Although you can lower your risk, anyone can become a victim of credit card theft. Fraud should be reported as soon as it is found so that the card issuer can look into it and make sure you are not liable for the charges.
Whether you’ve been a victim of credit card fraud before or not, we’ll look at some prevention tips in this article as well as things you can do if you have been a victim.
What is Credit Card Fraud?
Credit card fraud is a form of identity theft where criminals make purchases or obtain cash advances in your name.
This can happen with an active account, through the physical loss of your credit card or your account numbers and PINs, or by the opening of new credit card accounts in your name. Once they are inside, thieves rack up debt that must be paid by you and your credit card provider.
Although being the victim of fraud can be extremely inconvenient, it is unlikely to have a long-term negative financial impact. This is because the Fair Credit Billing Act protects consumers from liability over $50 for authorized charges—and many issuers offer $0 liability.
Unfortunately, dealing with credit card fraud comes with additional, unforeseen costs, such as time and annoyance. Investigations into theft by credit card companies can take months, and ongoing problems can harm your credit, which takes time to repair.
4 Types of Credit Card Fraud
Card theft.
This used to be the go-to method for credit card fraud by stealing physical credit cards, whether it was from a restaurant table or your entire wallet or pocketbook.
Occasionally, thieves attempt to take newly issued cards from mailboxes. Inform the issuer at once if your card is lost or if you are informed that a card you were supposed to receive never arrived.
Account takeover.
With this type of credit card fraud, criminals make use of your personal information to contact your card issuer and modify your account access PINs, passwords, postal addresses, and other details so they may take over your account (and lock you out).
This may take some time to discover and fix, depending on how frequently you use your account. To avoid this type of theft, certain credit card companies allow the creation of a vocal password.
Cloned cards.
When you swipe your card, fraudsters may take it covertly using “skimmers” that fit over card scanners at petrol pumps and retail sales terminals. They can then duplicate your card number for their own nefarious purposes. Cards with EMV chips have made this process much more challenging.
Card-not-present theft.
This involves using a credit card account fraudulently without having a physical card.
Your information may be obtained by fraudsters through hacking or phishing, and some thieves sell card data on the dark web. Online purchases simply need your name, account number, and security code, so the thief doesn’t need the actual card.
Can someone use my credit card with just the number and CVV?
Yes. This type of credit card fraud is known as “card-not-present” fraud, as the scammer does not need to have possession of the physical card. This type of fraud is becoming more common with the rise of online shopping and e-commerce.
Who do you file a report with if you are a victim of credit fraud?
If you’ve discovered fraudulent activity on your credit card account, You’ll need to file a report. Below is a list of places you need to contact.
Your Credit Card Issuer
Inform your credit card company of the fraudulent transaction right away.
Although you might need to phone the number on the back of your card, some issuers allow for fraud reporting in their apps or on their websites. The issuer will probably deactivate that card and offer you a new one with different numbers if fraud is confirmed.
Law Enforcement
If you’ve established that you’re a victim of fraud, you might want to contact the police to report the incident.
You can report identity theft by visiting IdentityTheft.gov. Law enforcement authorities use this in their inquiry, and you can then follow up locally if you’d like.
Credit Bureaus
The possibility for fraudsters to rack up charges in your name that they never intend to pay increases when credit card fraud goes unnoticed.
Creditors and credit bureaus will assist you in repairing any damage once you have found the issue and established that you did not authorize the charges.
Tips to Avoid Credit Card Fraud
By constantly monitoring for unusual activity and diligently guarding your accounts, you can catch credit card fraud early and before too much damage is done. Here are a few tactics.
Review statements periodically.
At least once a month, carefully review your card statements to check for any unforeseen expenditures or cash advances. If you notice any strange purchases, get in touch with the card company as away to dispute the charges.
Check your credit report.
Review your credit reports from the three national credit bureaus on a regular basis.
Look for strange inquiries or loan accounts you didn’t open. If you find any, contact the creditor using the information provided in the credit report. They can provide you with more details, start an investigation, and even send a notification to the credit bureaus asking them to delete the account.
Secure your physical cards.
When you’re out, keep a close eye on your wallet or handbag, and avoid leaving your credit cards unattended if at all feasible.
Keep credit cards you don’t use in a secure location at home, and only carry your Social Security card when absolutely necessary (such as when applying for a passport).
Be vigilant online.
Recognize warning indicators of fraud, such as phishing emails.
When purchasing online, avoid saving your credit card number and make sure the website is safe (search for “https://”). Additionally, you are more vulnerable to hacking when utilizing a public Wi-Fi network, like one at a coffee shop.
So, stay away from sensitive activities like online banking unless you are using a virtual private network.
Watch out for phone scams.
If someone calls you and asks you over the phone for sensitive information like your credit card number or Social Security number, it’s probably a fraud attempt.
Banks and credit card companies already know your account numbers and won’t ask you for them. They may be clever and claim they merely need to verify the information.
To determine whether the call was legitimate or fraudulent, think about hanging up and dialing the official number for the company they said they were with.
Using Credit fraud alert as an extra security measure
To add an extra layer of security, you can consider using a credit fraud alert. This is a notice added to your credit report that instructs prospective creditors to get in touch with you and verify your identification before issuing new credit.
This contact should alert you if someone attempts to obtain a new credit card or borrow money using your name, allowing you to take the necessary steps to close the new account.
Consumers who wish to avoid having to freeze and unfreeze their credit each time they want to apply for credit may find that a fraud alert is a useful alternative.
Can a credit fraud alert affect your credit score?
A credit fraud alert is simply an extra layer of security; it doesn’t affect your credit score. However, failing to use one may affect your credit score if scammers get hold of your credit card and use it to rack up expenses.
Is a credit fraud alert a good idea?
Because some firms might not take the extra procedures required for identity verification, fraud alerts cannot be relied upon to prevent identity theft.
Taking extra precautions to secure your account is always worthwhile, even if it results in brief transaction delays.
Photo by Nathana Rebouças on Unsplash