I recently received a $15 rebate from a purchase made at newegg.com. The rebate came as a Visa prepaid debit card through Citi Bank. This weekend I used the card for a purchase at OfficeMax. The purchase came to $15.93, so I told the cashier I had $15 on a card (which he referred to as a gift card), and handed him the card and a $1 bill.

He swiped the card and told me the charge went through, then handed me back the card and the $1 bill. At first I assumed I had simply misheard the price or remembered the amount of the rebate wrong, but today I noticed the receipt said the card now had a $-.93 balance. I immediately expected this to turn into a horror story- overdraft fees on a gift card, customer service nightmare- but it was not to be. I called the customer service number on the card and was told by the CSR that their policy is to automatically cover a small amount of overage- I think the CSR said $5- as a courtesy. I was told I did not have to pay the 93 cents, and would not incur a fee.

This was definitely a pleasant surprise, and I have now come away with a better impression of both Visa and Citi Bank. It may not quite be above and beyond, but it is an experience worth sharing.

No, it's not to the level of "above and beyond." Still, it's nice to hear that the bank has such a friendly policy.

The question is, who eats the extra $5? The bank? Perhaps the unredeemed amount (not to mention fees) on thousands or millions of other prepaid cards more than makes up for any overages.

(Photo: pstardesign)

"Maybe Amazon and Visa should talk?" [The Atlantic]
(Photo: TheTruthAbout...)

Most consumers do not know that it costs $4 to $7 to buy a general purpose gift card or that they may be subject to monthly fees of up to $4.95 as soon as six months after the card is purchased, consumer advocates said on Monday.

More sad factoids findings from the survey, which was commissioned by the Consumer Federation of America and National Association of Consumer Agency Administrators:

• Only 33% of consumers "knew the fees involved in purchasing general purchase gift cards."
• Only 54% "knew that that monthly fees sometimes kicked in six to 12 months after their purchase."
• 17% said "they sometimes had trouble spending the entire amount of the card because a store refused to split a payment between the card and another payment method."

The consumer groups told Reuters that "An estimated 10 percent of this value (the card's original value) is never used."

If you want to give someone the gift of money, there are so many better ways to do this—personal check, actual cash, or store-specific gift cards. Buy someone a general purpose credit gift card, however, and you'll just be inadvertently giving a nice big gift to the card company.

"US consumer advocates warn of gift card costs" [Reuters]
(Photo: SuZenDu)

Customers affected in the data breach won't be able to obtain more than $40 from an ATM outside of Arizona. If the ATM charges a fee (and really, what ATM doesn't charge a fee to non-customers?) then the customer is limited to only $20.

Credit union President and CEO Ron Westad confirmed that AFCU instituted the $40 credit limit for some of its customers; however, he also said the 2,000 customers affected represent only 1 percent of credit union members.

If customers need cash, Westad recommended customers use their Visa debit cards at businesses that offer "cash back."

If you were affected, would you feel secure that your bank was proactively protecting you from fraud, or annoyed that they can put limits on your account with no prior warning?

AFCU Sets $40 ATM Withdrawal Limit [KPHO]

(Photo: Listener42)

rickb928 writes:

The only novelty here is that the error got into production, and was not caught and corrected before it went that far.

Submitters send files to processors which are supposed to be formatted according to specifications.

Note I wrote 'supposed to be'.

Some submitters do, from time to time, change their code, and sometimes they get it wrong. For instance padding a field with spaces instead of zeros. Woopsie...!

Seems that's what happened here. Sounds like a hex or dec field got padded with hex 20, and boom.

This is annoying, especially when the processor gets to help correct the overwhelming number of errors, and then tries to explain that it wasn't their fault. Plenty of blame to go around with this one.

And then explains why they don't both validate/sanitize input, and test for at least some reasonable maximum value in the transaction amount. A max amount of $10,000,000 would have fixed this. That and an obvious lapse in testing. This is what keeps my bosses awake sometimes, fearing they will end up on the front page of the fishwrap looking stupid 'cause their overworked minions screwed something up, or didn't check, or didn't test very well. I love one of the guys we have testing. He's insufferable, and he catches genuine show-stoppers on a regular basis. They can't pay him what he's been worth, literally $millions, just in avoiding downtime and re-working code that went too far down the wrong path.

Believe me, this is in some ways preferable to getting files with one byte wrong that doesn't show up for a month, or sending the wrong data format (hex instead of packed binary or EBCDIC, for instance) and crashing the process completely. Please, I know data should never IPL a system. Tell it to the architects, please. As if they don't know now, after the one crash...

If you knew what I know, you'd chuckle and share this story with some of your buddies in development and certification.

And pray a little.

At least it didn't overbill the cardholders by $.08/transaction. That would suck. This is easy by comparison. Just fix the report data. Piece of cake. Evening's worth of coding and slam it out in off-peak time. Hahahahaha!

Nothing to see here, keep moving along please... [Slashdot] (Photo: Ballistik Coffee Boy) (Thanks to Toland!)

PREVIOUSLY:
The $23 Quadrillion Meal
The $23 Quadrillion Pack Of Cigarettes
Unruly Teen Charges $23 Quadrillion At Drugstore

My new phone netted me a $70 rebate card in the mail a week ago Saturday, so I decided to take it for a day on the town. The card and I had some wild times at Wal-Mart, In-N-Out and Lowe's (man, do I know how to party). I was irritated that I couldn't use the card to get gas at Circle K because the card reader demanded I verify my identification by typing in a zip code — it wouldn't accept my own zip, nor that of the Verizon store where I bought the phone, and denied the transaction — but I blew off the inconvenience because I was confident that I'd eventually use up my $70 on purchases I would have made anyway.

Everything went to plan until I had just 11 cents left on the card. A less awesome person might have tossed it into the garbage at that point, but dammit, those 11 cents were mine and I wanted to use 'em. But every time I asked cashiers at multiple stores to debit 11 cents off my total purchase by using up the last of the card, the transactions were denied.

I called Verizon customer service and the rep tried to stop himself from laughing as he agreed to credit my account for the 11 cents I'd lost. It was a hollow victory, because although Verizon had made good that damned card still clung to a dime and penny intended for me, and like a clogged piggy bank just would not cough it up.

The fine print on the back of the card gave my conspiracy theory credence. After a year, Visa takes a $3 monthly maintenance fee three months after you last use the card. This means Visa-izon will get their dirty hands all over the 11 cents left on the card come October 2010.

Sure, 11 cents may not sound like much, but you've seen those Verizon commercials, right? The network of people following around the bespectacled Can You Hear Me Now Guy is quite the multitude. And if everyone on that network gets screwed out of 11 cents by Verizon rebate cards, you're talking a Scrooge McDuck money bin in lost rebates.

(Photo: Verizonuser)

23 Quadrillion Dollar Bill [KXAS]
PREVIOUSLY: The $23 Quadrillion Pack Of Cigarettes
Unruly Teen Charges $23 Quadrillion At Drugstore

Josh Muszynski was one of the many people hit yesterday by a VISA system error that charged them exactly $23,148,855,308,184,500.00. In his case, it was a pack of cigarettes at a gas station. He later spent a couple of hours on the phone with Bank of America unravelling the charge and the $15 fee. I don't know what's more absurd, the fact that the transaction was approved or that it took two hours to get the $15 overdraft fee removed. Reports the AP, "Bank of America tells WMUR-TV only the card issuer, Visa, could answer questions. Visa, in turn, referred questions to the bank."

NH man charged 23 quadrillion dollars for smokes [AP] (Photo: TheGlassPeople)
PREVIOUSLY: Unruly Teen Charges $23 Quadrillion At Drugstore

The embarrassingly-named VISA BUXX card is a debit card for teenagers: parents get reports, control, etc. My daughter has one.

My lectures about financial responsibility appear to have failed: yesterday she charged $23,148,855,308,184,500.00 at the drug store. That's 2,000 times more than the national debt, which is a paltry 11 trillion.

The ever-vigilant folks at VISA added a $20 "negative balance fee," and have suspended the card.

When I called, they said that there was a "system problem," and that the "help desk was working on it."

Wow, I didn't think of that before I submitted this story to Consumerist. Wouldn't that be ironic cosmic retribution? Jerky consumer puts VISA's honest programming mistake on display for the world to make snarky sarcastic comments about... but then it turns out that he's just posted the debit card number!

Happily, this is not the case. Please carry on with the caustic commentary.

In that same thread, another commenter named mlcastle points out the series of digits fails the Luhn check, a simple checksum formula invented in the 1950s, and so cannot be a valid credit card number.

Update 2: Hawkins posted a follow up on page 3 of the comments:

I have an update, if anybody's interested.

The issue was with VISA, not with CVS. Apparently lots of VISA debit card users were affected by it, at several different merchants. Each victim was charged exactly $23,148,855,308,184,500.00.

The folks at VISA have removed the 23-Grillion dollar charge, but not the $20 negative-balance fee. They promise to do so "as soon as this is all sorted out."

With some help from NBC "investigators", Stephanie was able to get some of her money back. But, regardless, these types of "gift" credit card are notoriously fishy. A Vanilla Visa gift card like the one Stephanie used charges an activation fee of around $5, plus a $2.50 monthly service fee if the card is not used within seven months. Not exactly better than plain old cash. And even if you're searching for a quick "no-hassle" credit card in order to make purchases online, many retailers don't honor them anyway.

The current credit card reform bill in the Senate has a provision aimed at curbing some of the worst gift card practices. Find out more about it here.

12 On Your Side Alert: Gift Cards [NBC]
(Photo: Rob Lee)

Capcom Unity Card - Part II: Things are Looking Up ^_^ [Cheap Ass Gamer] (Thanks to Josh!) (Photo: friskytuna)
PREVIOUSLY: Visa And Capcom Announce Street Fighter Hyper Fee Edition Card

* Even using one card, a 2% total return should be the minimum you receive back (versus the 1% that many cards tout as "standard".)
* Which card is best for you personally depends on how much you charge, where you charge, and when you charge.
* To make cash back cards work financially, you have to follow the other rules for good credit card management — no annual fee, pay off card every month, only buy stuff in your budget, etc.
* There are other factors you need to consider other than earning the most money. For instance, convenience.

I looked mainly at three cards in particular. Here's what's best depending on your circumstance:

* Chase Freedom — Much of your spending is concentrated in a few of Chase's 15 bonus (3%) categories (again, assuming you already have one of these cards and can get the 3%.)
* Blue Cash from American Express — You charge a lot each year (at least $15k, but more is better) and most of the charges are in the gas, grocery, and drugstore categories and occur later in the year (once you've gotten to the level-two rewards.)
* Schwab Bank Invest First Visa Signature — Most of your spending is not in any of the Chase or Amex Blue bonus categories and/or you want the simplicity of knowing you're getting a certain percentage back (2%) no matter what you charge or where.

Watch for the bait and switch. For instance, the Chase Freedom card recently lowered its rewards for new accounts. Instead of the once solid 3% cash back on certain transactions, 1% is the new norm. I go into my findings in more depth in the "The Best Cash Back Credit Card" on my blog Free Money Finance.

— FREE MONEY FINANCE (Photo: frankieleon)

Visa really wouldn't want to do much to hurt its business partnership with the companies, considering how big they are. In addition, the contracts they have with merchants aren't invalidated just because Visa delists them, so cutting ties completely could hurt Visa financially.

The recertification is just a formality, too:

"There have been no material system changes that would have negatively altered [last June's] certification, and we have in fact enhanced the security of our systems in the interim," RBS WorldPay said. "[But] because of the criminal intrusion, we need to be recertified earlier than the normal schedule."

In other words, this is purely Visa looking out for Visa by pretending to be concerned about payment processor security, while in reality just covering its butt.

"Visa drops Heartland, RBS WorldPay from PCI compliance list after breaches" [ComputerWorld] (Thanks to Roger!)
(Photo: orphanjones)

From the card's fee page:

• $9.95 activation fee
• $4.95 monthly fee
• $0.25 per debit use
• $1.50 per ATM withdrawal (not including whatever fee the ATM charges)
• $10 to close the card (and you can't just stop using it, because besides the $4.95 monthly fee, there's a $5 dormancy fee

Know the rules of the game before taking Capcom card [Defend Your Dollars]

There's no official word on which payment processor was hit this time. Our tipster says his credit union told him it was Heartland Payment Systems yet again, but after we published this post on Monday afternoon, the Executive Director of Marketing at Heartland wrote us to say it was not:

We, too, have heard of a new breach. But, we can say with confidence that it is not at Heartland.

Nancy Gross
Executive Director of Marketing
Heartland Payment Systems

Here's what our original tipster was told by his credit union:

I was just contacted by my credit union that both my MasterCard check cards had been compromised. I was told by my credit union that the breach occurred through Heartland Payment Systems.

I was told that they process the payment for over 175,000 retailers, and that thousands of people at my CU alone had been impacted.

So Heartland says it's not them—then who is it? In SC Magazine US, a security expert says that Visa and Mastercard know who the processor is, but won't name names:

The victim in this case appears to be a provider that processes online transactions, said David Shettler, vice president and CTO of Open Security Foundation, a nonprofit that researches data breaches.

He told SCMagazineUS.com on Monday that the group has been receiving tips about the breach since Feb. 12, but few details have been confirmed.

"What concerns me is that Visa and MasterCard, they clearly know who it is," Shettler said. "That just won't say anything because the processor hasn't come clean. The of sort feel it gives people is that Visa and MasterCard are covering for some unnamed organization."

ComputerWorld notes that the blog Office of Inadequate Security has posted notices from "the Tuscaloosa VA Federal Credit Union in Alabama, the Pennsylvania Credit Union Association, the Community Bankers Association of Illinois and the New York State Consumer Protection Board," as well as the Alabama Credit Union (also in Tuscaloosa).

As with the Heartland breach reported in January, it's likely that only account numbers and expiration dates were grabbed, and not SSNs or PINs.

"Just weeks after Heartland breach, another payment processor said to be hit" [ComputerWorld] (Thanks to Steven!)
"Visa confirms another payment processor breach" [SC Magazine US] (Thanks to Mike!)

RELATED
"Banks starting to report breach at unnamed processor" [Office of Inadequate Security]
(Photo: Ollie Crafoord)

There was a big flareup for a while, and then it looked like VISA was going to replace it. That was a year ago. Reid just IM'd me to say VISA has so far denied his claim because he paid for a small part of it with Paypal and he can't get any repair center to put it in writing that the unit is definitely unrepairable. His next step is to try to escalate it up within VISA and see if he can appeal the denial. Reid says, "It just makes me so mad that the [recent] price drop (400$-600$) covers the price of the repair they wanted to charge me for."

PREVIOUSLY: Visa Extended Warranty Protection Replaces Infamous "Dusty Playstation"
ORIGINAL: Dust Voids PS3 Warranty (Photo: basykes)

Credit card defaults are rising quickly, and the banks are rushing to keep ahead of the game — but by raising payments for already strapped consumers they may be adding to the wave of foreclosures.

USAToday says:

The growing problem is reflected in cases such as that of Dennis Spaulding, of Corona, Calif. He bought two last-minute plane tickets for his father's funeral in 2006, a purchase that increased the amount of credit he was using and made him appear riskier to banks. The result: Banks raised the interest rates on four of his credit cards — to 24% and higher — doubling his monthly payments to about $2,000.

That led to a financial spiral that has put him on the verge of losing his home and filing for bankruptcy. "I see no light at the end of the tunnel," says Spaulding, a cabinet designer.

USAToday says that according to the bankruptcy lawyers and housing counselors that they interviewed, many people are coming in for help with good mortgages — and bad credit cards.

"There's a misconception that everybody who comes in the door has a bad mortgage," says Doris Latorre, national director of quality assurance for Acorn Housing, which counsels troubled homeowners. "There are people who have good" mortgages but get into trouble with other loans when their banks change card terms, she says.

Rate increases and dramatic reductions in credit limits can push borrowers deeper into financial distress, rather than encourage them to pay their bills, says Robert McKinley, chief executive of CardTrak.com, a card research site.

The Federal Reserve is expected to issue a new rule about credit card rate increases and other aspects of the industry — but some critics are still pushing for a law that would protect consumers from rate increases on existing balances.

For those of you concerned about this trend, it seems clear that your overall debt utilization ratio (how much credit you use compared to how much available credit you have) seems to be the main thing that banks are looking at right now.

What do you think?

Changing credit card terms squeeze consumers [USAToday]
(Photo: Nrbelex )

It doesn't give you cash. No, it gives you a prepaid Visa debit card.

Use it within six months or start losing it.

The prepaid debit card is the reward for surviving a patented system designed to "maintain breakage." Still, we know there are rebate partisans out there, and if you're one of them, carefully read our tips for redeeming rebates before sending in your claim form, including:

• Read the offer carefully before you buy.
• Fill out paperwork promptly.
• Enclose all required documentation.
• Make copies of all paperwork to be mailed, including forms, receipts, and UPC codes.
• Consider notarizing your receipts.
• Send your form via certified mail and request a return receipt as proof that the company received your request.
• Watch for rebate checks or prepaid cards disguised as junk mail.

• Apple: Refurbished iPod touches on sale, 8GB for $180, 16GB for $240, 32GB for $320
• Amazon: Rewards points upgrade for existing Amazon.com Visa holders
• Apple: Free Select iTunes TV Shows in HD (requires iTunes 8

• Travelocity: United Airlines Sale: Round-trip flights from $108
• Amazon.com: Amazon.com Men's Watch Deals: Timex, Marc Ecko, more from $40 + free shipping
• Sears: Seven7 Women's Jeans for $18 + $6 s&h, more

• Budget Truck Rental: $50 Gift card when paying w/American Express
• Reverie: T-Shirt Sale: Buy 1 TEE get 1 free TEE
• BestBuy: Westinghouse 42" 1080p LCD HDTV and portable DVD Player for $749.99 + shipping

• Drugstore.com: New Customers: Save $5 or $10 off First Order
• Vann's: Panasonic FZ28 10.2MP Digital Camera $340 Shipped
• Amazon: Get Savings of up to 75% off Bargain Books

Customer Satisfaction Index Ranking (1,000 point scale)

American Express 783
Discover Card 751
Industry Average 724
National City 721
Chase 719
U.S. Bank 716
WaMu 712
Citi Cards 710
Wells Fargo 709
Bank of America 692
GE Money 683
Target Visa 682
Capital One 678
HSBC 667

Source: 2008 Credit Card Satisfaction Survey [J.D. Power and Associates ]

Do you agree with their results? Leave your thoughts in the comments.

PREVIOUSLY: JD Power Credit Card 2007 Customer Satisfaction Survey (Photo: Tengaport)

From BusinessWeek:

Many consumers say it's about time. The rules were proposed just as the U.S. economy started to tank, when many card holders were falling further behind on their payments at the same time home equity lines of credit were drying up and jobs were disappearing. Regulatory agencies came under fire to act, and Senator Carl Levin (D-Mich.) held hearings this spring to examine card company billing practices.

The proposed regulations generated more than 56,000 comments from individuals, banks, credit unions, and industry associations. That's a record number of submissions, says the Fed, beating the previous record of 45,000 submissions for a proposal that would have let financial firms assume the role of real estate brokers.

BusinessWeek says that since 1996 our nation's credit card debt has doubled to almost $1 trillion dollars. And unpaid credit card bills are growing fast as the economy sours. For their part, the credit card companies are trying to stop the bleeding by raising interest rates on otherwise "good" customers. And those customers have had enough.

Here's how the Federal Reserve describes the proposed reforms:

• Banks would be prohibited from increasing the rate on a pre-existing credit card balance (except under limited circumstances) and must allow the consumer to pay off that balance over a reasonable period of time.
• Banks would be prohibited from applying payments in excess of the minimum in a manner that maximizes interest charges.
• Banks would be required to give consumers the full benefit of discounted promotional rates on credit cards by applying payments in excess of the minimum to any higher-rate balances first, and by providing a grace period for purchases where the consumer is otherwise eligible.
• Banks would be prohibited from imposing interest charges using the "two-cycle" method, which computes interest on balances on days in billing cycles preceding the most recent billing cycle.
• Banks would be required to provide consumers a reasonable amount of time to make payments.

If you'd like to add your comment to the proposal, click here, then scroll down to "Proposals for Comment."

Federal Reserve Proposal Press Release [Federal Reserve]
Credit Card Rage [Business Week]

I went to use my coupon, which was not expired, and was told it was invalid. The cashier said it was probably used already. Since I knew I hadn't used it, I asked them to tell me when/where it was used. They couldn't tell me for sure why it was rejected, just that the computer wouldn't accept it. Long story short, no one at Target nor the credit card company could tell me when I had supposedly already redeemed this particular coupon.

Basically, it was their word against mine and the Target did not have to bear the burden of proof. They simply reject the coupon and I'm out the 10% I would have saved on my purchases for that day. Maybe they should put this in the fine print of their ads to solicit Target credit cards? They always ask if you want to save 10% today by opening up a Target Redcard.

That's how they get you. They just asked if you "wanted" to save 10%. Ha! Get it? Ok, we're just kidding.

Put on your negotiating pants and calmly tell Target that you're going to cancel your account, transfer your balance, and buy everything at Walmart from now on if they don't send you another coupon — one that works.

Here's some contact information for Target's CEO just in case the negotiations don't go well, but we sincerely hope it doesn't come to that.

(Photo: What Rhymes With Nicole )

We found this handy chart on CreditCards.com (a credit card comparison site):

As you can see, you're not automatically covered just because you have a credit card, so make sure you read and understand your credit card's rental car insurance policy. That way you can avoid wasting money on an unfamiliar policy offered by a rental car company.

If you're currently researching credit cards, try CreditCards.com or Bankrate.com to compare offers easily.

Compare credit cards' rental insurance policies [CreditCards.com]
(Photo: Marike79 )

There's a lot of information below, so here is an executive summary:

• Regardless of who the merchant uses to process credit card transactions, merchants that add a surcharge or require a minimum purchase to accept a Visa or MasterCard credit or debit card are violating their merchant agreement, and you should report them to the bank that issued your card.
• American Express does not forbid minimum purchase requirements, but they require parity with the other credit cards, so a minimum purchase requirement just for American Express, but not for Visa, is not allowed. American Express does not allow surcharges, unless they are assessed as a convenience fee...
• Convenience fees are allowable surcharges for specific types of payments, generally to schools and government entities (like taxes or fines).
• Asking for ID is not prohibited, but refusal to show ID cannot, by itself, be a reason for the merchant to halt the transaction.

Does this only apply to credit cards? What about when I use my [Visa, MasterCard, American Express]-branded debit card?

We've mentioned this before, but it's worth repeating: the merchant agreement applies to a consumer who uses a debit card with a major credit card company's logo on it, regardless of whether he signs it or uses a PIN. Note that this is for things like minimum purchases, surcharges, and requests for ID; a credit card often offers additional consumer protections for chargebacks, warranty extensions, and buyers assurance plans.

What's the deal with third-party processors?

After we posted about a McDonald's adding 25¢ to credit/debit card purchases, commenter Corporate Shill wrote in to tell us that many small businesses, like bars, use a third-party credit card processor to offset the expenses of purchasing credit card terminals and accepting different cards:

3rd Party CC Processing Companies offer Merchant Bank services to small businesses that cannot afford to offer CC services to their customers, or to businesses that have been denied CC processing by Merchant Bank.

(In simple legal terms the 3rd Party Companies will act as a straw man between the Merchant Bank and the business that actually accepts the CC from the customer.)

In addition to offering Merchant Bank services the 3rd Party CC Processing Company will often provide the data terminals and supporting equipment at a very low cost or even free to their clients. The data terminals, because they are accessing the 3rd Party network rather than an actual Merchant Bank network, can be programmed to accept an even wider variety of CC's and perform other functions, such as check clearing.

We asked the credit card companies whether a merchant that contracts with a third-party processor still has to adhere to the merchant agreement: MasterCard simply said "Yes," and American Express said that these merchants still sign a contract with the credit card company regardless of how they sign up for card acceptance. Corporate Shill disputes this, saying that using a third-party processor does not require the merchant to sign an agreement with the credit card companies, but the companies, at least American Express, disagree.

Are government and educational entities exempt from these rules? What is the exception for convenience fees?

MasterCard says:

We allow a "convenience" to be charged by certain educational institutions and public sector merchants, including:

• Elementary and secondary schools for tuition and related fees, and school-maintained room and board
• Colleges, universities, professional schools, and junior colleges for tuition and related fees, and school-maintained room and board
• Local, state, and federal courts of law that administer and process court fees, alimony, and child support payments
• Government entities that administer and process local, state, and federal fines
• Local, state, and federal entities that engage in financial administration and taxation
• Government Services; merchants that provide general support services for the government

In addition, a merchant is permitted to charge a fee (such as a bona fide commission, postage, expedited service or convenience fees, and the like) if the fee is imposed on all like transactions regardless of the form of payment used. For example, a merchant that has a website that accepts MasterCard, Visa and direct debit to a checking account as its three forms of payment, may ask for a surcharge IF the fee is applied to all three methods of payment. The same applies to a merchant that has a physical store that accepts cash, checks, MasterCard and Visa. The store can charge a fee as long as the fee is applied to all four methods of payment.

American Express says such fees are only allowed "in very limited industries, for example, taxes."

Can a merchant ask for ID with I pay with a credit card? Can I refuse to show it?

We've addressed this before, too, and it also bears repeating, along with a little elaboration from MasterCard: "However, to be clear, the MasterCard rule does allow merchants to ask for ID. Our rule prohibits the merchant from refusing to perform the transaction solely on the basis of the cardholder refusing to provide the ID. (If the merchant asks for ID and the cardholder refuses, then the merchant can either perform the transaction or call their acquirer for direction.)"

That being said, this isn't going to help you when you're out of cash and the guy at the convenience store won't let you charge that can of Drank. But reporting these violations, to the credit card company, to your issuing bank, and to us (preferably with pictures), will draw enough attention to the merchant that it will, hopefully, change its way.

Here's what VISA says should happen when you present an unsigned card:

1) The merchant will ask for your government ID.
2) You will be asked to sign the card. If you sign it, the signature on the card will be compared to the signature on the government ID. If you refuse, the card will not be accepted.

Here's VISA's official statement on "See ID":

Some customers write “See ID” or “Ask for ID” in the signature panel, thinking that this is a deterrent against fraud or forgery; that is, if their signature is not on the card, a fraudster will not be able to forge it. In reality, criminals don’t take the time to practice signatures: they use cards as quickly as possible after a theft and prior to the accounts being blocked. They are actually counting on you not to look at the back of the card and compare signatures—they may even have access to counterfeit identification with a signature in their own handwriting. “See ID” or “Ask for ID” is not a valid substitute for a signature. The customer must sign the card in your presence, as stated above.

Most merchants don't follow this policy, but some (most notoriously— the U.S. Postal Service), are quite strict.

2) The Maximum Liability For Unauthorized Use Of A Credit Card* Is $50 According To Federal Law
The Fair Credit Billing Act protects you from suffering damages due to unauthorized use of your credit card. If you report a lost or stolen card before anyone uses it, you are not responsible for any charges. If you do not report it before an unauthorized use you are liable for a maximum of $50.

(*Credit cards only. Debit cards and ATM cards are covered under the Electronic Fund Transfer Act, and your liability depends on how quickly you report the loss. Unlike credit cards, debit and ATM cards can have unlimited liability in certain circumstances.)

3) Merchants Cannot Require You To Present ID, Unless Your Card Is Unsigned
Some consumers enjoy it when a clerk asks to see their ID. Others do not. In some states, it's actually illegal for a store to record any additional information (such as an address or drivers license number) as a condition of processing a credit card transaction (unless the address is needed for shipping, of course.) For some reason this is always a hotly debated topic, so we'll go right to VISA for the answer:

Although Visa rules do not preclude merchants from asking for cardholder ID, merchants cannot make an ID a condition of acceptance. Therefore, merchants cannot refuse to complete a purchase transaction because a cardholder refuses to provide ID. Visa believes merchants should not ask for ID as part of their regular card acceptance procedures. Laws in several states also make it illegal for merchants to write a cardholder’s personal information, such as an address or phone number, on a sales receipt.

We think that's pretty clear. Don't want to show your ID? Don't.

4) Merchants Cannot Require A Minimum Transaction Amount
It's a violation of the credit card company's merchant agreement to refuse a transaction because it is below the "minumum."

VISA says:

Imposing minimum or maximum purchase amounts in order to accept a Visa card transaction is a violation of the Visa rules.

Mastercard says:

A Merchant must not require, or indicate that it requires, a minimum or maximum Transaction amount to accept a valid and properly presented Card

5) Merchants Cannot Charge A Surcharge For Using A Credit Card, However, They Can Offer A "Cash Discount"
You may have noticed that gas stations are starting to offer a different, higher price for credit cards. This isn't technically allowed— unless it is marketed as a "cash discount." In other words, if you fill up your car and find that you've been charged more than advertised because you paid with a credit card — that's not allowed. If, however, you decide to pay with cash because you saw an advertised "cash discount" to the "regular price" — that's ok. A subtle distinction, but an important one.

(There is something called a "convenience fee" that some institutions are allowed to charge if they do not typically accept credit cards in their normal course of business. The example VISA gives is a utility company where the customary way is to pay by mail or in person. The rules for charging this fee are somewhat complicated and there are loopholes, etc.)

6) Many Credit Cards Have Programs That Will Automatically Double The Manufacturer's Warranty And Other Excellent Benefits
We get a lot of complaints that can be easily solved by the complainee's credit card company. We've helped readers get laptops replaced out of warranty, and helped them get their money back when Best Buy sold them a box full of bathroom tile instead of a hard drive. Your card may come with extended warranty protection, 90 day accidental damage protection that includes vandalism, rental car insurance, road side assistance, baggage insurance, and return protection. You should be aware of what benefits your credit or debit card offers so that you remember to use them when you need them.

7) Merchants Are Not Allowed To Make You Give Up Your Right To A Chargeback
You might see a receipt that has suspicious-looking waiver stating that you're agreeing to give up your right to issue a chargeback against the merchant for any reason, no matter what, period. These waivers are the result of some crafty entrepreneurs selling sales-receipt paper with the waiver printed on it, claiming that it helps protect the merchant. It's all nonsense and it isn't allowed. If you see it, you should report the merchant.

8) Merchants Are Not Allowed To Place A Hold For The Estimated Tip
Because so many consumers have instant access to their account information, merchants aren't allowed to place an "authorization" for an estimated tip. For example, if you go to dinner and the bill is $100 and you pay with a credit card, the restaurant might be tempted to "authorize" your card for $120—a 20% tip. If you choose to leave a 15% tip and then check your balance — it will appear that you have been overcharged. This apparently results in lots of angry customers, so the practice has been forbidden in VISA's merchant agreement.

9) If Merchants Suspect You Of Fraud They Are Supposed To Call With A "Code 10"
If a merchant is suspicious of you, they are supposed to make a "Code 10" call. They are instructed to take your card, call in, and say “I have a Code 10 authorization request." They will then be asked a series of questions that can be discreetly answered with either yes or no. The merchant bank will then authorize or deny the card. They are not supposed to threaten to call the police or try to detain you. Mastercard says that if the police need to be involved, the "Code 10" operator will call the police while the clerk waits on hold.

10) If Merchants Break These Rules, You Can Report Them To The Credit Card Company
Here's Mastercard's Merchant Violation form. To report merchant violations to VISA, they ask that you report them to the financial institution that issued you your Visa card. You should be able to find the number your on Visa statement or on the back of your card.

(Photo: Maulleigh)

Dear Consumerist,

Unfortunately, this blog did not exist when I was 21 and trying to make it through college. I was poor, and the fed was stingy with the financial aid. So, I turned to credit cards and it is the biggest regret that I have. Debt collectors call daily, and I know just by the look of the envelope if there's a collection notice in the mail. Thankfully I have a place to live and a car that runs fine, so I feel as though I don't need a good credit score (but I'm sure it would help in the future).

Lately I've been getting pre-approved credit card offers in the mail, but they're of the type that already have a $200 balance on them before you even get them. I've already had enough trouble with credit cards, so I immediately throw out these offers. Today I got what looked like another one of these, but after reading the notice it turns out that it's not quite the same.

The offer I received today is from one of the companies that bought one of my debts. There is a picture of the offer on my flickr account here. In this offer, they tell me that I can have my debt placed on a Visa card and pay off the card. The interest on the card is 19.9% and there is an annual fee of $35 which is waived for the first year. I have such bad credit that I don't worry about identity theft, so these terms are better than anything I've seen in quite some time.

So, I'm just wondering if this is a good idea. The notice says that I have until July 7th to accept this, so I'm in a bit of a rush to find out if it's worth it. If so, I think the first (and only) place this card would go is into a block of ice.

Thank you!
Ryan

It may seem like an attractive offer on the surface, your debt of $1,364 gets reduced to $1,200 if you accept the card. But this difference will most certainly be mitigated by fees and interest that this card has cleverly implemented. This particular credit card is probably one of the worst credit cards ever, it is riddled with booby-traps designed to hit you with fee after fee. Here are some of the pitfalls you should be aware of:

• Simply by submitting the application for the credit card, you will temporarily get 3-5 points subtracted from your credit score, but this is true with any credit card.
• According to the terms, your first minimum payment is $37 which is due 20 days after you receive your statement. If you don't pay in time there is a $19 late fee.
• This card is designed to make you spend over your credit limit. Your balance starts at $1,220 and the credit limit is $1,270. Considering your interest would be about $20 dollars a month at 19.9%, a small purchase could easily put you over your limit, incurring an additional $19 fee.
• According to the terms, if you miss a payment in the first 3 billing cycles, the card will be revoked and your original debt of $1,364 will be reinstated even if you have paid off some of the balance already.
• Default rate - We haven't seen this card's full terms and conditions but typically if you violate one of the conditions in the agreement such as late payment, NSF check or charging over your limit, your interest rate could be jacked up to as high as 36%. This is true with any card.

Naturally, paying off your debt is the best idea, short of that, this card is nothing to mess around with. They are just trying lure you with a shiny piece of plastic so they can get their hooks in deeper. The only way a card like this would be useful is if you made a large payment on it every month. Of course, if that were possible, you probably wouldn't be in debt in the first place.

If you need assistance paying your debt, each state has non-profit angencies that can assist you, usually for a small fee. In many cases, they can sit down with you and help you work out a monthly payment plan without any nasty 19.9% interest rate. Some websites that can provide you with more information are:

http://www.nfcc.org

http://www.cccsatl.org

http://www.aiccca.org

http://www.creditcounseling.org

One other tactic involves trying to cut a deal with the debt collector. They pretty much assume they won't be getting all of their money so they are often agreeable to reducing your balance if it gets paid within a certain amount of time. However, not all debt collectors operate in this way. Good luck, Ryan.

(Photo: Getty)

As we've previously suggested, Brandon reported the violation to Mastercard and Visa, as well as to McDonald's headquarters. To reiterate: most credit card companies' merchant agreements forbid merchants from requiring a minimum charge to pay with a credit card, asking for ID when you pay with a credit card, or adding a surcharge for paying with a credit card (merchants are usually allowed to give a discount for paying cash, however, if it's clearly labeled as such), and we encourage readers to report violations directly to the credit card company using the info here.

Now Yechial wants to know, are BP stations simply charging more to negate the 5% rebate on the Chase BP card, or are they really dealing with higher fees on their end? This L.A. Times article published last week says it's the second reason—which means any rebate your credit card promises you on gas purchases is going to be inherently less valuable so long as expenses keep rising for station owners.

From the L.A. Times article:

Gas retailers are being hurt by several forces, including lower sales, higher credit card fees and fuel expenses, that are directly tied to this year's dramatic rise in the price of oil.

In Van der Valk's case, fuel sales have fallen as much as 10% as customers cut back on driving. The lost volume means fewer customers flow through the convenience store to buy coffee, sodas and other money-making items.

With each price increase, more people use credit cards to buy gas, taking a bigger bite out of station profits. A dealer typically pays a 10-cent transaction fee plus 2% to 2.5% of the total fuel sale for each customer.

Yechial writes, "I have told my wife to no longer use BP gas stations, and we are canceling the BP credit card." It's probably not the station owner's fault he's having to charge more, but we agree that if the only reason you got the BP card was for the gas purchase rebate, you got a bum deal. (But so did the station owner.)

"Soaring costs are squeezing gas station owners too" [Los Angeles Times]
(Photo: Yogi)

This afternoon I visited the Kohl's store in Moline, Illinois. When I was checking out I elected to pay with my Visa card. After sliding my card through the card reader I signed the screen when prompted. My cashier asked to see the card, which I handed over to her. She handed my card back to me and then asked to see my identification, to which I respectfully declined. She said I had to show my ID or I could not leave the store with my purchases...

I explained to her that customers using Visa credit cards do not have to show identification as a condition of purchase as long as the back of the card is signed (mine is) and to compel them to do so is a violation of the store's agreement with the credit card company.

She flatly denied that this was true and again asked for my ID. It was at this point I realized I was dealing with someone who through her persistent need to argue with me has no interest in customer service and told her I was not going to show her my ID and demanded she void the transaction. I told her I did not need to give Kohl's my money if they were going to argue with me about something which I know to be fact.

I found her request especially odd since she took my Visa card, handed it back, and then asked for my ID. What was she going to do with the information on my ID?

I thought I would bring this matter to your attention. Perhaps the management team at the Moline store need to be brought up to speed on merchant's agreements with credit card companies.

If there are questions about this matter, I direct you and the Moline store's management to please see page 29 "Rules For VISA Merchants."

Therein you will find:

"Although Visa rules do not preclude merchants from asking for cardholder ID, merchants cannot make an ID a condition of acceptance. Therefore, merchants cannot refuse to complete a purchase transaction because a cardholder refuses to provide ID. Visa believes merchants should not ask for ID as part of their regular card acceptance procedures. Laws in several states also make it illegal for merchants to write a cardholder’s personal information, such as an address or phone number, on a sales receipt."

Afterwards, I went to the Target store next door and made a similar purchase with my Visa card and did not have to surrender my personal identification to do so. After that I visited Best Buy, a local grocer, and another department store and not one of them batted an eye at my Visa card or asked for my ID.

So, please, enlighten me: what is going on at Kohl's where a customer is treated in such a manner?

In these days of rampant identity theft I find it unreasonable beyond belief that a small, simple purchase in a department store warrants me handing over my "government papers" to a retail cashier when it clearly is not necessary.

Your former customer.

Asking for identification is a one-way street, and you are the traffic cop. Let's review:

• Good: Stores accepting your credit card without requesting identification.
• Good: Writing "Ask for ID" on the back of your credit card, allowing merchants to request identification.
• BAD: Stores demanding identification as a condition of using your credit card.

See the difference? You have the power. If you don't want to show identification, don't. Nothing a store says or does can make you provide identification.

Straighten out ill-trained merchants by reporting them. Here's how to contact Visa:

Visa
Phone Number: 1-800-VISA-911 (International: 1-410-581-9994). Or call the number on the back of your card
Mailing Address:
Visa U.S.A. Inc.
P.O. Box 194607
San Francisco, California 94119-4607
Online: Your card issuer's website may let you send them complaints about merchant violations and start a dispute if your were charged a fee to use your card.

Visa will fire off a stern letter to the store in question, and your next shopping experience should be hassle-free.

PREVIOUSLY: Writing "Ask For ID" On Your Credit Card Won't Stop Fraud, But It's Still A Good Idea
How To Report Merchants For Requiring A Minimum Purchase Or Making You Show ID
(Photo: Getty)

I went to IHOP(INTERNATIONAL HOUSE OF PANCAKES) on March 30th with my wife to eat. After our meal I went to the counter to pay and presented my Visa as payment. I was asked for photo ID, and kindly declined. I was then told that they were not going to be able to accept my card without photo ID.

I then offered my MasterCard(so that I could later fill out a complaint) and was also told a photo ID would be required. I then explained that I had no other form of payment, that it was against both Visa & MasterCard's merchant rules. I was then directed to the manager, who I politely explained to that if he expected to be paid for the meal he offered me, he had the choice of accepting and honoring my card, or not getting paid.

At this point the manager called the police and was attempting to have me arrested for Dine-and-Dash, even though I was the one trying in good faith to present payment, and they were the one's refusing, based on a 'store policy' that was in a direct breach of contract, their merchant agreement. My wife then showed her Visa(same account number) and her ID, and was fully embarrassed and outraged that they were trying to have me arrested because THEY refused to accept payment. I found this completely unacceptable, I called their Corporate Headquarters in Glendale, California, as did my wife, and filed complaints. We were told a Field Rep for the area would call us, but none ever did. I'd plan on going back there with just my card and no ID and let the police come, but as a matter of principal I can simply not got back there after something like that.

— Jered,

MasterCard Merchant Manual (PDF) [MC]

This last evening I was hungry and decided that I wanted Jack In the Box. So I went to the Manhattan Beach, CA store on Sepulveda Ave. When I pulled up and was beginning to determine what I wanted for dinner I noticed a sign on the order board. It stated that in order to use a credit card it required a 30 dollar purchase, ID and a signature. While I have seen minimum payment requirements before at various liquor stores and restaurants I have never seen one so high especially for a drive thru window...

I did ask if they accepted debit cards which I was told no. Since I did not have any cash I left and went to another fast food drive-thru that did accept my debit card without a minimum purchase or other requirements. I have read many posts on your website regarding this and the many responses from your readers. I did not make a fuss or a scene, I simply drove past their window without making an order as I did not feel that store wanted my business. I did send a complaint to the corporate office of Jack In the Box as well regarding the violation of the merchant agreements. While reporting them to VISA may do nothing I felt that your readers should know that some franchisees are getting a but silly with their credit card use requirements.

As a follow up, I reported to the corporate office, VISA, and my bank. I heard nothing from Jack in the Box, VISA gave me their rules on what is not allowed, and Wells Fargo stated that merchants can set minimum purchase prices. I replied back to my bank with the answer I received from VISA. I have not yet heard back from my bank since that initial response. ... I just got off the phone with Jack in the Box corporate customer care. The guy on the phone was nice enough, however he was not aware of the VISA merchant agreements either. He did state that the particular restaurant has had some cc fraud issues recently. But this shouldn't cause users to be imposed with 30 dollar minimum purchases. He asked if I was able to be able to make a purchase using alternative means, so I stated that I did not have cash and did not return. He did offer to send out a coupon for some free Jack In the Box good at any of their restaurants.

The relevant section reads:

Always honor valid Visa cards in your acceptance category, regardless of the dollar amount of the purchase. Imposing minimum or maximum purchase amounts in order to accept a Visa card transaction is a violation of the Visa rules.

Recently, my husband and I got two new Chase credit cards in the mail. I didn't look closely, assuming that this was a new card for our never-used Chase Mastercard account. This account has been around for seven years, but we prefer another card with a rewards system; the Mastercard account is open only to benefit our credit rating. Therefore, no urgency in activating it — I dropped it in the bill pile to deal with later.

Completely unrelated, I decided the next day that it was a nice time to pull my yearly free credit report. Everything was as it should have been, except an old Visa BankOne account which I had from early 2003 to mid 2004 was not listed as closed. Curious, I called the customer service number from the last bill and found that it did seem to be active — thankfully, with a zero balance on the card. The weird part was that it wouldn't accept my old billing zip code, but was quite happy with my current address; since we moved here only a few months ago, I am positive I never told the credit card company the new address when I was canceling many years ago.

I spoke to the cancellation department, who persistently tried to sell me on the advantages of keeping this account open while her computer "processed the request" to close the account. After three minutes of protesting this account should have been closed years ago, I gave up and let her chatter, grunting every now and then so she wouldn't think I'd hung up.
"My goodness, this account has been open five years and has always been in good standing. That's great for your credit report!" (It should have been closed years ago!)
"We can offer you a very low APR, which is great if you carry a balance!" (You mean that four-year-old $0 balance?)
"You can add a reward system to this card, and get free gas or airline miles!" (urrrrrg....)
"If you ever want to reopen this account, you'll have to go through the approval process all over!" (Whatever.)
After a couple minutes of grunting, she confirmed the account was closed. I hung up and went on my merry way.

At this point, I thought this was just some quirk that had happened in 2004 — either I had not closed the account as I remembered, or a computer glitch had left it open. But, the next day as I sorted through the bill pile, I looked more closely at the two Chase cards we'd received. They were in fact Visa, not Mastercard, and matched the account number I had just closed. Chase had sent me two cards for an account that they acquired from BankOne, found my new mailing address, and reopened the account without my knowledge or permission.

The cards are cut up and the account is closed with Chase. I feel abused, though; I would have been a hell of a lot angrier on the call to close the account if I had known the entire situation. We don't really want to cancel our other, seven-year-old, Chase account, since it's good for the credit rating and all; so unfortunately, the only way I can "punish" them for doing this is continue to not use the old Mastercard account, thereby not giving them any merchant fees.

-Erica

Later, at a staff meeting...

Chase Boi 1: Hey what are we going to do with all these dead credit card accounts we just bought?
Chase Boi 2:I know, let's turn 'em back on and send 'em new cards. Some people will use them and we'll make money off the fees.
Chase Boi 1: If anyone complains, we'll pour sugar in their ears about how great the card is and if they really really push, we'll just close it down!
Chase Boi 2: Brilliant!

It's always important to be mindful and attentive when new credit cards are sent to you in the mail unexpectedly. Also, check your credit report for errors, like accounts you thought were closed, and follow up on any inconsistencies. Annualcreditreport.com is the place to go to get a copy of your credit report for free, once a year, with all the three credit bureaus.

If you don't use your Juniper iTunes Rewards VISA (issued by Barclay's) for an entire year, they close the card and report to the credit agencies that you requested to close it. I've learned that when I called to inquire about a lower rate on 2/26, the agent canceled my account.

I called the main 800 back and was told that I had indeed requested the account be closed when a lower APR was not available. I firmly but politely insisted that I did not request to close my credit card. The CSR then told me that if I used "that kind of language" she would have to disconnect me. I then asked her what we could do to fix the situation. She placed me on hold and I was disconnected.

I called back and after explaining the situation to the 2nd CSR, she became very curt and informed me that the notes on my account said that "words had been exchanged." —--? I apologized and asked if I could reactive my account without a hit on my credit. I was placed on hold and disconnected.

After calling back a third time, I was told that my account was active and the CSR had no record of it being deactivated.

I faxed a complaint to BBB of Delaware, the state agency that regulates banks in Delaware, and a couple fax numbers I found on Google.

One afternoon, I received a call on my cell phone with "unavailable" appearing on the Caller-id. Ordinarily, I might have just ignored it, but I answered the call and an electronic voice informed me that it was Chase Fraud Services calling about unusual activity on my account—the call continued as follows:

Recording:

Chase: Hello, this is Chase Fraud Services with an urgent call regarding your Chase Credit Card. We have determined there may be fraudulent activity on your account. Please take a moment to confirm recent purchases. Please press one to continue:

Me: One

Chase: Did you make a purchase on (yesterday's date—they waited one day to call me) in the amount of $14.95 at [redacted—internet site]?

Press one for yes or two for no.

Me: Two

Chase: Let me confirm, you did not make a purchase yesterday in the amount of $14.95 at [redacted—internet site]?

Silence...

Chase: Did you make a purchase on (yesterday's date) in the amount of $39.95 at (an Internet Data broker—for what I later found out was a background report on me)

Chase: Press one for yes and two for no.

Me: Two

Chase: Please hold for a representative.

[Five minute hold time in order to speak to a fraud representative.]

Chase: Sir, before we proceed with this call, I need to verify your identity. What are the last 4 digits...?

Me: Excuse me, but I refuse to provide you with any personal information. I did not initiate this call and I have no proof you are who you say you are. And for all I know, this could be a" phishing" scam.

[What in the world is Chase thinking by calling customers asking them to identify themselves? It's no wonder people fall prey to phishing scams.]

Chase: Sir, this is not a phishing scam, this is Chase.

Me: Well, that's reassuring.

Chase: Sir, do you have your Toys-R-us Master Card in your possession?

Me: Not on me, but it is at home.

Chase: So you are confirming that you received it?

Me: Wait a second, this is a phishing scam! I have a Toys-R-us VISA and not a MasterCard. Besides, my card doesn't expire anytime soon, so why are you asking if I received it?

Chase: Sir, I am going to suspend this account, and place a fraud alert on your credit report. Please do not use your card; we will replace it with a new account number.

Me: Wait a second, what the hell are you talking about? I haven't used my card in months. It doesn't expire, and it's a Visa, not a MasterCard! Please explain what's going on here.

Chase: Sir, we sent you a new card about a month ago.

Me: Why did you do that when it doesn't expire anytime soon?

Chase: We had a branding change. The store signed on with MasterCard and as a result, we sent you a new card with a new account number.

Me: And is there a reason why you guys didn't bother to notify me to expect a new card in the mail?

Chase: Sir, we have millions of customers, we couldn't possibly notify every customer each time we send out a new or renewal card.

Me: Why is that? I signed up for Chase alerts, electronic statements and electronic notifications—it doesn't cost you anything to email a customer.

Chase: Sir, I don't make the rules.

Me: This is just outrageous. I don't want yet a third account number generated. Please do not send me a new card. Just close the account.

Chase: Sorry sir, I cannot do that.

Me: What do you mean you cannot do that?

Chase: Sir, when we suspend an account for fraudulent activity, the system automatically generates a new account number. So there is nothing I can do. You will receive a letter from Chase, please sign and have it notarized and return it or you will be held responsible for the unauthorized charges.

Me: Wait a second, something doesn't make sense. How did anyone manage to use the new card
if it requires activation from my home phone number?

Chase: That is a good question. Hold on a moment.

Chase: Sir, it was not activated. And rest assured that all these charges were declined as a result.

Me: Excuse me, but if they were declined, then why are you sending me a letter to be notarized?

Chase: Sir, it's a procedure we must follow under these circumstances.

Still thinking that this bizarre conversation was a phishing experiment, I logged on to Chase online and confirmed that my available credit was reduced to zero on this account. The call was legit, after all! What we have here is a perfect storm of coincidences that led to this incident and if you think ID theft cannot happen to you, think again. The credit card was not stolen. It was not intercepted in the mailing process. It turns out that a careless Postal Service letter carrier delivered it to the wrong address, directly into the hands of a professional ID thief.

Without missing a beat, that person managed to use the card on the Internet for a small purchase at [redacted—internet site] presumably to see if it works, and then proceeded to use the card to pay for a background check on me at two data brokers. The Chase fraud representative lied—Chase did not, in fact, decline these charges.

In an attempt to find out who used my card, I called each merchant and I was informed that they are unable to give me any information because they could ultimately be held liable if I went after that person. I later found out they live in my zip code and through other sources, their name and address. (all three merchants agreed to immediately reverse the charges—something I asked them not to do, because I wanted Chase to investigate this).

I learned that the magnetic strip on the back of the credit card remains deactivated until a phone call is made to activate it. However the account number itself, will work if it is used online. [ed. The magnetic strip is just a dumb magnet. The "activation" occurs within the electronic credit card systems, not within the card itself]

I consider myself a savvy consumer having put in place measures to prevent this from ever happening in the first place:
1) I signed up for a credit report monitoring service that emails me whenever there is new or unusual spending activity.
2) I routinely shred all documents containing personal information.
3) I opted out at the DMA website and subscribed to Catalog Choice to eliminate junk mail.
4) I signed up for electronic statements to prevent misdirected mail
5) I routinely monitor my FICO score.
6) I signed up for credit card alerts sent to my BlackBerry.
7) I pay all my bills using Internet banking instead of sending checks in the mail.

Following this incident, I had to take additional measures to protect myself by placing a credit freeze on my credit report at all three credit bureaus as I learned that the "fraud alert" Chase placed for me is not foolproof. Apparently, if someone applies for credit electronically, the computer does not recognize the alert. (one reason why "Life lock" is a bunch of BS) Additionally, I went to www.optoutprescreen.com to opt out of pre-approved offers for credit and insurance and filed a report with the postal inspector regarding this incident. I also just learned that at least one bank will allow you to pick up renewal cards at a branch, instead of having it mailed to your home.
[Consumerist editors - you may want to use the following for an additional article—although it is related to this incident, it bears a separate warning:]

Do you frequently get a letter in your mailbox addressed to a neighbor? Or, perhaps, addressed to someone living down the block? Did it ever occur to you that if you are receiving that letter addressed to someone else, perhaps they are receiving your mail?

You may not be aware that the postal service has a regular carrier working your route on a five day work week. As mail is delivered six days a week, that means one day each week (usually on a Tuesday) a substitute carrier delivers your mail and they rarely know the route. These subs are not the most accurate to begin with and the postal service rarely keeps them on a regular schedule. So you can be sure that once a week mail will be delivered to the wrong address.

That is generally not a problem when all your neighbors are honest people. But, find someone who just happens to be in foreclosure or is about to be evicted and you may find yourself in my situation.With shoddy mail service, the banks are effectively playing Russian roulette with your account and personal information when they bombard you with balance transfer checks and unsolicited cards at random.

That quote is absolutely wrong. I worked for [redacted] for 3 years as their Merchant Fraud Control Analyst, and now I work for a retail company handling all chargeback situations. Basically, if someone disputes a charge for any reason then I'm the person the bank/Amex gets in touch with. My point is, look at the attachment this is what a retailer gets in fraud case from Amex (for MC and Visa its not much different). No where does it say proof of ID...and how the heck would one send video in the allotted time anyway? Just thought you guys would like a copy of the real thing.

Again we waited, and on the 20th of December, we contacted Visa to have the complete amount refunded rather than still wait for the second giftcard to appear. The representative on the phone was not only unhelpful, but also acted as if we weren't entitled to a refund. We spoke to a supervisor who assured us we would receive a full refund within 7 to 10 business days.

On December 28th received an envelope that was sent priority overnight with a Postage Date of December 24th, in it was the 2nd giftcard. We contacted Visa customer support on January 3rd, and again on January 15th, each time contacting a supervisor and being assured we would receive a refund. We have the 2nd giftcard, but I'm against using it.

Ideally I'd like to receive a full refund, as I don't want Visa getting the fee from purchasing the card, and I'd like to avoid the credit fee paid by the merchant. Is there any way I can get this resolved or do I have to swallow my pride and just use the card?

Unless the fee Visa charged you was significant enough to cause you financial hardship, you might want to consider letting this one go. Your time is worth something. In the future, don't give Visa your business. (We don't recommend those "credit card" gift cards anyway.)

Maybe you could just tell a few hundred thousand of your closest friends how Visa treated you? We hear there are some websites out there that could help you out with that...

Wal-Mart MoneyCard Cardholder Agreement [via J-walk blog]

UPDATE: VISA Won't Replace Dusty PS3 After All

For those of you who are not familiar, many credit cards carry a benefit that doubles your manufacturer's warranty and helps you out of these sorts of sticky situations. When last we saw Reid, he was battling Sony Computer Entertainment for warranty repair because his system was having trouble reading discs. He lost, and Sony shipped the unit back to him. For the record, Reid says that the PS3 arrived much dustier than when he originally sent it. Not knowing what else to do, he bought a dust buster and cleaned the unit up, determined to fix it himself. Then he tried upgrading the PS3's firmware and the system completely bricked.

Thankfully, his Visa has extended warranty coverage and he'll be getting a new PS3.

Reid writes:

I just got off the phone with Visa for the third time and they are sending me a claim form to start the repair/replacement process of my system.

They at first said that they would need to attempt to have it repaired in my local video game repair shop, but I let them know that i had already contacted them and the firmware in combination with the blu-ray lens made it impossible to repair economically and it would have to be replaced. They said as long as I had a repair receipt stating that it wasn't economical to repair, I could walk into a Best Buy, charge a new PS3 to my credit card and they would credit that charge.

Thanks A LOT, for all your help, you guys have more helpful than i would ever imagine. Lets just hope I never need to email you guys again shall we?

Thanks again,

Reid

PS, This was possible because (some?) Visa Signature cards carry a "warranty manager" feature that effectively doubles the warranty on any product purchased on the card up to one year. Because the problem that bricked the system occurred after I was legally out of warranty, Visa is taking care of it. Again, I can't thank you guys enough, you really put the power in the customers hands in an industry where its customers are generally ignored due to their demographic. I owe you guys.

If you buy a lot of expensive electronics, make sure your card has extended warranty protection. In fact, we reminded a reader yesterday that his broken out-of-warranty TV was probably covered by his MasterCard. It was!

We love happy endings.

PREVIOUSLY: Dust Voids PS3 Warranty
Sony CSR: What? No! Dust Doesn't Void Your PS3 Warranty!
Is This Playstation 3 Too Dusty To Be Repaired Under Warranty?
TV Breaks Right After The Warranty Expired? Call Your Credit Card Company

Instead of an expected, "we apologize for the confusion and we'll look into it", we received a lecture on how the PASSENGERS are usually wrong in cases like this and that we should just go home. If we were completely spineless we might have listened but after bringing in three more Continental attendants to assist, all of whom looked at the same 'holy computer' and stated that my wife needed a Visa, we were moved to a supervisor's counter and the process of deciphering the 'Countries Requiring/Not Requiring Visa' list took another 20 minutes. (I think a list of known UN countries in alphabetical order is probably less than 300 so a quick scan in my book would take about 20 seconds). After some quiet side conversations where we overheard the discussion about the "Democratic People Republic of Korea" (NK) and the "Republic of Korea" (SK) I reminded the Continental rep not to confuse North and South Korea (again). I (again) was told to 'tone it down'. After about another five minutes we were handed our passports back with two boarding passes without a word - no apology, no 'enjoy your flight'. To add to the wonder of it all, Continental dedicates an entire section of check-in counters for travel to tourist destinations in the Caribbean at Newark's Terminal C. Why they also don't dedicate employees with a passing knowledge of countries in the world for their INTERNATIONAL check in agents is beyond me. I guess that's asking for too much behind courtesy and professionalism for their front-facing customer service reps. Ted

(Photo:Google Maps)