A New Kind Of Fraud Emerges; Inflation Causing A Scaled Down Spring Break

Fraudsters Double Down on Returns Abuse

As more shoppers continue to move online, so has returns abuse. However, this form of fraud has become a severe drain on many merchants’ bottom line. Fraudsters have changed from amateur operations to more professional ones. After a customer receives their order, a fraudster will contact the merchant and claim the item has not arrived or it has arrived damaged. If the customer is supposed to return the item, there are many ways around this, from sending an envelope with an appropriate sticker that will be scanned and discarded to an empty box to one with the correct weight in rocks or dry ice (which has evaporated by the time the box reaches the retailer, leaving it looking like the merchandise was stolen in transit). If there is no return required, the customer keeps the item and the refund and pays the refundster 5-20% of the value of the item. [Charged]

Many Travelers Are Skipping Spring Break Trips This Year Due to High Prices

Some 22% of U.S. adults plan to travel for spring break. However, more than half, a staggering 66%, said they’d been priced out of at least one of their first choices for a spring break vacation. For many, about 32%, that means their preferred hotel or accommodation was too expensive. Others said they were priced out of their preferred flight (29%) or even visiting their first-choice location (25%). About 70% of travelers planning spring break trips this year are tweaking their travel plans to save money. People said they were changing their destination, the duration of the trip and how they’d get there (for example, flying instead of driving), changing or canceling excursions or activities, or altering their accommodations. [The Points Guy]

Fed Officials on Board with More Modest Pace of Interest Rate Hikes

Federal Reserve officials on Wednesday said more interest rate rises are in the cards as the U.S. central bank presses forward with its efforts to cool inflation although none were ready to suggest that January’s hot jobs report could push them back to a more aggressive monetary policy stance. [Reuters]

Americans’ Use of Credit is Growing, But Slowing

American consumers, overall, relied more on credit to pay for things last year. In 2022, consumer credit increased 7.8% from the year before, according to new data from the Federal Reserve. That includes nonrevolving credit, like student loans and auto loans, and revolving credit, like what we buy with credit cards. But in December, a month generally known for credit cards getting a workout, the growth in borrowing slowed. [Marketplace]

Households Burn Through What’s Left of Their Pandemic Savings

The cushion of savings many built up during the pandemic is thinning out. In some households, it is already gone. Americans have spent down about 35% of the extra savings they accumulated during the pandemic as of mid-January, according to an estimate from Goldman Sachs. By the end of the year, the company forecasts that they will have exhausted roughly 65% of that money. [The Wall Street Journal]

Apple Expands Testing of ‘Buy Now, Pay Later’ Service to Retail Employees

Apple has expanded an internal test of its upcoming “buy now, pay later” service to the company’s thousands of retail employees, a sign the long-awaited feature is finally nearing a public release. The tech giant contacted retail staffers this week to offer them a test version of the service. The offering, called Apple Pay Later, lets shoppers split the payment for purchases into installments. The company previously rolled out a test for corporate employees. [Bloomberg]

Easy to Use, Mobile Payment Apps Are Also Easy to Misuse

While they’re fast and easy, mobile payment apps can have serious drawbacks. Users can lose money if they accidentally pay the wrong person, mis-type a dollar amount or succumb to a fraud or a scam that tricked them into making a payment. About a quarter of bank customers in an October survey by J.D. Power said they or a close relative had experienced fraud via a peer-to-peer service. And according to Consumer Reports, 12% of frequent payment app users reported sending money to the wrong person. [The New York Times]

American Express Taps Microsoft AI for New Expenses Tool

American Express revealed it is partnering with Microsoft to develop a new solution to simplify expense reporting for employees and businesses, using artificial intelligence and machine learning technologies. It will feature a “decision engine” that categorizes transactions and assigns risk scores based on transaction details, the company’s travel and expense policy, and the traveler’s purchase and payment history on their American Express card. [Skift]

Google Pay and Chrome Can Now Combat Cybercrime with Virtual Cards for American Express

Eligible American Express cardholders can use a virtual card number in place of their actual credit card information when shopping with Google Pay and Chrome. Virtual card numbers, including a CVV security code, are generated by machine learning algorithms at the time of sale, and thanks to Google’s partnerships with banks like Amex, this still bills you and earns rewards as if you entered your regular credit card number. The virtual card is only temporary, so even if the numbers get stolen, cybercriminals are significantly less likely to be able to charge your account. Google launched this feature for Capital One customers last year and is now expanding the service to America Express cardholders. The company has stated it is also working with Visa, Mastercard, and other major banks to potentially bring this feature to the two largest credit card networks later this year. [Android Police]

Need a New Credit Card? It Can Take Almost Two Months to Get a Replacement

It used to be that if you needed to urgently replace your credit card or debit card you could get one within a week or so. Not anymore. It can now take up to eight weeks to get a new card. Over the years, credit cards have increasingly relied on chip technology for enhanced security. Embedded in those chips are a user’s account number, identification information, and cryptographic keys that make cards more secure than when they had magnetic stripes. When pandemic-related supply chain disruptions led to a massive chip shortage, card manufacturers found themselves suddenly scrambling alongside other industries that also rely heavily on chip technology. [NPR]

How Mastercard, Goldman Sachs and Other ‘TradFi’ Titans Are Using Blockchain to Rewire Global Finance

Crypto is in crisis, but many of the world’s biggest financial institutions are still banking on the underlying tech as the best way to build confidence with customers, and with one another. Today, tokenization at Mastercard means replacing the 16-digit number on your plastic credit card with a super secure unique digital record for every transaction, without ever leaving behind your identity in the form of a credit card number. It also allows customers to utilize digital wallets. It’s not yet on a blockchain, but Mastercard is currently working with banks and merchants to tokenize a variety of assets, including deposits, which will be tracked on multiple public and private blockchains. [Forbes]

Capital One Refer a Friend: What You Need to Know About This Generous Program

Capital One Refer a Friend allows you to refer people for credit cards through a unique link. Using this link, your friend, relative or co-worker can apply for a credit card and earn a sign-up bonus the same way they normally would. However, by using your personalized link, you (as the referrer) can earn a bonus after the person you referred applies for and is approved for a credit card. They must start and finish their application using your link for you to receive the bonus. The referral bonus will be issued in the same type of rewards your credit card normally earns. [The Points Guy]