Citibank Credit Card Business Poster Term Paper

39). Credit card fraud, though, is not playground for banks for numerous reasons, including: (a) online payment fraud erodes consumer confidence and trust in their brands; for many consumers, a breach of security prompts a knee-jerk reaction of closing accounts and moving to another financial institution; and - the liability for fraudulent transactions shifts to the issuing financial institution with costs ranging between $20 and $30 to process each chargeback. The author also provides a critical review of what initiatives are being taken to prevent credit card fraud citing the pros and cons of each, but also notes that the problem is complex and the situation remains dynamic.

Scott, R. (2007). Credit card use and abuse: A Veblenian analysis. Journal of Economic Issues, 41(2), 567-569. In this study, Scott provides a comprehensive history of the credit card and how its use exploded over the last 20 years and notes that the average American household has eight credit cards in it, and these cards are used to charge almost $2 trillion in purchases of goods and services each year. To help explain the meteoric growth in credit card use, Scott uses the neoclassical consumption theory to show how consumers can use credit cards inappropriately in ways that contribute to the incidence of credit card fraud.

A comparison of these two articles reveals some fundamental differences in reporting strategies, with Valentine using a strictly pragmatic analysis of what is happening to banks and what they have been doing about it in terms of credit card fraud. By contrast, the analysis presented by Scott is theoretical in nature, but both journal articles provide some useful insights into what is taking place in the credit card industry today in terms of fraudulent activity and some of the reasons contributing to its increase in recent years.List of Databases, Reference Tools and Other Sources

Reliable online research sources such as EBSCO, Questia, and university-sponsored databases;

Governmental resources such as Federal Bureau of Investigation's Web site, the Federal Reserve Bank;

Organizational Web sites such as Citibank, Chase, and others.

What Has Been Learned to Date?

A number of valuable insights were gained during the preliminary research, including:

Credit card purchases of goods and purchases are almost $9 trillion annually;

significant percentage of these purchases are made online; and,

The fear of credit card fraud prevents many consumers from using their credit cards online.

Problems and Difficulties Encountered.

Many of the security initiatives in place or contemplated by banking institutions are, by necessity, confidential and proprietary and the specifics concerning these security initiatives are restricted. Furthermore, it requires some time for studies to make their way into the peer-reviewed literature. Because the online environment in which these initiatives are taking place continues to evolve, the relevance of such peer-reviewed studies will be limited.

References

About Citigroup. (2008). Citigroup. [Online]. Available: https://www.citicards.com/cards/wv/detail.do?screenID=612.

Identity theft solutions. (2008). Citigroup. [Online]. Available: https://www.citicards.com/cards/wv/detail.do?screenID=700#InternetSecuritySpecialists.

Internet fraud. (2008). Federal Bureau of Investigation. [Online]. Available: http://www.fbi.gov/majcases/fraud/internetschemes.htm.

Scott, R. (2007). Credit card use and abuse: A Veblenian analysis. Journal of Economic Issues, 41(2), 567-569.

Valentine, L. (2003). The fraudsters' playground: The Web is becoming more bane than boon as online credit card fraud soars. Several new initiatives may cut the losses. ABA Banking Journal, 95(8), 39-40.

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