Protecting Yourself Against Credit Card Fraud
Credit card fraud is widespread: Cards being stolen and used to purchase gas; restaurant workers stealing credit card information to use for personal purchases; phony bank emails urgently requiring you to send account information; PIN and account information skimmed at ATMs.
Daily news stories show that credit card fraud can occur in a variety of ways and can happen to anyone. The more you know about it, the better you can protect yourself.
Credit card fraud is theft that occurs anytime a credit card or a card’s information is stolen and used as a fraudulent means of payment in a transaction. It can happen without the cardholder ever realizing that the card information has been stolen. When a card is lost or stolen, it remains active and open until the cardholder notifies the issuer that the card has been lost or stolen. The thief can use the card until it has been reported and cancelled.
According to the FTC, credit card fraud costs cardholders and issuers billions of dollars each year.
Experts suggest that cardholders review credit reports to look for suspicious activity or accounts opened by someone else in your name. It is the cardholder’s responsibility to frequently monitor the account for fraudulent charges.
Credit card fraud has advanced beyond stealing and using real credit cards. Here are two common practices that are used to steal your credit information:
* Skimming. Skimmers are devices that can be used to swipe credit cards and collect the account numbers and information embedded in the magnetic strip. Anyone can buy a small, handheld skimmer. These can be used in restaurants. The waiter or cashier takes your card, charges your account, then swipes it a second time to steal the information. Skimmers can also be installed at ATMs to catch your PIN when you enter it. One way to detect these skimmers is to look for raised edges on the machine. If you are unsure about the ATM, use another one.
* Phishing. The most common form of phishing is the email that appears to be from your bank or credit card issuer with an urgent message about your account. These emails require you to reply with your account information or give you a number to call to supply your account information. Once you provide this, they can take money from your account or open new accounts in your name. Legitimate banks do not ask for information in this manner.
The FTC and FBI suggest taking these actions 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.