Auto Loading Your Loyalty Card is a Bad Idea

I ran into a very bad issue with my Starbucks Loyalty card a while back, when all the information in the Starbucks database was hacked and my account information was stolen. This information hack allowed the thieves to create their own version of my Starbucks card, and they “went to town” on it.

Let me digress , remember that the Starbucks Loyalty “card” is not a credit card per se, it is a card which is “filled” from a money source so that you can buy things (note I said things not just coffee) at Starbucks (and collect allegiance points and such). You can “fill” the card from a bank account, a credit card or even your Pay Pal account, and you can fill it one time or you can set up the “Auto Load” mechanism. The auto-load mechanism will take money automatically when your loyalty account balance drops to zero (or a preset threshold), and this is where the hackers found their angle.

The scam seems to run like this, once your account or card is “cloned” someone goes into a Starbucks store, and buys $100 worth of things (most times just a gift card), and then the auto-load kicks in, takes money from its source (Credit Card, Bank Account, etc.,) and then the thief go to another store and will buy another card, and this continues on until the account is flagged or in my case, I saw what was going on and called to cancel the auto-load. The only reason I knew this was happening was because I got notifications on my phone telling me that the auto-loads happening.

Loyalty Card Scam

A Graphic Rendition of the Scam

In my case I was lucky enough to catch it early, and Starbucks was smart enough to refund me all the money taken (after 15 business days).

Since this incident I have gone to any other loyalty cards that I have like this and turned off the auto-load option, to stop this scam from happening again (some examples might be a Tim Horton’s card or maybe your Subway Card?).

This is not a commentary on the Starbucks Brand or Coffee (I still drink it and enjoy it), but a reminder of the fact that the easier it is for you to spend money, the easier it is for the scammers to find a way in to get at your money (and spend easily as well).

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Gas Dampens CPI for July

For yet another month the lowering price of gasoline and transport continues to dampen (and possibly hide) a CPI that has been around 2.0 % or higher for a long time (yet it continues to be called 1.0%, fun eh?). Stats Canada stated for July:

Lower energy prices continued to moderate the year-over-year rise in the CPI; however, the effect was less pronounced in July than in the previous month. In particular, the gasoline index was down 12.2% in the 12 months to July, compared with a 14.1% decrease in June.

I am sick of how these numbers are being used to hide the fact that inflation is high enough that interest rate controls on them should have been triggered months ago, but due to Canada’s population being Debt Junkies the government is too petrified of what this might entail. The other side of the coin is with oil revenues dropping, and gas prices dropping Canada is paying the price as well.

I am simply being paranoid? Maybe, but if you look at this graph, you will see my statement about 2.0% inflation (without gasoline) is maybe not as much me being paranoid, as being prudent:

CPI for past while

CPI for past little while, with and without energy

I think the center of my vitriolic commentary centers around the numbers is the following statement:

Food prices advanced 3.2% in the 12 months to July, following a 3.4% increase the previous month. Prices for food purchased from stores were up 3.5% on a year-over-year basis in July. The increase in the food index was led by meat prices, which rose 6.1% year over year in July, following a 6.6% increase in June. Additionally, prices were up year over year in July for fresh vegetables and fresh fruit. Prices for food purchased from restaurants rose 2.7% in the 12 months to July.

Food has been over 3% growth for a good long time, and anybody who shops for food knows this, but nothing is being done about it, and the press dismisses it because gas is so darn cheap? You know what really galls me the most? None of the major party leaders have even batted an eye about this.

Bank of Canada’s core index

The nice thing about the Bank of Canada, is their index doesn’t include energy:

The Bank of Canada’s core index was up 2.4% in the 12 months to July, following a 2.3% rise in June.


Food for thought?

The Big Graph

This graphic does an excellent job showing what is really up, and what is keeping the CPi down:

 

Year over Year CPI

Interesting that Transportation is the only one down?

 

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Personal Finance Tweets of the Week (End of Summer)

Haven’t done this for a while, but here are some of the more interesting financial (and other) tweets that I saw this week. Interesting that Twitter has also removed the 144 character limit on direct messages, so it has now become a full messaging system too.

I really liked this one, it was condemning the banks trying to encourage folks to build up more debt? Say what?

Ouch, that one is going to hurt the alleged balanced budget this year, isn’t it?

Uh oh, what about 54 year olds?

I guess the only advice that I can give is, just don’t look, or just don’t care?

What is the best way to teach kids about money? My 2 cents worth is there as well.

Glad to see the FAMSAC food truck rally went well last week. Evidently my Doppelganger (Mayor Watson) was there as well.

Remember you are not attached at the hip to your bank, if you can get a better deal, get it!

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I was tickled pink to see that my favorite party has returned for this election, the Rhinoceros Party. This is the party who had a plank in their platform about damming the St. Lawrence River for Hydro Electric power and in Pierre Elliot Trudeau’s riding, ran another candidate with the name Pierre Trudeau (I got to vote in that election in that very riding). Their first plank for this election in their platform? Nationalize Tim Horton’s! Glad to see the return to common sense politics.

I was glad to see Steadyhand come out with the commentary Good Debt, Bad Debt which points out the alarming rise in Canadian debt. Tom Bradley’s commentaries about the Banks encouraging an already heavily in debt society that there is a concept of “Good Debt” distresses him, and I agree. With low interest rates about to go away, what is going to happen when the rates go up? Thanks to reader @Gene2u for pointing this out, very good article.

The rest of the parties seem very excited about the Mike Duffy trial, except for Mr. Harper who hopes we aren’t watching it. We’ve lost 1 or 2 candidates thanks to unfortunate tweets in their past (guess I’ll never be running for public office) as well, that is about all that has been going on in the election.

Gas prices continue to drop, which is bound to screw up the CPI for the coming months, but with oil sitting at below $40 a barrel, it is about time that gas prices dropped. Is this doing any good for Canada? Depends on where you live, if you live in Alberta, NO!

Did you realize there are 77 Expiration Dates that you Should Track? Time Magazine has an interesting list for you.

Symantec CA

My Writings for Week Ending August 21st

The summer is slowly coming to a close and an entertaining fall lies ahead (with plenty of election shenanigans and tom-foolery) :

Change your bank

Keep this in mind if you want to change your Bank

Kobo Canada


I am also mentioned in this fun article too:


For More Great Financial Stories Click Here 🍁💰🍁

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More Reasons to Change Banks

Last year I wrote about how my daughter got a Student Line of Credit, to help pay for her second degree, as a Chiropractor. Remember, I am the one that talks about being willing to change banks, but unfortunately, my daughter is changing banks due to the mistakes of the local branch of National Bank of Canada (which is the reason I changed banks a while ago as well).

The problems started when the line of credit was first set up, and has compounded since then:

  • It took 3 visits to get the student line of credit set up (we thought) with the local branch. Once the application forms were set up, the first application for the account was declined, because the young lady at the local branch was unaware of how to do the application, it was declined  because the application was asking for the entire value of the loan (for all 4 years of the school). There had to be a reapplication to get the loan set up (finally).
  • The Student Line of Credit was actually set up as a standard unsecured line of credit. This caused the National Bank head office to call (more than once, and somewhat irate) to ask why weren’t the minimum payments being made to the account? It then would take an hour of explanation, and investigation for someone to figure out that the account had been set up incorrectly (by the local branch). The only way it could be fixed was by the local branch, and they failed (more than once) to remedy this issue. The account should be set up so that the interest payments do not need to be paid until my daughter graduated (but yes, they still compound).
  • There was an inability to make payments from other banks to the National Bank for this loan. This meant all banking would have to go through the National Bank only (or use Interac transfers to do things). This is also a shortcoming with the CIBC Student Line of Credit.
  • The on-line banking at National Bank, never really worked correctly for my daughter, she had to keep calling their on-line help folks to get access to the account (just to see what the balance was on the account). This happened every time she tried to access the account, and each time she would ask, “So with the information you have just given me, I can get access to my account”, and the help line person would say “Yes”. It worked that time, and then the next time, she had to call back in, because it would not let her in.
  • The straw that broke the camel’s back was that the National Bank Head Office decided that the “ceiling” (maximum for the loan) for students in Chiropractic College (for their entire program) was  dropped by 33%, and because of this, the line of credit would not have covered the cost of the entire program. The reason for this change (we theorize) was that the Chiropractic College in Trois-Rivieres was consulted to see how much their program cost, and the maximum for the line of credit was lowered to reflect that program’s total cost. This is an issue, as my daughter is going to the College in Toronto (which has higher fees and costs). This meant my daughter had to change to another bank or she would have run out of money, so she is now in the process of changing to CIBC for her Student Line of Credit (and Free Banking too). There were inquiries made to the local National Bank branch to figure out why the Loan Cap was lowered, no real answer was given, just that it was being put in place, and that even though my daughter had been enrolled last  year, and the loan agreement included the higher cap, her cap was being lowered in accordance with the new rules.
Change your bank

Keep this in mind if you want to change your Bank

As you can see a great deal of frustration and confusion lead to my daughter changing her accounts over to CIBC. Naturally I was involved in the decision to change, as I am a guarantor on the student line of credit (or as Michael James would say, I have a Student Line of Credit). The change of the maximum loan limit was the main reason, but the other frustrations certainly made the decision to change, a simpler choice.

Remember, never be afraid to change banks, especially if you feel that you are not getting a very good deal. Also, this is why student debt is so darn high.

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