AmEx Fails to Close Gaping Security Hole

American Express has failed to remedy a security hole in its card activation system, though they were informed by MailCase a full year ago. Scammers armed with a lineman’s telephone can clip directly into a new cardholder’s telephone line from a nearby phone box and call to activate the card, seemingly, from the card applicant’s home phone.

“American Express thinks that it’s the cardholder calling, since their caller ID system shows that the call is coming from the phone number of the cardholder,” said Matthew Prestwich, President of MailCase Locking Mailboxes.

This isn’t a difficult scam to pull off, since American Express uses only their caller ID system to validate that it is the customer calling to activate their card. Most credit card issuers rely on multiple authentication methods before they will activate your card. Passwords, social security numbers, even your childhood pet’s name have become routine when trying to access any of our accounts online or over the telephone. Why a brand name as celebrated as American Express would drag their feet on such a vital issue is anyone’s fair guess.

This combination of mail fraud and identity theft is just one of the latest in a long line of identity theft scams. Scammers exploit everything from consumer’s fear to their own greed. They will often send you emails from what looks to be a credible site, warning you that your account has been compromised, and when you click on the link, you are taken to one of their sites and asked to reenter your personal information. Of course that goes only to the scammers, straight into their eager arms. One of the most successful scams is perpetuated by emailing targets with a story of how the scammer just must dispose of a large amount of cash (usually due to tax laws in their country) and need someone’s good name to deposit it under in the bank. You, no doubt, will receive a huge reward for helping out. “Now just give me your personal information so I can open an account under your name” is usually the last thing you will ever hear from these scammers. Here’s some sound advice on this: run fast away.

It is more important today than ever before to use discretion in any situation where you may be asked to share your personal information.While technology tries to keep pace with the thieves, they have some technologically bright folks helping them out also in this war over your identity. All it takes is a little precaution on your part. There are some wonderful opportunities in credit right now. The struggling economy has brought with it a slew of low interest rate credit cards, 0% balance transfer cards and rewards programs are far too numerous to count. There is no need for you to miss out, just be mindful out there!

Lauren Palmer

Lauren Palmer is a freelance writer who is a regular contributor to a variety of online and print publications. Although she has much to say about many subjects, she specializes in topics pertaining to personal finance. She holds a bachelor’s degree from NYU in journalism.