Using (and Abusing) Plastic
Fraudulent plastic?
USA Today had an article last week about the rampant spread of credit and debit card usage in Asia. Card transactions in Asia, collectively, reached $1.8 trillion in 2009 – an increase of 158% in five years. The point of the article was that credit and debit cards are likely to break down Asia’s historically high savings rates, boosting the market for consumer goods of almost all types. And this will be accelerated by the new swipe cards and by the ability to do transactions on your cell phone.
Measured in cards carried per capita, the Japanese have already surpassed the Americans, carrying 2.5 cards each. South Korea has caught up to the United States, each with two cards in their wallets. But that doesn’t mean that Asian spending on cards has climbed anywhere near U.S. levels. Debt per card in the United States is $1317. The Chinese are the most profligate in Asia, with debt per card reaching $194.49, less than 15% of the American debt level. So the flood gates of consumer debt have not exactly opened in Asia.
Hong Kongers and Singaporeans, who you might expect to be in the forefront of adopting credit cards, still only carry 1.33 and 1.15 cards each. And, in the Philippines and giant India, cards are still rare, the average citizen carrying only .06 and .02 cards.
While USA Today focused on the consumer sales impact of credit and debit cards, they neglected a huge downside that has direct implications for exporters to Asian markets. The Commercial Service office of the American Embassy in Singapore has issued a warning to U.S. exporters about fraudulent credit card orders from Asian “customers”. The Embassy warns that American companies are receiving orders from buyers “purportedly” in Singapore who pay by credit card and request delivery to a Singapore freight forwarder. The “buyer” normally places an order, by phone or email, for between $5,000 and $30,000, but wants to split the “purchase” among several credit cards or has to make numerous attempts (with different cards) to get approval for the transaction. Having worked through those delays, the “buyer” then asks for expedited air freight to deliver the goods. The seller falls for this, the goods are dispatched to Singapore, the freight forwarders efficiently send them on to addresses in other countries – all before the seller discovers that the card numbers are all fraudulent.
The U.S. Commercial Service, America’s FBI and the Singapore Police Force are working together to stop the perpetrators, but – even if they are successful – you can expect the scam to move to other transhipment airports and continue. The key warning sign is the use of multiple cards, usually from a first-time customer, and the eventual request for expedited air shipment. Use all the security services provided by the credit card companies and use your common sense.
