. They take a few dollars at a time.

By following this advice you should be able to use your credit cards [or preferably your debit card] online and not become another victim of Identity fraud.
Author: Rick Adlam of Mr Mortgage

Mortgage home loans interest rates head north

Home mortgage rates could soon be 8%pa if the RBA believes the economy is stable and banks don't get sorted by legislation and greater competition.
With Australia missing the Global Financial Crisis boat and the economy powering ahead first home buyers and home owners could soon face mortgage home loan rates around the 8%.
This scenario will depend on a number of factors including:

• Mortgage home loan competition. Unless we see a vigorous embracing of securitised mortgage  lenders by both mortgage brokers and home buyers and homeowners, the banks with creep up their margins on the official cash rate. Major banks margins are nearly 3%, and that is over 1% on what is was three years ago at the height of a competitive non bank lending industry. 
• Legislation. Senator Bob Brown, leader of the Greens Party has introduced a bill that looks to cut mortgage interest rates and fees and charges on all lending other credit products to fair levels. Will the banks will be lobbying hard to stop this as this will white ant their mortgage home loan record profits.
• The RBA decisions over the next twelve months. The Reserve bank of Australia is the body that will steer Australia into a low inflation, low unemployment economic future. Balancing home loan affordability with consumer spending and business demand is a hard task, given that one of Australia's biggest challenges is the housing shortage that is driving home prices, and the size of the average home loan ever higher. 
• Government housing policy. Basically we don't have the policies to drive the home building industry to address our current housing shortage. The fundamental problem is that developed land is too expensive and in too short supply and takes too long to be approved by State and Local Governments. A Government policy at State or Federal levels to acquire and develop land for residential land has to be a priority. This will take the heat out of established home prices and make homes more affordable.
• Marketing tactics by developers. Even when land was plentiful, land developers used unfair tactics in my view with the aim to push prices higher by "creating artificial scarcity". This practice needs to be stopped, and more competition in the land development brought about.

By addressing these issues, housing will be less expensive, even if mortgage home loan interest rates go higher.

And by addressing the root cause of house prices going higher, by building more housing stock sooner, one of the main reasons for RBA interest rate rises, home price increases, will be removed, according to Rick Adlam, Mr Mortgage home loans. 

Green your credit card at your local ATMs and shave your debts

With new credit cards ATM transaction charge changes proposed by Greens Senator Bob Brown, you could soon save hundreds on all those "foreign" Bank ATM fees.
And the only one's who'll complain about it our those who profit from this rort.
The real cost of credit card fees and charges
It is estimated that this alone will save Australia's bank customers  $600 million a year in direct fees.
When you add all the interest that is then extracted from bank customers, and then honour fees because this may put accounts over their limit, we are looking at over a billion dollars saved under legislation to be introduced in Federal Parliament next week banning $2 ATM fees.
Total fees and charges reductions targeted in the introduced legislation by Greens Senator Bob Brown can be as high as $5 billion a year charged in bank fees and charges.
Bob Brown claims this will put an end to profiteering by banks on mortgage fees.
The Greens' new Bill called the "Banking that serves the Community" Bill allows basic fee-free accounts, fair price mortgages and up-front disclosure of exit fees on mortgages.
Bob says that he feels that the proposed laws will put the power back in the hands of bank credit card customers and be a welcome force in keeping banks honest.

The most recent data from the Reserve Bank shows that there were more than 25 million cash withdrawals at foreign ATMs in February, representing $50 million in added credit card fees.
The proposed Bill also requires banks to show that any exit fees from mortgages reflect a reasonable cost and do not just act to chain customers to lenders.
Mr Mortgage home loans supports these changes.

Mortgage Broker top performer now faces jail over massive home loan fraud

A few short months ago a New Zealand mortgage broker was hailed as her company's top performer in a low mortgage location, now the 43 year old mother faces 10 years behind bars after being convicted of fraud. 
The mortgage broker pleaded guilty in a Wellington District Court to using scissors and a photocopying machine to create false documents to write more than NZ$15 million in phoney mortgages.
Some unsuspecting clients have lost their homes and others are struggling to continue to make their mortgage payments.
The woman's branch office starred as the best performing in the company, supported by the fake mortgages, between September 2006 and July 2008 - and it was this that lead to her undoing.
Never meet your heroes
The parent company began an audit into her loan applications because her branch's outstanding performance was at odds with its geographical location.
Most of the loans obtained through the woman's actions are being repaid.
She has been remanded on bail until 27 January for sentencing.

Beating credit card bankruptcy in Australia

Increasing numbers of people are finding it difficult to manage their finances, including their credit card debt.
Part 9 of Bankruptcy Act introduced in 1997 aimed at keeping people out of bankruptcy.
Debtors arrange to partly repay creditors over time debt agreements are one stop short of declaring total bankruptcy for the increasing number of people who can't pay their credit card debts, personal loans and bills.
A debt agreement under Part 9 of the Bankruptcy Act, allows debtors to strike a deal with their creditors to repay less than the full amount at an agreed weekly rate over a period of time – without any additional interest. It is an option for people with unsecured debts of less than $77,021 and after-tax income below $57,765.
Now big creditors seem to be getting tough and, according to debt agreement administrators, some are insisting on unrealistic returns from insolvent people.
Part 9 agreements were introduced in 1997 following widespread public concern about young people in particular having to file for bankruptcy over consumer debts such as small credit card debts or even mobile phone bills.
Since then an industry of debt agreement administrators has grown up, often relying on heavy marketing and with trading names such as Debt Assist, Debt Relief and Debt Busters.
They specialise in organising agreements and approaching creditors who vote on each proposal. Fox Symes is a market leader in the industry, filing about 300 agreements a month.
"Some of the big lenders have totally unrealistic expectations," says Deborah Southon, director of Fox Symes.
"People are coming through now with up to $78,000 in consumer debts," Ms Southon says. "You can't pay that back in less than five years and probably not at much more than 40¢-50¢ in the dollar."
Recent amendments to the Bankruptcy Act enshrine the principle that an insolvent person's debt agreement proposal must be affordable and therefore sustainable.
Debt agreement administrators say Westpac and St George Bank are among big lenders voting down debt agreements based on the debtor's ability to repay.
The administrators report a noticeably harsher approach from Westpac and St George compared with a generally supportive approach of the Commonwealth Bank and National Australia Bank in particular.
Some say that St George is telling them no less than 65¢ is acceptable, while Westpac is said to be voting down agreements that return less than 70¢ in the dollar, regardless of the circumstances of the debtor.
Penny Doube, a debt agreement administrator based at Tarragindi in Brisbane, says that on average her agreements involve an insolvent debtor repaying about 50¢ in the dollar over three years.
Ms Doube says St George has informed her that its minimum acceptable return is 65¢.
"St George have always been difficult to deal with," Ms Doube says. "They are not fond of Part 9s."
Administrators typically negotiate agreements that return between 40¢ and 80¢ in the dollar over three to five years. For that, they charge an upfront fee that usually ranges between $600 and $1500 and an ongoing commission.
Ms Southon says each agreement has to ensure that the rent or mortgage is paid, plus provide for utilities, food, essentials, children and the occasional medical visit.
Under the new voting rules, big creditors have increased power and cannot be easily outvoted.
"If St George is your majority creditor, then it is 'shut the gate and file now for bankruptcy', because they are not going to agree to anything," says one debt agreement administrator.
Melbourne debt agreement administrator Melissa Treherne says she is being sandwiched by tough creditors and the new rules, which require her to certify a debtor can afford repayments.
"The new rules are good, they have really cleaned things up but some of the creditors are just not looking at the budget of these people," says Ms Treherne.
"They say they have a new rule, nothing under 55¢ for example, and they won't be flexible about time or rate of return."
A Westpac spokesman says 70¢ "is one of its highest repayment guidelines" and it does apply lower proportions on a case-by-case basis.
A spokeswoman for St George Bank says the bank assesses each proposal individually.
"Most importantly, customers' specific circumstances are taken into consideration, and the final decision is not solely based on the return to the bank."
Digby Ross, the Queensland insolvency registrar, says the system requires goodwill by all parties in the industry if it is to succeed, including the big creditors.
"The major creditors have generally been very supportive, right through (the reform process)," said Mr Ross.
"Yes, definitely, it needs goodwill by creditors to succeed and the contact we've had has been positive." Source: Sunday Mail

Citigroup Sells Crowns Jewels after Subprime fallout

CITIGROUP is in talks to sell a majority stake in Smith Barney, the brokerage firm, to Morgan Stanley in a deal that would create the world's biggest wealth manager.
Picture: APThe negotiations came to light as Robert Rubin, the former US Treasury Secretary, resigned as senior counsellor and director of Citigroup after months of criticism for his role in leading what was once the world’s largest bank to the brink of collapse.
Under the deal being discussed by Morgan Stanley and Citigroup, 51 per cent of Smith Barney will be sold to Morgan Stanley with an option to buy the rest of the business within five years.
Morgan Stanley declined to comment on the talks and Citigroup did not respond to requests for comment. It was not clear how much the deal would cost Morgan Stanley.
The banks are expected to work through the weekend to finalise the terms of the deal. The merger would help Morgan Stanley, which converted to a bank holding company last year and subsequently received $US10 billion ($14 billion) in Government aid, to diversify.
Citigroup, which has taken $US45 billion in government funding, is likely to welcome the additional capital that the deal would provide. The move is also in line with the strategy of Vikram Pandit, the Citigroup chief executive, to downsize the business after the sub-prime debacle. Citigroup is dismissing 52,000 of its workers after it made $US20 billion in credit-related losses.
The bank also announced the resignation of Mr Rubin, who was Treasury Secretary from 1995 to 1999. In a letter to Mr Pandit, Mr Rubin said: “My great regret is that I and so many of us who have been involved in this industry for so long did not recognise the serious possibility of the extreme circumstances that the financial system faces today.”
Mr Rubin, who joined Citigroup in 1999, has been excoriated in the media as the force behind the bank’s decision to chase profits by pushing into risky credit-related products. His duties at the bank, other than using his network to attract clients, were not clear, but insiders said that his influence was pervasive.
In his time at Citigroup, Mr Rubin collected about $US150 million in remuneration.
Before becoming Treasury Secretary, Mr Rubin, who is a graduate of Harvard and Yale Law School, had a long career at Goldman Sachs, where he started on the arbitrage trading desk and worked his way up to become co-chairman of the elite bank.
Shares in Citigroup closed in New York at $US6.75, down by 5.7 per cent.

British rate cut awaits London investors next week

British rate cut awaits London investors next week
Market watch top headlinesAustralian reportsAust markets: Australian share market closes higherAust dollar report: Aussie dollar closes at eight-week lowAust credit close: Aussie bonds closes mixedWorld reportsWorld commodities: Oil prices mixed, gold higherWorld markets: US stocks fall sharplyStocks to watchERA, AXA, COF, OZL, ORI, HVN, TAH, REU, RAT, AFG, HGG, GNS,
LONDON, Jan 30 AFPJanuary 31 2009, 06:33AMBritain is next week braced for yet another cut in interest rates to record low levels but it may not be enough to boost the London stock market as recession weighs on the economy, traders said.
The FTSE 100 index of leading shares closed on Friday at 4,149.64 points, up 2.39 per cent or 97.17 points from a week earlier.
The Bank of England (BoE) is widely expected to slash British borrowing costs by a further 50 basis points to 1 per cent at a meeting on Thursday.Now at 1.5 per cent, interest rates are at the lowest level since the British central bank was formed in 1694.
Next week also sees earnings results from energy giant BP, telecommunications group Vodafone and pharmaceutical company GlaxoSmithKline.
This week, a statement from Barclays bank stressing it did not need a government bailout following speculation to the contrary sent its share price and those of its peers rocketing.
Some of the gains were lost as the weekend approached due to "poor earnings and bleak labour and housing market data from the US, heightening fears of a deeper global recession", said City Index market strategist Nick Serff.
"This ended a four-day surge for the major indexes, their best performance in two months," he said.
Another notable British corporate announcement this week came from Anglo-Dutch energy giant Royal Dutch Shell, which said it had made a net loss of $US2.81 billion ($A4.3 billion) in the final quarter of 2008 on plunging oil prices.
The loss compared with a net profit of $US8.47 billion ($A13 billion) during the fourth quarter of 2007, when crude prices were far higher, Europe's largest oil company said.

Mortgage Relief: Banks agree to help homeowner battlers save their homes

While American homeowners families lose their homes to foreclosures at a rate of 10,000 homes a day, the Australian Government has negotiated with the big four Australian banks for struggling homeowners to allow up to 12 months forbearance on home loans, with the interest to capitalise on the loans,and the waiving of penalty rates.
Agreement by the banks to these requests from Treasurer Wayne Swan gets a big tick from even the most ardent bank bashers.
Maybe the long suffering American jobless homeowners will also get this kind of support, security and peace of mind, and hopefully soon.
Kevin Rudd, Australia’s Prime Minister is to announce his mortgage relief plan that will freeze mortgage payments for up to 12 months for financially stressed homeowners.


Australia's big-four banks have reached the landmark agreement to help prevent struggling families from losing their homes. 


As part of a comprehensive package of assistance for working families with mortgage commitments, the Commonwealth Bank, the National Australia Bank, Westpac Banking Corporation and ANZ Bank will put a freeze on mortgage payments in hardship cases.

 That could mean waiving any penalty rates and fees and charges for late payments.
Banks also indicated that on other loans, including car loans, where appropriate, they would consider interest-only repayment options, and will also consider waiving fees in hardship cases. 

 The Government's purpose in its negotiations with the banks has been clear - to ask the banks to provide maximum flexibility for borrowers suffering temporary hardship, through loss of income from work.
Kevin Rudd gave credit where credit was due and praised and thanked the banks for the goodwill they have demonstrated in this area, and gave credit to Treasurer Wayne Swan for his efforts in negotiating the agreement.

This is just another demonstration Kevin Rudd is doing such a great job at keeping the economy ticking over in a business as usual mode, underpinning property values for all of us, whilst the rest of the World struggles to get out of the global financial crisis.
Good one Kevin.

Mortgages. Why people are dissatisfied with the banks, and why the banks don't care..

Mortgage rates may rise above any official cash rate increase, according to many banks. The Government does like it, customers don't like, but the banks don't care. They have us "by the short and curly's."

You may have read the recent report by Choice that the big banks in Australia are on the nose with their customers.

People like the fact that we have a stable banking and financial system, and that their banks have been the rock in the global financial crisis.

But I guess its something that Australians expect from their banks.

The thing that gets under our skin is that Australia's Banks are the most profitable in the World, and while we can't deny they are well run, the real reason for this is the lack of mortgage competition that Banks face in Australia.

And that will lead to the banks taking their customers for granted. And in my opinion they do just that.

The fees and charges that they have been charging us for the last ten years or so, have in fact been in my view unlawful.

But we have let them get away with it, so they get on adding them.

Building societies and credit unions on the other hand are well liked by their customers.

They treat their customers as if they owned the business, and they do. Once you have an account with a building society or credit union, you become a joint owner of that organisation.

Banks do have mission statements that make their customers 'stakeholders'. This however is often meaningless when the share prices take a hit, and the the top officers of the banks get rewarded when share prices rise. And the easiest way to do that is to make more profit on every customer.

What we need to do is to tell the banks when we are not happy, and if you are not heard, then to move your account.

More competition in the Mortgage space is required.

The Treasurer Wayne Swan has been sniping at the banks about mortgage rates, and trying to hold them to official rate rises only.

But customers making a stand and competition are the key to lower mortgage rates.

You probably didn't notice, but Australia's mortgage brokers and securitised mortgage lenders have become largely irrelevant leading up to, and during the Global Financial Crisis. They just couldn't rise the funding to remain competitive with the banks.

Wayne Swan is trying to support the securitised mortgage lenders and has just pledged a further $8 billion dollars for mortgage funding. But that is just a drop in the bucket.

We need to understand that more is required.

Mortgage competition has collapsed in Australia

Mortgage brokers have gone from 40% share to 20% share of the mortgage market, and worse, mortgage originators have fallen from around 25% to just 2.5% of the mortgage business in recent times, and that is the issue.

There is no reason for banks to worry over the next two or three years. The competition has been vanquished and there is no one on the horizon to challenge them.

So what will you do about it? Get your bank to reduce your fees, move to a building society or credit union, get your loan refinanced by a mortgage originator, or just cop it sweet?

ANZ leads the charge of the bank brigade in mortgage interest rate increase

Was it their turn to go first? No one is saying, but the ANZ lead the other three major banks in increasing their variable mortgage home loan rates by a quarter of a percent after the Reserve Bank raised the cash rate by a similar amount.

ANZ was the first of the major banks to move in late morning, the National Australia Bank following by mid afternoon, and the Commonwealth Bank and Westpac by days end.

All four banks are raising their variable mortgage home loan rate by the same amount of the official rate rise of quarter of one percent, that was announced by the RBA this week.

These same banks had recently stated that they will raise rates even without RBA official increases so I guess we should be grateful the rises were not higher.

In my view we need more competition in the Australian mortgage market. But instead we have less as most of the big non bank mortgage lenders are being gobbled up by the banks in the wake of Global Financial Crisis.

Author: Rick Adlam, Mr Mortgage