In reference to HSBC credit card fraud a Wisconsin man suggests: “Credit card companies (and even banks) could eliminate massive fraud if they would program into their system a function that would send me an email of the transaction every time I (or someone) made a charge on my credit/debit card. Every time, not just once a day or once a month. That way it is fresh in my mind and if I knew I made no charges that day, it would trigger me to investigate. That email to me is not only free to the bank, but it would save billions in credit card fraud yearly.”
Some, such as eBay’s PayPal currently send “thank you” emails every time a person uses their card. The idea does foster a feeling of protection against fraud. On the other hand when a credit card transaction is fraudulent, it may still go to a collection agency. If it is a merchant credit card the merchant still makes money, the credit card company makes money, and the “receivable’ is sold as a collaterized debt obligation. When there is no real debt to collect the entire system is a fraud, similar to subprime fraud seen today.
With subprime the idea was to sell as many mortgages as possible after rolling them in to collaterized debt obligations. Generating higher profts, as opposed to holding the paper for the long term, the system fell apart when garbage going in to the system finally polluted the overall product. Is the credit card market any better? In the future we will find out.
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