Australia Cards and Unsecured Business Guides

There have calls to ban credit card cheques after customer groups and the consumer affairs minister Gareth Thomas have noted a rise in financial scammers, a result of “immoral” bank practices.

Figures released last week showed that credit card-cheque fraud has soared almost 30% from 2,665 incidents in 2007 to 3,428 in 2008. The banks have therefore been accused of adding to the risk of fraud by posting clients an increasing number of credit-card cheques.

The system works by banks sending cheques to credit-card holders and taxing excessive charges, often at more than 20%, compared with an average 17.7% on credit cards themselves. Credit card cheques have openly been criticised because they do not carry the same protection as a card.

However, banks justify such financial gains by saying that cheques are an alternative way of drawing on a card account where the card itself is not accepted, for example by a tradesman.

The UK payment body, APCAS revealed that at the end of 2008 credit card cheques accounted for 0.18% of total consumer debt. Last year UK consumers spent £3.23bn using them, amounting to just 2% of all spending on credit cards.

However, with this, APCAS noted that there has been a surge in fraudulent usage of these cheques, which added around £400,000 to overall financial crime.

Banks have also been accused of raising credit-card limits to try to temp customers into racking up more debt, an act several consumer organisations stated to be disgraceful.

Credit-card cheque customer case

An example of such manipulation is consumer Bennita Dray, 46, a lecturer from London, and a customer to Halifax bank for 12 years. The bank sent Dray credit-card cheques through the post. They also wrote to her to tell her that her credit card and overdraft limits had been increased.

However, Dray stated that she already owes the bank around £36,000, and did not ask for an increase She said: “It’s outrages.”

Halifax denied it was trying to increase Dray’s debt, to which a spokesman for the bank said: “We do not offer increased credit to someone who cannot afford it.”

Credit care

Peter Vicary-Smith from a consumer group said of the increasing situation: “Sending people unsolicited credit-card cheques and extending credit limits without being asked is not just irresponsible — it’s immoral.”

Thomas said: “Stopping the unsolicited sending of these cheques will help people take control of their finances and make things tougher for fraudsters who cost consumers millions each year.”

Therefore, in an attempt to protect consumers from getting into uncontrollable levels of debt, Gordon Brown stated that there would be a proposal of a White Paper on consumer rights and access for advice for those struggling to re-pay their debts will be improved.

The programme will look at preventing credit card companies from increasing spending limits and reduce sending out credit card cheques.

Stephen Sklaroff, a general director of a finance association group agrees with the reform, but reminded that any change should be well thought through: “Economic recovery relies on an affordable supply of credit to promote consumer confidence and boost spending.”

Of course, anyone that owns a credit card is at risk of falling victim to credit card fraud, as this type of activity is rife these days with fraudsters using increasingly sophisticated methods in order to commit fraudulent crimes relating to credit cards and even debit cards/bank accounts.

However, according to a recent report there are some groups that are more at risk of falling victim to credit card fraud than others, and these groups are being urged to exercise increased caution when it comes to their credit cards.

Young people and men more susceptible to credit card fraud

The data comes from a study that was carried out by Saga, and the results of the study showed that both younger people and men were at increased risk of falling victim to credit card fraud.

A number of reasons were given for these increased risks, with one of the major risk factors being that people within these two groups are more likely to have multiple credit cards and carry all of their cards around with them at the same time.

There was particular emphasis on the fact that younger consumers could be highly susceptible to credit card fraud, with an official from Saga stating: “The younger generation are obviously more gung-ho and do not think that this kind of thing will happen to them and also if something does ensue, they may be relying on financial institutions to reimburse them.”

Stay cautious

However, with a separate study from AXA showing that around fifty percent of youngsters aged between fifteen and seventeen were considering applying for a credit card when they turn eighteen it is vital for younger consumers to consider the importance of being extremely cautious with their credit cards.

One mistake to avoid is carrying around multiple credit cards, as this can increase the chances of becoming a victim of fraud. Another important factor is to avoid using the same PIN for all cards, as this can also increase risks.

All credit card holders should be extremely careful with regards to using their cards on websites that are not known to them, and should be very cautious about who is able to access their credit card information, whether it be through obtaining their card or through hearing them give out details on the phone or to another person.

Credit cards come with enough safety measures, but crimes that include credit card fraud are increasing at alarming rate. A very miniscule part of these unlawful activities is due to the flaws in systems, the major reason is careless attitude and lack of proper precaution in handling of credit cards and related documents. In this article we take a look at 5 important precautions that every credit card holder should take so that his credit card doesn’t fall into wrong hands.

1. Keep only the needful

With so much things competing for our attention in this modern world, having a purse full of credit cards can be disastrous. Imagine, taking out something from your purse and accidentally dropping one credit card. Things can become seriously complex with this simple mistake. So it is always better to keep the number of credit cards to a minimum, and if you really need them just carry the the one you require for the day or occasion and keep others at a safe place.

2. Keep them close to you

Always carry your credit cards in your wallet or purse that stays with you. A lot of people who leave their valuables away from their personal attention find them stolen by someone who is just waiting for a chance.

3. Don’t share the vitals

The credit card PIN number should be memorized, not written away in every nook and corner. Credit card PIN number is a security measure so that only the right owner makes transactions with the credit card. Even if your credit card has been stolen, very little can be done until someone actually has your PIN.

4. Get rid off the useless

Don’t let the unused or void credit cards lying around in drawers, simply cut them into four pieces if they are of no use to you anymore.

5. Don’t leave trails

When you do a transaction with credit cards, you get a receipt. It is good to keep receipts but, if the receipt carries a full detail of your credit card, like the complete number, it can be very risky. Either keep it at a place where it is absolutely safe or destroy it.

Follow these steps and be on the safer side.