Credit Card Fraud--How to Protect Yourself
This week, Albert Gonzalez was charged with involvement in the biggest case of credit/debit card data theft in United States history. Federal prosecutors allege that he was part of a group of hackers that seized access to 130 million credit and debit accounts. This is a startling number and a good reminder of the importance of protecting account information.
According to a Javelin Research study released in February, the number of identity theft victims in 2008 increased 22% over 2007 levels to 9.9 million adults in the United States. The total annual fraud (the amount criminals were able to obtain) increased only 7% in 2008 versus a year ago to $48 billion. Surprisingly, the average fraud amount decreased by 12% to $4,849 and the consumer costs of fraud dropped by 31% to $496 per incident in 2008, down from $718 the previous year.
"The cost of fraud is dropping because consumers and businesses are catching and resolving fraud more quickly. This indicates people are paying more attention to their accounts and credit reports, and are faster to report suspicious activity," says Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook. "If you think something is not correct, contact your issuer as soon as soon as possible."
While cases like the Gonzalez arrest get the headlines and scare the public, the Javelin study says that low-tech methods of theft, such as stolen wallets, checkbooks, credit and debit cards, are still the most likely methods of fraudster attacks.
"Unfortunately, the possibility of fraud and identity theft is now one of the risks of life. You can't eliminate it, but you can take steps to protect yourself," says Hardekopf. "Pay attention to the notices you receive from your issuer. If your account information has been stolen, your issuer will notify you by letter or email. These letters can come in plain white envelopes and might be easy to miss. If you receive a notice, it is a good idea to contact your bank or issuer and verify the authenticity of the notice. This will help avoid scams. The issuer may offer you free monitoring service to notify you if there is suspicious activity in your account. It is a good idea to sign up for this free service."
Here are some tips from the FTC and FBI to guard against fraud:
* Sign your cards as soon as they arrive.
* Carry your cards separately from your wallet in a zippered compartment, a business card holder, or another small pouch.
* Keep a record of your account numbers, their expiration dates, and the phone number and address of each company in a secure place.
* Keep an eye on your card during the transaction, and get it back as quickly as possible.
* Void incorrect receipts.
* Open bills promptly and reconcile accounts monthly, just as you would your
checking account.
* Report any questionable charges promptly and in writing to the card issuer.
* Notify card companies in advance of a change in address.
* Be cautious when responding to special offers (especially through unsolicited e-mail).
* Be cautious when dealing with individuals and companies from outside the country.
* The safest way to purchase items via the Internet is by credit card because you can often dispute the charges if something is wrong. Make sure the site you are using is a secure site.
* If you bank online, don't use the "automatic sign on" for bank or credit card sites.
* Never provide your credit card number or other personal information on the phone, unless you are able to verify that you are speaking with your trusted financial institution or a reputable merchant.
* Don't give your account number to anyone who sends you an email or calls you on the phone.
* To make sure store or restaurant employees aren't skimming your card, keep an eye on your card as they swipe your card for payment. The devices used for skimming are sometimes disguised to look like cell phones.
* After the purchase, check to make sure you were handed back the right card.
* If you are traveling to a foreign country or making a large purchase with your card, notify your credit card issuer in advance so your account won't draw attention for possible fraud.
* Cover the keypad with your hand when entering your PIN at an ATM. There may be cameras or someone watching as you enter this information.
* Occasionally change your account number (one can change an account number without closing the account). Also change your PIN from time to time.
If fraud does occur, or your cards have been lost or stolen, immediately call your issuer. You are protected by law so that once you report the loss or theft, you will not be further responsible for unauthorized charges. Your maximum liability for credit cards is $50 per card. After you report the fraud, you will be sent a fraud affidavit to fill out and return.
According to a Javelin Research study released in February, the number of identity theft victims in 2008 increased 22% over 2007 levels to 9.9 million adults in the United States. The total annual fraud (the amount criminals were able to obtain) increased only 7% in 2008 versus a year ago to $48 billion. Surprisingly, the average fraud amount decreased by 12% to $4,849 and the consumer costs of fraud dropped by 31% to $496 per incident in 2008, down from $718 the previous year.
"The cost of fraud is dropping because consumers and businesses are catching and resolving fraud more quickly. This indicates people are paying more attention to their accounts and credit reports, and are faster to report suspicious activity," says Bill Hardekopf, CEO of LowCards.com and author of The Credit Card Guidebook. "If you think something is not correct, contact your issuer as soon as soon as possible."
While cases like the Gonzalez arrest get the headlines and scare the public, the Javelin study says that low-tech methods of theft, such as stolen wallets, checkbooks, credit and debit cards, are still the most likely methods of fraudster attacks.
"Unfortunately, the possibility of fraud and identity theft is now one of the risks of life. You can't eliminate it, but you can take steps to protect yourself," says Hardekopf. "Pay attention to the notices you receive from your issuer. If your account information has been stolen, your issuer will notify you by letter or email. These letters can come in plain white envelopes and might be easy to miss. If you receive a notice, it is a good idea to contact your bank or issuer and verify the authenticity of the notice. This will help avoid scams. The issuer may offer you free monitoring service to notify you if there is suspicious activity in your account. It is a good idea to sign up for this free service."
Here are some tips from the FTC and FBI to guard against fraud:
* Sign your cards as soon as they arrive.
* Carry your cards separately from your wallet in a zippered compartment, a business card holder, or another small pouch.
* Keep a record of your account numbers, their expiration dates, and the phone number and address of each company in a secure place.
* Keep an eye on your card during the transaction, and get it back as quickly as possible.
* Void incorrect receipts.
* Open bills promptly and reconcile accounts monthly, just as you would your
checking account.
* Report any questionable charges promptly and in writing to the card issuer.
* Notify card companies in advance of a change in address.
* Be cautious when responding to special offers (especially through unsolicited e-mail).
* Be cautious when dealing with individuals and companies from outside the country.
* The safest way to purchase items via the Internet is by credit card because you can often dispute the charges if something is wrong. Make sure the site you are using is a secure site.
* If you bank online, don't use the "automatic sign on" for bank or credit card sites.
* Never provide your credit card number or other personal information on the phone, unless you are able to verify that you are speaking with your trusted financial institution or a reputable merchant.
* Don't give your account number to anyone who sends you an email or calls you on the phone.
* To make sure store or restaurant employees aren't skimming your card, keep an eye on your card as they swipe your card for payment. The devices used for skimming are sometimes disguised to look like cell phones.
* After the purchase, check to make sure you were handed back the right card.
* If you are traveling to a foreign country or making a large purchase with your card, notify your credit card issuer in advance so your account won't draw attention for possible fraud.
* Cover the keypad with your hand when entering your PIN at an ATM. There may be cameras or someone watching as you enter this information.
* Occasionally change your account number (one can change an account number without closing the account). Also change your PIN from time to time.
If fraud does occur, or your cards have been lost or stolen, immediately call your issuer. You are protected by law so that once you report the loss or theft, you will not be further responsible for unauthorized charges. Your maximum liability for credit cards is $50 per card. After you report the fraud, you will be sent a fraud affidavit to fill out and return.
