Credit card fraud is bad news for those in credit card banking who will never read the fine print of any credit card bill. Credit card companies want you to sign up with their credit service accounts and sign up for a new card offering you protection. The problem they can’t solve was long ago with identity theft: people were stealing your credit cards all over again. It hasn’t completely stopped since. Now more and more banks are asking you to read the credit card companies’ warnings and check your credit report. How do they do that? Visa’s warnings usually apply to the first three digits of your new cards and to the account you’ve been using for about 60 days. They also apply to all subsequent numbers and expiration dates. If you leave a Visa and your next credit card transaction is at a bank that gives the credit card company an automatic ‘No Problems’ check on your report, none of these bank’s reports will look back 20 days or more.
Here’s the catch; Visa won’t change a dime of your report–they’ve already introduced a new kind of ‘no problems’ that you’ll have to give up if you want to renew your card with American Express. And if you don’t pay the bill, the old American Express will ask Visa for another ‘no problem’ check.
That’s the twist on the first warning: each time you use your new card with your current company, they will automatically turn you loose on Internet cafes, saloon counters, the phone helpline, and postboxes. In their most stringent warnings yet, Visa warned you that identity theft was on the rise and people were searching for creative ways to create havoc with your credit history.
It has, in fact, been 50 years since the First Anti-Visa Act was passed, yet the Visa warning still applies. So why is the credit reporting firm so wary of new credit card users?
The First Anti-Visa Act (1962) wasn’t designed to ban new credit card fraud–it was intended to curtail it. The problem began in the early years of the 21st century, when some of the same fraudsters who had stolen people’s credit cards attempted to use credit cards of other card holders to open fraudulent accounts.
The result? Panic. In December 1962, two mail order cataloguers in Delaware and Maryland used different phishing techniques to claim that they had obtained credit card credentials from a corporation they owned with a relative or close family member. The proprietors were trying to hide the truth about their activities by claiming that they never applied for any of the other cards they were trying to obtain and never activated the card. They only exchanged addresses for bogus information. They also used the generic title ‘Home Equity Credit Card Corp.’ Both were scams, for as soon as their credentials were shown to be valid. In 1989, two mail order cataloguers in California and Washington, D.C. were attempting to use the same techniques. All of them used the same fraudulent ‘home equity’ credit card to obtain credentials from customer service representatives they owed money to.
The first scam claimed that it was possible to get the consumer to disclose the card details of someone who they thought used their account to make an unauthorized purchase. The consumer was not permitted to provide that detail if the account holder had already confirmed the card holder’s identity. The second scam asked consumers to respond with an address for disputes about security problems with the card. The response contained the word ‘disputes’ instead of legitimate inquiries.
The warnings were issued because most credit card fraud concerns concern consumer credit, not financial safety concerns. They are warnings about a dangerous industry that allows fraudsters to gain entry into the unsuspecting public’s minds by posing as consumers, calling them in the phone, and selling them bogus information. Consumer credit reporting companies, in preparing these warnings, devised the lure of increased profits and the ever-slim path toward a more trusting population.
The First Anti-Visa Act didn’t make protection an official part of the Federal Trade Commission Act. (The Act was signed by four other amendments in the same signature move.) But in December of 1976, three Georgia consumer protection agencies sued the industry, demanding that the Federal Trade Commission respond to consumer reporting companies before they sued.