Card security a growing worry

PUBLISHED : Saturday, 24 February, 2007, 12:00am
UPDATED : Saturday, 24 February, 2007, 12:00am

THE FAST PACE of modern living, which often involves dependence on credit and debit cards, is helping to create jobs to provide assistance to those who lose their cards or become victims of crime.

Since setting up its regional headquarters in Hong Kong in 2005, the number of staff at Card Protection Plan Group (CPP) has grown to 90, and the company expects that number to double by the end of the year.

Referring to its business as the 'life assistance market', CPP provides a one-stop protection service for those who register their credit, debit and other stored value cards, like Octopus cards.

'The reason we are growing as quickly as we are in Hong Kong and other parts of the region is quite simple,' said Howard Davidson, managing director of the Asia-Pacific Card Protection Plan Group. 'People are becoming more affluent and accumulating the type of conveniences associated with affluence, which includes credit cards.

'What used to be classed as luxuries have now become a necessity. It has become increasingly difficult to function without access to funds through credit and debit cards.'

Established in Britain in 1986, CPP has more than 10million customers worldwide. Rather than sell its services direct, the company enters into partnership arrangements with banks and organisations that issue cards.

In Hong Kong, the company has partnership arrangements with Octopus Cards, Citibank NA and Standard Chartered Bank (Hong Kong). Clients purchase the credit card protection plan in the same way as they buy insurance.

When CPP members lose their credit card, they call the company's 24-hour hotline and the cards are immediately cancelled, regardless of the number of cards and the issuing organisation.

For example, CPP clients who hold credit cards issued by HSBC or the Bank of China, but paid to be registered through Standard Chartered Bank, would automatically have all of their cards cancelled.

The company will forward emergency funding if the card owner is travelling, and can also help replace passports.

Mr Davidson said the service could reduce the worry of illegal use of lost or stolen credit cards, and save time making numerous telephone calls to different credit card companies.

Credit card details are stored on a sophisticated database that operates at ISO 2701 rated security standard, the highest internet security rating.

According to a CPP survey, reports of lost or stolen cards in Hong Kong by men and women are roughly the same, with women accounting for 56 per cent and men 44 per cent of total losses.

Mr Davidson said during the lead-up to the Beijing Olympics, the mainland government was encouraging retail enterprises to install point of sale facilities that accepted credit card transactions. This could lead to a significant use of credit cards - and the risk of loss or theft.

Due to the sensitive nature of the service, CPP employees need to be honest and maintain the highest standards of integrity. Potential employees undergo a similar recruitment and assessment process as bank employees. While the main job function is principally technology based, CPP employees must display other qualities.

Since losing a card is stressful for cardholders, CPP telephone operators must be efficient and compassionate and be able to speak Cantonese, English and Putonghua.

Job seekers from the banking and financial sector, those with customer services experience and people used to stressful situations would be suitable applicants.

CPP's Hong Kong service includes credit card protection, but the company expects its business to expand to include identity protection.

Mr Davidson said he predicted that in less than 10 years, most people in Hong Kong would be actively taking steps to protect their identity. In Europe, this area of protection was now CPP's fastest-growing service.

'Identity theft is much more than the loss of your hard-earned cash or personal documents. It is a loss of control of your finances and, most importantly, your personal reputation,' Mr Davidson said.

Hi-tech crime is no longer the province of science fiction movies. The potential damage goes well beyond the value of the data stolen. The victim is often unaware of the theft until creditors ask for payment on accounts opened fraudulently. Then, because the fraud has been going on for so long, it can cost victims, thousands of dollars in legal fees and other expenses, plus weeks to restore their credit rating.

According to a survey by research company Unisys Asia South, misuse of personal information has become a key security concern, particularly unauthorised access to credit and debit card information.

Eric Woolley, group chief executive of the Card Protection Plan Group, said the group employed its own identity theft experts who worked with clients to resolve problems.

To prevent identity theft from happening, the company monitors its clients' spending patterns and sends a credit alert that informs the client of any significant changes in credit status, or if others have attempted to take out credit in the client's name. In the event of identity theft, CPP helps clients restore their credit status and resolve legal issues.

Thieves employ various simple techniques to steal personal information. They hack into corporate databases, buy IDs from other thieves, bribe company insiders to provide printouts of customer and employee data, trick consumers (and employees) into providing their user IDs and passwords via e-mail or links to phoney websites, a process known as phishing.

In the United States, a scam aimed at scoring more than US$80million involved the identity thefts of Microsoft co-founder Paul Allen and filmmaker Steven Spielberg. In the scam, Abraham Abdallah, a 32-year-old former dishwasher, used computers in public libraries and phone calls to get the credit records of stockbrokers and bank accounts belonging to billionaire investor Warren Buffett, movie director George Lucas, talk show queen Oprah Winfrey, politician Ross Perot and New York mayor Michael Bloomberg.