Credit Card Fraud
—updated February 2016
Credit card fraud is identity theft in its most simple and common form. Someone can apply for a credit card in your name if they have the right information. You won’t know a thing about it until the credit card company tracks you down and demands payment for the purchases “you” have already racked up.
With a person’s name, Social Security number and date of birth, someone can get loans, access the person’s existing bank accounts, open new bank accounts, lease or buy cars, get insurance, you name it.
The new chip and pin credit cards have not ended credit card fraud, they’ve only changed some crooks’ modus operandi, CNBC reports:
“The days of spotting an unauthorized charge on your credit card aren’t over, but criminals have been increasingly focused on perpetuating a kind of fraud that’s harder for consumers to spot and can be more difficult to fight — opening new credit cards and other accounts in the victim’s name. Such “new account fraud” jumped 113 percent in 2015, and now represents 20 percent of all fraud losses, according to a new report from Javelin Strategy & Research.”
8 Ways You’re Setting Yourself Up For Credit Card Fraud
Applying common sense when using credit cards is always a good rule of thumb, but there will be situations when you increase the risk of becoming a victim of fraud without even realizing it. The U.S. accounts for 24 percent of total worldwide card volume but 47 percent of all card fraud, according to a Barclay’s Bank study cited by creditcards.com.
Here are eight ways you could be setting yourself up for credit card fraud:
(1) Throwing away billing statements and other sensitive information. Your billing statements will usually contain your complete credit card number, address and other identifying information that a thief could use to make purchases. Instead of throwing those statements directly into the trash, take the time to shred these documents before getting rid of them. The same applies to credit card applications. While there is no credit card number printed on these, there is enough personal information on the application that could be used by an identity thief. Shredding these documents can reduce the risk that someone will piece the page together and retrieve confidential information. Think about the things you throw in the trash. Do you throw your pay stubs away once you’ve recorded the amount in your checkbook?
(2) Carrying all your credit cards in your wallet. It’s a good idea to carry only the credit cards you use in your wallet and store cards with inactive accounts in a safe place. For even more security, carry only the card or cards you need for each trip out of the house. If you end up losing your wallet or purse, it will be much easier to contact the credit card companies to freeze or cancel your account before someone has a chance to use it.
(3) Ignoring your monthly statement. Even if you don’t use a credit card regularly, you need to check your monthly statement to verify all transactions. Ignoring your monthly statement only to realize that someone has used your credit card to purchase items without your knowledge can leave you with a pile of debt – the type of debt you will have a hard time fighting to reverse with the credit card company. If you spot any unauthorized transactions when scanning your statement, you can contact the credit card company immediately to either freeze your account or investigate the transaction.
(4) Sharing credit card information over the phone. From a security standpoint, it makes sense to place an order with a business over the phone and authorize a credit card purchase. But you need to make sure you’re calling the right company and are not sharing credit card information with anybody who initiates a call as a way to “verify” your account or identity. Be careful about sharing credit card information with people who claim they need to look up your account to determine your status or even just to keep your account active.
(5) Checking credit card accounts online via an open wireless network. It can be tempting to do a quick check of your credit card accounts, pay a bill or even make a purchase when you’re sitting in a cafe or connecting to the Internet at the airport. However, doing so could put you at risk for sharing sensitive information with hackers who can easily intercept online activities. If you plan on using any passwords to access accounts, always make sure you are doing so through a secure Internet connection.
(6) Responding to unsolicited communications. If you receive an email, text or even a Facebook message prompting you to log in to your account to confirm your account status, or for any other reason, be careful about responding. These messages can be a form of phishing and any links you follow to log in to your account may take you to an unverified site. Remember that you can always contact the bank or credit card company to verify whether they have sent you any messages, or if anything does need to be confirmed.
(7) Assume you’re fine because you have good credit. Ironically, consumers with high credit scores are more likely to become victims of identity theft, according to the credit bureau Experian. Consumers with high credit scores tend to get approved for more credit cards. Then, when fraudsters steal their identities, the fraudsters are also more likely to get approved for credit cards due to their victims’ stellar credit scores.
(8) Forgetting to change your address when you move. Even though you might set up a mail forwarding service to your new address when moving, some mailings might still end up going to your old address. Notify all credit card issuers about the address change as far in advance as possible so that statements, credit card applications and other documents that contain sensitive information are not sent to anyone but you.
- Identity Theft
- How To Protect Yourself From Identity Theft
- How Your Personal Information Can Be Accessed
- Beware Of Scam Emails About The Affordable Care Act
- What To Do If You’ve Been The Victim Of Identity Theft
- Sample Letter To New Creditor
- Sample Letter To Existing Creditors
- Sample Letter To Credit Bureaus
- Prosecuting Identity Theft
- Identity Theft Resources