Phishing Scams - How To Warn People

​Phishing is the use of an email that attempts to scam a user into revealing private information. These emails appear to come from legitimate companies and usually direct you to an "official" looking webpage to update your personal information.

A recent article in Consumer Affairs by Mark Huffman, "Why you might fall for a phishing scam" describes some of the problems there are in trying to warn people about phishing scams:

Information is power and, when it comes to the criminal underground, it might as well be gold. Scammers who pick up chunks of information about you can quickly pick your pocket.

An effective phishing scam almost always involves trickery and deception. A message in your email inbox is not what it first appears. ...

The challenge, then, is to find a way to identify these bogus pitches/threats and warn consumers before they make a costly error in judgment.

Two professors at the University of Alabama in Huntsville are studying phishing scams to determine the best way to help protect people from them:

The researchers say your response to a [phishing scam] warning is based on the strength of the authority issuing it. In addition, you have to understand it, remember it, change your attitude and be motivated enough to change your behavior. ...

[P]hishing is not just a problem of technology, though fixes are normally offered only in those terms. Rather, a lot of it involves psychology.

MY ADVICE: Until better warnings are developed, despite the temptation of a promised, highly prized reward, always remember if something seems too good to be true, it usually is. There is very little in life that is free.

Source: Why you might fall for a phishing scam by Mark Huffman via Consumer Affairs

Guard Your Debit Card and PIN

Since companies have increased their network security following breaches of debit card and other credit information data thieves have shifted their focus to "that moment in time debit card data remains unprotected in a public setting — during the swipe and PIN-entry process."

From USA Today article: Data thieves target debit cards, PINs at point of sale:

Debit card account numbers and PINs are highly sought because they can be converted quickly into cash. A device called a mag stripe encoder can be purchased legally on the Internet. For about $200, anyone can embed a stolen payment card number onto a blank magnetic striped card. With the associated PIN, free cash is only an ATM away. . . .

Cynthia Larose (who chairs the privacy and security practice at the 500-attorney firm, Mintz LevinLarose) says:

"Debit card users should be mindful of the heightened risks,  Financial institutions generally will act quickly to make a victim whole in cases of fraud involving use of a credit card or an ATM machine. However, banks are not obligated to work with a victim in fraud cases involving use of a debit card at a POS terminal.

"Other than avoiding the use of debit cards at POS terminals, there probably is little a consumer can do," 

A final piece of advice: "Use cash."

From USA Today article: Why you should use your debit card sparingly:

Excerpts from USA Today interview with Jeff Hall, who directs the information-security practice at tax and risk consultancy McGladrey:

Criminals are scouting vulnerable venues. . . . All electronic devices today run some sort of operating system. As such, they can all be misused if the right person can insert themselves into the process at the right point.

Debit cards are tied directly to someone's bank account. As a result, there is typically a high likelihood of tapping into a large amount of cash quickly. Mag stripe data is fairly easy to come by. If you have complete mag stripe data with a PIN, you can completely impersonate the real card.

Consumers should use credit cards and stop using debit cards. However, that means consumers will need to be diligent in paying off the balance of their cards every month. Debit cards are risky because the government has not put the same loss restrictions on them that they have for credit cards. Consumer groups have been lobbying for these types of restrictions for the last few years, but that is likely to come to an end in the next year or two as state governments and/or the federal government respond.

Under Pressure, Credit Card Upsells Disappearing

Many credit card holders are declining and terminating "extra" services offered by credit card companies such as debt protection, credit monitoring and identity theft protection. In addition, major banks are withdrawing these services, in part, because of recent enforcement actions by the Consumer Financial Protection Bureau (CFPB). Since July of 2012, the CFPB has reached multi-million dollar agreements with Capitol One, Discover and Bank of America regarding alleged violations of consumer protection law with regard to these types of "extras."

Good tips at the end of the article on considering whether to purchase the "extra" services offered by credit card companies:

1. Shop around
2. Ask for details
3. Stay on them

Source Article: Under Pressure, Credit Card Upsells Disappearing - ABC News

Jeffrey Lapin of Lapin Law Offices has blogged about these prior CFPB enforcement actions:

• Discover Bank To Refund $200 Million for Deceptive Marketing
• American Express to Pay Millions in Refunds and Fines 

Lapin Law Offices represents Nebraska consumers who rights have been violated by debt collectors, credit reporting companies and telemarketers.

Consumer Financial Protection Bureau Study Finds Credit Scores Used by Consumers and Lenders Can Differ > Consumer Financial Protection Bureau

On September 25, 2012, the Consumer Financial Protection Bureau (CFPB) released the results of its study of credit scores, just 5 days before the CFPB will begin supervising credit-reporting companies. 

The CFPB study found:

• One out of five consumers would likely receive a meaningfully different score than would a creditor. 
• Score discrepancies may generate consumer harm. 
• Consumers unlikely to know about score discrepancies. 

The CFPB recommends that consumers consider the following in evaluating credit scores they receive:

• Shop around for credit. 
• Check the credit report for accuracy and dispute errors. 

The CFPB will begin supervising consumer reporting agencies, approximately 30, that  account for about 94% of the entire market's. CFPB  examiners will be looking to verify that consumer reporting companies are complying with federal consumer financial law, including that the companies are using and providing accurate information, handling consumer disputes, making disclosures available, and preventing fraud and identity theft.

The CFPB's Press Release and Study can be found:

• Press Release: Consumer Financial Protection Bureau Study Finds Credit Scores Used by Consumers and Lenders Can Differ
• Study: Analysis of Differences between Consumer- and Creditor-Purchased Credit Scores

On September 25, 2012, the Consumer Financial Protection Bureau (CFPB) released the results of its study of credit scores, just 5 days before the CFPB will begin supervising credit-reporting companies. 

The CFPB study found:

• One out of five consumers would likely receive a meaningfully different score than would a creditor. 
• Score discrepancies may generate consumer harm. 
• Consumers unlikely to know about score discrepancies. 

The CFPB recommends that consumers consider the following in evaluating credit scores they receive:

• Shop around for credit. 
• Check the credit report for accuracy and dispute errors. 

The CFPB will begin supervising consumer reporting agencies, approximately 30, that  account for about 94% of the entire market's. CFPB  examiners will be looking to verify that consumer reporting companies are complying with federal consumer financial law, including that the companies are using and providing accurate information, handling consumer disputes, making disclosures available, and preventing fraud and identity theft.

The CFPB's Press Release and Study can be found:

• Press Release: Consumer Financial Protection Bureau Study Finds Credit Scores Used by Consumers and Lenders Can Differ
• Study: Analysis of Differences between Consumer- and Creditor-Purchased Credit Scores