The Year in Review - 2006
As 2007 bears down us, I thought I’d take the time to review the year as it relates to credit card fraud, Preventing E-Commerce Chargebacks, Merchant911, and all the rest of it.
The picture isn’t pretty. According to a tally over at Merchant911, In 2005 there were well over 55 Million credit card numbers stolen, hacked or at risk. According to PrivacyRights.org, the tally is 100 Million since February of 2005! That’s not good news for anyone, least of all the one third of the U.S. population that it affects - and that’s not counting the on-line merchants that will get burned.
And the sad thing is that most of these could have been prevented by a bit of dilligence and common sense. A huge number were on laptops that were taken home or left in cars and a huge number of those were government or financial institution officials that probably knew better but chose to ignore common sense. Almost all computer breeches can be prevented. Others were paper documents left laying around, and other stupid stunts.
I’m still thinking of issuing an Annual “Stupid Award,” but there’s just so many that deserve it!
There were probably a record number of breeches reported in 2006 but, since none were of the magnitude of the Card Systems breach of 40 million accounts in June of 2005, the press was lenient with me this year. I really got “beat up” last year doing Merchant911.org interviews for NPR, The Wall Street Journal and a feature story with CBS Evening News. Even a Japanese news television crew traveled down from New York City for a feature story. This year, the press had to be content with confusing the public by referring to credit card fraud as Identity Theft. “ID theft” is such a great buzz phrase that grabs the reading public but it’s so different from credit card fraud. Come on members of the press, if you’re reading this, credit card fraud is not Identity Theft - especially from the point of view of the card holding public!
Over at the Merchant911 web site, some new resources have been added and a few were pulled out because they didn’t measure up. One of them was even generating some income for us, but there were complaints about the way they did business so they were quietly pulled off the site. If you’re one of those providers that was there and aren’t any more - that’s probably why.
If you are an on-line merchant and you haven’t applied for membership with Merchant911, why not give it a try? It’s an excellent resource that’s well known and generally accepted in the payment processing industry and it’s totally free - and free of advertising in the member area too!
And please have a look at Preventing E-Commerce Chargebacks while you’re at it. This is a course designed primarily to educate the small Internet merchant about the perils of credit card fraud and how to recognize and deal with it. Fraud attempts are running about 4% of all transactions with 1.8% of accepted transactions resulting in fraud. Losses for 2005 were $2.8 Billion - that’s Billion with a “B.” Maybe you should consider learning a bit more about protecting yourself. When the survey results are in, 2006 is going to tip the scales at $3 Billion in lost revenue from credit card fraud. Why not learn all you can?
