Tag Archives: credit cards

Holidays, Miscellaneous

New Perils of Today (Part 2) & More On UPS/Fedex Problem

Photo:MALIZ ONG (publicdomainpictures.net)
Photo:MALIZ ONG (publicdomainpictures.net)

Christmas Day has come and gone but the season continues until 5 Jan (Epiphany) when traditionally the Three Wise Men arrive (Eastern Orthodox celebrates that day as Christmas Day). The fallout from Target debacle continues as consumers find out their credit card numbers were used for unauthorized transactions. Some banks are either canceling credit cards used at Target or limiting the daily withdrawal limits on debit cards. Security experts believe the credit card processor was hacked but Target has not been forthcoming exactly how the criminals pulled it off. What is certain is they stole debit and credit card numbers giving then unprecedented access to millions of peoples credit and checking accounts, not to mention they use of whatever personal information they also were able to retrieve.

One good lesson out of all of this is many are going to realize how using debit cards is not wise when shopping, whether in-store or on Internet. Debit cards are not credit cards even when you enter to be used as one (that just means you do not use a pin ). Cash immediately leaves your account (exceptions are store debit cards that submit electronic checks to your bank so it takes 2-3 days to show up on your account) to the merchant. If thieves get access, then can easily take as much money as they can before the card is cancelled or account closes. Most debit cards have daily cash limits set by the bank and the thieves will try to hit that right away. If you are someone who goes paycheck to paycheck, that can really hurt you when checks cannot clear resulting in bank charges.

The one caveat is when you use the debit card to as a credit card. This occurs either when you select to use as credit rather than enter a pin. This is a good way to avoid people seeing you key in the pin number at the grocery store or at the gas station. Since it is processed as a credit card, it goes through either MasterCard or Visa system. That does not mean you get credit card protection in case of misuse (see next paragraph), just an added layer of security during processing. Sometimes it delays the charge appearing on your statement (though you might see a nominal hold on your account) for a few days

The rules governing their use are different. Credit cards have stronger protections in case of theft or misuse, and your liability is capped at $50.00 (many banks offer zero liability). Debit cards have higher caps (up to $500) and often take longer to get money put back in that was unauthorized. Some banks do offer higher protection for debit cards but not all. Check with your bank about their policy is on atm/debit card liability. Many advise, if you need to use a debit card as part of your budget, to use prepaid debit cards. You load a certain amount of cash on the card and use it like a debit card but without having it tied to a checking account Some banks offer them for free with direct deposit, some do not. The advantage of these cards is that you can only spend what is on them but with some places charging a fee, it may not be a good deal.

Credit cards are best for Internet shopping and certain high value transactions (like buying televisions). Using debit cards for online transactions is like opening up a door into your bank account. Do not use your debit card for online purchases even if it is from a reputable site. It is not worth the risk.

What about ordinary shopping like at the supermarket, the pharmacy or other places? Consider cash, checks or credit cards. Most merchants accept checks drawn on a local bank and has the requisite information on it: your name, address, and telephone number. They also will want to see your identification, usually a drivers license or id card. Cash is also good but it means either a trip to your bank’s atm or going inside to cash a check. Credit cards are easy, just swipe and go. You need to be careful though because you can rack up a larger bill than you thought if you do not watch what you charge. Use your banks credit card website to monitor charges and alert when when charges occur. I have mine set up for any charge above $5.00 so I get notified swiftly when a charge goes through.

Think strategically where to use cash, checks, or credit card. Perhaps the supermarket you frequent often is best for cash or checks. They see you often there and probably know who you are by now. Shopping at larger stores or national chains perhaps are best for credit cards (especially if you need to return) and cash. For high end products like televisions, computers, iPods, or smart phones, use a credit card. Often most credit cards have their own warranty information on many things you purchase on the card. Check to see what your card offers. For gas stations, credit cards and cash are the best way. If you have to use a debit card, use it as a credit card. But be warned! Many scammers have used gas stations to install skimmers and other ways to get your car info. If you want total security, just go inside and pay there rather than at the pump.

UPS/FEDEX Christmas Debacle
Not everyone was displeased with what happened. Some took the time to point out how the Post Office(USPS) delivered its packages on time over the private services. And they are wagging their fingers at politicians who want to privatize the USPS. What happened here was likely two things. One over promising delivery by online merchants and number two shipping companies not realizing how much was coming down the line until too late. Amazon and many merchants often notify shippers electronically when packages are being generated for pickup (which is why on tracking information you see that the shipping company has received the info but not the package yet). So something fell into the cracks here. Not surprising considering how many order online these days.

What is likely to happen is something old fashioned but works well. You set up hard deadlines for shipping for ground packages and express packages. You limit express packages (overnight and 2nd day) to being shipped three or four days ahead of the actual holiday. Using this last holiday, all 2nd day and overnight must be tendered to them by 20 Dec at 7:pm. After that no service delivery guarantee by Christmas. Merchants would have to follow hard deadlines as well so that the shipping companies (and that includes USPS) do not swamped with too many packages all at once. Those chortling at how the Post Office did so well ought to be careful in their gloating. If someone dropped 100,00o parcels into their system for 2 day or overnight delivery without much notice, they would be strained as well.

Now that being said, I got some parcels I ordered through Amazon (no presents, just some general stuff and in one case replacement for a broken computer accessory). One was scheduled to arrive Christmas Eve but in fact arrived a day earlier. One was delivered by UPS and the other by ONTRAC. Merchants like Amazon do use USPS to cut costs. Many packages I get from Amazon are through either Fedex SmartPost or UPS SurePost because they are small packages. In both these cases, they shipping company delivers them to the USPS distribution center for the zip code and USPS does final delivery. It works pretty well though one package was held up because a USPS employee forgot they handle packages for a couple of cities in the area.

Update-1April2014:You can shop for shipping deals online. The Raw Feed, for instance, has coupons good for Fedex shipping and probably if you check around online, UPS and other package delivery companies have them as well.

Sources:
1. Credit and Debit Cards:What You Need To Know (6 Jan 2009, New York Times)
2. Best Prepaid Cards For Holiday Shopping (13 Dec 2013, Forbes)

Miscellaneous

The New Perils of Today

Photo:MALIZ ONG (publicdomainpictures.net)
Photo:MALIZ ONG (publicdomainpictures.net)

In the good old days when things were done mostly by hand and phone, crooks and con artists came up with clever ways to steal from stores. Shoplifting–the five finger discount–was popular but risky if you got caught. Stores that offered up charge cards or took credit cards offered ways for the crook to make a living. Often cards were put on a device which impressed the card on a charge slip. And it meant you got a copy of the charge and they did too for processing. Carbon paper used to be used and those crafty cons learned to sift through store garbage cans to retrieve them. Then of course the customer would get his bill and see a lot more had been charged. Today thanks to credit and debit cards, we swipe them on a terminal to pay for our purchases. And the crooks got smart too.

They learned that you can skim the important data by using devices that capture as you swipe. Gas stations have become a real target since a lot of people swipe their debit cards. Grocery stores have been caught too when someone shows up claiming to be from the company that works on those terminals adds a little something to them. Target, a large name in the retail business, got hit hard according to news reports. Just about everyone who used the store between 27 Nov and 15 Dec potentially gave their important credit card and debit card data to these sophisticated thieves. All Target credit and debit cards are effected as are any other credit cards swiped during that time.

Now Target has had to make official statements and apologies. Too bad their customer service is virtually unreachable right now (busy signals and the recorded voice coming on saying all circuits are busy). Go online to check your RedCard perhaps to change your pin on the debit card? Nope, cannot do that either. The website is not working there but you can apply for one! I went down to my local Target in San Bruno, California and spoke to a young man at the Guest Services counter. Sadly I learned that you cannot change your pin there. You have to go to the website or call up to have it done. So I politely asked for some scissors and cut my RedCard debit card in half. He looked unconcerned though the Target checker standing behind him gawked at what I did. I handed him back the scissors and the now decapitated card. And I walked away. I had thought about shopping there that day. I brought my checks with me.

I decided otherwise. They were either cleverly hacked from the outside or someone from the inside did the job. No word yet on how many people have unauthorized charges. So far I have had none but then again debit charges made through Target’s card take a few days to show up (it is processed like a check rather than a straight debit). Already I see people quite rightly mad and complaining how they cannot get through to Target either at the website or by the phone. And how they were exposed to crooks when they swiped their cards. It may, at least for some, warrant some rethinking of using debit cards to pay for things. I loathe to use credit cards for grocery shopping and usually use a debit card (but using the charge function rather than debit). Still it makes one think using checks is not such a bad thing after all. Perhaps the check printers are about to get a bump in orders.

As for Target, since I cannot either contact them by phone or through the website, I will send an old fashioned postal letter directing them to cancel the debit card. If I shop at Target in the future, I will use cash or pay by check. No more debit or credit cards (except when ordering online) for use there. I may never go back since I can get most of what I need elsewhere (they do have some good prices on groceries compared to the other stores in the area). But I likely will not go back. They way they handled this was to say oops, sorry, and good luck to you! The fact their customer service and certain areas of their website was unreachable is the clincher. So in this age of tech savvy crooks and con artists, places like Target ought to have been more on the ball. This is not inconsequential as it involves peoples credit card and debit card information that thieves will be sure to use. No doubt lawsuits are pending. In the end the consumer must watch over their information because places like Target are sometimes unable to do so when clever crooks break the system and win the jackpot.