Nearly 50 million Americans had their credit limits cut or saw their card accounts closed involuntarily within the past 30 days as reported by the Lending Tree’s Compare Cards website.
Lenders are hoping to mitigate losses during a floundering economy. However, they aren’t required to inform customers when their credit limits were cut. The move comes in a dire time as Americans across the country are strapped to meet monthly payments as unemployment soars. It’s believed that credit use has increased while households struggle to adapt to job-losses attributed to the COVID-19 pandemic. The Lending Tree report shows 42% of card owners use their card the same amount, and 3 in 10 of cardholders use it more in April in comparison to this time a year ago.
Key takeaways from the report show:
- Men are 37% more likely to see their limits cut compared to 12% of women.
- 37% of Gen Z, 36% of millennials, and 35% of Gen X cardholders reported they were affected. 8% of baby boomers have reported limit cuts.
Many Americans were dealing with crushing credit card debt before the pandemic. The total nationwide credit card debit is nearly $1.1 trillion. Payment delinquencies were already the highest in 7 years. Now credit cards are being used to bridge the gap between final paychecks and unemployment checks. Americans holding out for the next wave of stimulus checks or small businesses waiting on PPP loans are also more likely to rely on personal credit cards.
In a report by CBS, LendingTree analyst Matt Schulz advised that borrowers should take the chance and ask card issuers to reconsider credit limits even if the odds are low. He also suggested that dormant credit cards are most likely targeted for limit cuts. Small recurring payments like Netflix subscriptions can be moved to those dormant cards, freeing up limits on more active credit cards. As months of uncertainty lie ahead, holders should keep credit in perspective and it’s more important to prioritize keeping food on the table rather than protecting a credit score.
Is the convenience of payment apps worth the risk of fraud?
(FINANCE) Peer-to-peer payment apps like CashApp and Venmo are quick and convenient – for users and scammers alike. What are Square and PayPal doing to help?
More and more people are using peer-to-peer payment services, like Square’s Cash App and PayPal’s Venmo, to make purchases, handle their banking, or just to pitch in on the pizza you and your friends had delivered last night. These payment apps have been particularly useful for folks who may not be able to afford bank fees or have other barriers preventing them from accessing a bank account.
That’s because they are very easy to set up, requiring nothing more than an email address or phone number. Even folks with bank accounts are using these payment apps more as folks are trying to stay home and reduce their in-person contacts during the COVID-19 pandemic. The number of daily users on Venmo has grown 26% since last year.
While these apps bring a lot of convenience to our lives, they have also made running scams more convenient for cybercriminals. According to experts, the rate of fraud on Venmo and Cash App is three to four times higher than with credit or debit cards. While PayPal and Square don’t provide statistics about scams, there are some telling signs. The New York Times and Apptopia, a mobile services tracking firm, found that the number of users mentioning frauds or scams in Venmo customer reviews had increased by four times in the past year.
It seems that Cash App has the most fraudulent activity, with the Better Business Bureau reporting twice as many complaints about Cash App as Venmo, even though Venmo has more users. Zelle has a better track record when it comes to fraud, most likely because it requires a more thorough authentication process when setting up an account. It also has better legal protections for folks who have been scammed.
Some of the things that make these payment apps so quick and easy are exactly the reasons it’s so easy to scam users. The instantaneous payments mean that there’s not much of a vetting process, and not much time to catch a fraudulent transaction before it’s too late. Because you only need an email address or phone number to set up an account, it’s easy for criminals to set up dummy accounts for running scams.
Other scams have been facilitated by the marketing choices of the companies. For example, Cash App regularly runs a Cash App Friday promotion, in which users are rewarded for sharing their username, or $Cashtag, on social media. Unfortunately, this has essentially created a Rolodex of potential victims for criminals.
Square and PayPal are doing what they can to address the problem. Lena Anderson of Square says that they are “aware that there has been a recent rise in scammers trying to take advantage of customers using financial products, including Cash App. We’ve taken a number of proactive steps and made it our top priority.”
One “proactive step” Square has taken is to roll out a customer service phoneline, not only to make it faster and easier for customers to vet potentially fraudulent transactions or report scams, but also because scammers have been creating fake customer service phonelines to target users and collect their personal information. The phoneline is currently available to only some customers, but Square plans to scale it up to be available for all users over time.
Until these companies come up with more robust security systems, there are several things you can do to avoid scams. While you might get a cash bonus from Cash App, it’s probably not worth it to share your $Cashtag on social media. Only share your username with people you know. Never share your personal or banking information with strangers. Examine all transactions carefully. Some scammers are stealing money by making a payment request from an account that looks legitimate, but may have a slightly different spelling or one-letter change in the name.
No legitimate agents of these services should ever ask you for your sign-in code, or to download software, and you shouldn’t click on any links in messages promising cash prizes. Never send small payments in exchange for a promised reward – if it sounds too good to be true, it’s probably a scam. Don’t use digital payment apps to pay for or receive payment from sales on Craigslist, Offer Up, or Facebook Marketplace.
If you think you’ve been scammed, changed your PIN number immediately and contact the company and/or the FTC.
Curbside pickup’s popularity shows we still like to go SOMEWHERE sometimes
(BUSINESS FINANCE) Online sales are soaring, but it’s not all delivery – the convenience of curbside pickup is widely enjoyed, even if only to drive somewhere.
The COVID-19 pandemic has undeniably altered how customers shop. Not wanting to step inside a store, most people are turning to the internet to purchase the things they need or want. I know I’ve seen more packages on my and my neighbors’ doorsteps this year alone than I have in the past few years combined.
In the first half of 2020, more than 10 million new guests shopped at Target.com. In Q2, Walmart’s U.S. e-commerce sales rose 97%. So, there isn’t a doubt that retailers have seen their online sales skyrocket. However, they have seen a decrease in the number of people shuffling through their doors. More people are hesitant to shop in-store due to health concerns, but this doesn’t necessarily mean they don’t want to venture outside their front porch.
Many customers are not inside a physical store, but a lot of them are right outside on the curb. Curbside pickup has risen in popularity. According to a New York Times article, as of August, three-fourths of the top 50 store-based retailers in the United States are offering curbside pickup. And, curbside is bringing in just as many sales as online ordering.
Walmart was one of the first chains to jump on the curbside pickup bandwagon. In May, Walmart executives reported that four-times more customers tried curbside for the first time. To keep up with what customers wanted, the company expanded its available products to more than 160,000 items, and items can be ready within four hours, as long as the time slot is available.
In August, Target reported that they saw the fastest growth in sales with their pickup service, Drive Up. Sales grew more than 700 percent. To meet the needs of customers, Target increased the number of parking spaces reserved for pickup, and it added fresh and frozen groceries to their service.
Curbside pickup services for most retailers are quite similar. You can order online or through the store’s app. Depending on what notifications you opted for, you will get an email or text to let you know when your order is ready. Once you’re at the store, an employee will place your order in your trunk or backseat.
I started using curbside pickup when everything closed down, and I don’t plan on going back to my old shopping habits anytime soon. For retailers, curbside helps cut expensive delivery costs that come hand in hand with online orders. For customers, curbside pickup not only lets you get your items quicker, but it allows you for a change of pace. Instead of a pile of packages on your doorstep, you can jump in your car. You can drive to the store to get your order with the added convenience of having someone else do all the shopping for you.
H&M hit with $41 million dollar fine for breaching employee privacy
(BUSINESS FINANCE) Employees’ data privacy has been breached by the fast-fashion giant, invading personal lives by sharing confidential notes around management.
Swedish fast-fashion chain H&M has recently been fined more than $41 million (35.2 million Euros) for allegedly breaching privacy and tracking the personal lives of their employees on a company database.
The data includes but is not limited to: Workers’ illnesses, religious beliefs, family problems, and vacations. The notes, which were used to evaluate employees’ performances, were often based on workplace meetings and one-on-one conversations. The data collected was intimate, possibly confidential, and very much not meant to be seen and analyzed by others.
As many as 50 other managers were able to view the notes of each employee. Managers at H&M’s Nuremberg customer service center began these practices in 2014, at the very latest.
Regulators are calling H&M’s practices a “particularly intensive interference” with employees’ rights, while Johannes Caspar – the data protection commissioner – called the scandal a “serious disregard” to workers’ data privacy.
Regarding the scale and severity of the breach, Caspar also commented: “The qualitative and quantitative extent of the employee data accessible to the entire management level of the company shows a comprehensive research of the employees, which is without comparison in recent years.”
We live in a world where data is the most coveted commodity. Utilizing employees’ extensive personal details for company gain is morally compromising, as it allows for workers to be manipulated for profit. The situation H&M created has left their employees vulnerable, to say the least.
H&M has commented on the accusations, stating that these practices are “not in line with H&M’s guidelines and instructions”. All in all, the company seems to be cooperating with the investigation. Though they are not able to fully comment on the accusations at this time as the incident is still under legal examination, H&M has stated that they are offering financial compensation to those employees who were at Nuremberg for at least a month since May 2018. They have also stated that they have taken several steps to protect their workers’ data privacy from here on out.
Let’s hope that this multi-million-dollar fine sets a precedence for the rest of the industry – organized data collection and negligence at this scale will not be tolerated.
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