Tuesday, January 18, 2011

Alabama Securities Commission

It was a pleasure to listen to Joseph P. Borg, Director of the Alabama Securities Commission (ASC), speak at a luncheon meeting earlier today. Various investment fraud examples were discussed as well as a need for general investor educational resources. The current economic environment is almost a perfect storm for fraudsters. You have very low yields on traditional investments so investors are looking to earn a higher yield on their liquid cash. The volatile markets of real estate, rising oil prices, and rising gold prices have also created opportunities for investment fraud in these areas. This does not mean that investments in these areas are a bad choice, just that scammers use the headlines to sell legitimacy and to gain trust.

Investments that offer very high yields should always be reviewed and researched very closely. How many times have we heard "if it sounds too good to be true, it probably is". One of the fraud examples given during the presentation offered investors a doubling of their investment within 18 months. This simply is not realistic and sure enough the investors lost all of their investment dollars. Do not allow the lure of a high yield prospect to cloud good financial judgement.

The ASC website has valuable resources, investor alerts, and links to help educate investors in making a sound financial investment. Here is their website - http://www.asc.state.al.us/index.htm . Check it out!

Friday, January 7, 2011

Electronic Pickpocketing

A few members have contacted the credit union about national news media stories on the issue of "electronic pickpocketing" and concerns over data theft. For those who have not heard about electronic pickpocketing, it is basically theft of data from a plastic card that possesses a RFID (radio frequency identification) chip. The RFID chip sends out a short wave radio signal so that merchant readers can receive the signal and authorize transactions on the card without the need for a physical swipe of the card. Scammers have realized that a cheap portable card reader could be used to obtain someones card information while the card is still secured in the person's wallet or purse. In a crowded mall or shopping area, someone could be standing within a few feet and electronically obtain some of the card information. There are a multitude of videos online that demonstrate this type of data theft. The card number and expiration dates can be stolen with this type of technology.

North Alabama Educators Credit Union does not utilize RFID chips with our VISA Debit Cards. The VISA Credit Cards issued through our partner Elan also do not utilize RFID technology. As a result, there is no threat of data theft from electronic pickpocketing on our member cards.

It is important to note that the 3-digit security code on the back of cards cannot be obtained via electronic pickpocketing. The majority of Internet transactions with a credit or debit card would require the correct 3-digit security code to complete a transaction. For those who do possess cards with an RFID chip there are special protective card sleeves available that would block transmission of the short wave signal.

Regardless, it is still unnerving to say the least that someone could electronically steal card information from your wallet or purse just by standing close by.

Again, North Alabama Educators Credit Union does NOT utilize RFID technology for either our debit or credit cards.