Careful with your plastic money

There are 7.7 million credit card holders in the country today.

Obviously, the credit card industry is doing well in the Philippines, undoubtedly still very far from the more developed countries like the United States where even $10.00 purchases are charged to cards, but the fact that there are fourteen credit card companies (most of them affiliated with existing banks in the country) now operating here to serve all 7.7 million card holders, the industry is hale and hearty.

 Actually, it is more accurate to say that there are 7.7 million active credit cards being used here, but since most people usually own two, three or even four cards at the same time, the actual number of credit card holders in the country is estimated by the Credit Card Association of the Philippines (CCAP) to be somewhere between 2.5 million to 4 million individuals. And why not indeed when some credit card promos are so enticing and varies from one company to the other that every month there are bargains to avail of from these credit cards. Delinquency is kept at a minimum now too, at only 5.2 percent, meaning about 95 percent of credit card holders pay their accounts on time, according to CCAP executive director Alex Ilagan.

With the growth of any industry, the creative minds of devious minds are kept busy.  Credit card scams can be very ingenious, the perpetrators more inventive as security measures tighten up. I remember a couple of years back when my wife and I went to Bangkok on a holiday. I remember that the only time I used my credit card was in an outlet selling a top global brand, cautious as we were about scams. Imagine our surprise when we got our next billing in the Philippines and saw a couple of hundreds of thousands charged to my Citibank card. These charges were mainly from airline tickets, hauling charges, huge gasoline bills and trucking services in Bangkok, Malaysia and Singapore! Fortunately, the card was cloned even when we had gone back to the country, which was easy enough to prove, and to the credit of Citibank which had investigated the matter thoroughly, we were never charged for the unauthorized purchases.

These days, credit card companies have successfully beefed up their security measures, though not a hundred percent. When abroad and in the absence of a notice of such trip, your card is temporarily disabled, which happened to us while in Spain two years ago. We had to call the office in the Philippines to help us sort out the problem.  It would have been disastrous, to say the least. Locally, big purchases are automatically flagged, and the credit card company immediately contacts your cell phone for verification, which makes users like us feel more secure.

 The thing to look out for now is on-line fraud. E-commerce is catching fire pretty fast in the country, and not just with the young ones.  According to the CCAP officer, on-line purchases using credit cards amount to five hundred million pesos a year or only about one percent of the total credit card business in the Philippines which is still a pretty significant figure on its own.

Safeguarding our credit card information is basic here, according to Mr. Ilagan. On-line shopping is obviously here to stay and will proliferate across the country in just a couple of years, so caution and good judgment are needed. Many fraud perpetrators are so savvy, their evil minds working like advanced computers that we mortals may not be a match for them.  It is important that we determine first if the website in question is safe and secure. Mr. Ilagan says that before we type in our credit card details, look out for these signs: a small padlock symbol usually found in the address bar though they may also be located elsewhere in the browser window.  A safe web address usually begins with https://, or look for the S after the name which stands for Secure. My guess is online scammers will wisen up to these in no time, and then the legitimate online traders will have to be more inventive as the scammers catch up.

What most others do when they find that they do have a legitimate need to use their card for online purchases is to open a separate credit card account to be used solely for such purchases, and make sure this dedicated card does not have a big credit limit to minimize your exposure. Many banks have instituted their own monitoring systems or use one-time passwords and card validation codes.  Not all banks have adopted the 3D Secure platform which I hear is an excellent system, but I venture to guess that it is only a matter of time before this becomes standard among bank-owned credit card companies.

But no matter what top-of-the-line security measures are adopted by these credit card companies, the bottom line is: safety begins with us, the users. We should exert all efforts to verify the identity, location and contact numbers of the retailer, especially if their business is limited to online. Those with stand-up stores would be more trustworthy. Also, these retailers inevitably chalk up a reputation among netizens, so it is advisable to do some research among social media friends or consumer review sites. You’ll never know what you may uncover with such an innocent research.

Equally important is to make sure that your credit card information is not shared by your online retailer with others for unrelated business. It has become so irritating to get promo deals, etc on your cell phone or via e-mail.

Finally, Mr. Ilagan reminds everyone that online retailers have no need for your PIN, nor do they need to know your online banking password.  Guard these with your life, and if some retailers ask for these, that is a definite red flag right there.

The good news is, according to Mr. Ilagan, in most fraudulent transactions, it is not the card holder that is left holding the bag—most of the time, he says, the credit card companies end up absorbing the loss.

Mabuhay!!! Be proud to be a Filipino.

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