Every time you swipe your credit card or enter your account information online, chances are you’re being targeted by a fraudster ready to exploit victims who don’t take precautions.
Credit card fraud refers to the different types of illegal and unauthorized use of a credit card to acquire goods, enjoy services, or withdrawing funds from an account without the intention of paying for them.
How does credit card fraud occur?
There are generally four ways fraudsters get right down to business:
1. By using a lost or stolen credit card
2. By skimming a card or using a special machine that clones it after one swipe
3. By stealing credit card and other account info from online databases
4. By applying for a new card using another person’s details without their consent
Credit card fraud typically happens alongside other crimes such as identity theft and hacking. Recent data breaches involving credit reporting agency Equifax and credit card company Capital One, for example, have left the personal data and financial records of hundreds of millions of people exposed online for identity thieves and fraudsters to exploit.
It’s this combination of data and identity theft arising from security breaches and the lack of vigilance on the part of the consumer that makes it easier for criminals to tap into and manipulate people’s finances.
Even without a massive breach occurring, cases of fraud might continue to go unnoticed if the account holder pays little attention to the transactions showing up on their statement. The first step to detecting fraud, therefore, is to stay alert when it comes to your credit card use and in monitoring your finances.
While you want to spend wisely with your credit card, keeping tabs on purchases—no matter how small—is just as important in staying secure. Monitoring what type of purchase and where and when it was made will clue you in on the suspicious activity.
There are also other ways to help you protect yourself from credit card fraud. These tips range from keeping the actual physical card secure to doubling down the protection on your online account.
How to keep your credit card and receipts safe
1. Always sign a new card immediately upon receiving it. This prevents thieves from forging your signature in case they get a hold of the actual card.
2. Don’t place your credit cards all in one wallet to minimize the risk, as well as the hassle of having to report multiple cards in case you lose your wallet.
3. Be vigilant at all times when paying. Keep an eye on your card when handing it off to the cashier.
4. While you may be feeling generous at times, never lend your card to anyone unless you are confident it will be in good hands.
5. File all your credit reports, transaction records, billing statements and receipts, safely in a place only you know or one that requires an access code. Keep your records with personally identifiable information such as social security and credit card numbers away from prying eyes.
6. Carefully examine whether the amount included in your billing statement reflects the same amount in your receipt. Any discrepancy should be taken as an indication of suspicious activity.
7. Double-check details such as purchases and the date and location of the transaction, specifically those you do not recall making at shops or restaurants you do not regularly visit.
8. If you must discard any documents, remember to shred them first and ensure your personal details are no longer identifiable in the printout.
9. If you must discard old credit cards, remember to cut them up and specifically destroy the chip and magnetic strip to bar any future financial transactions.
10. Never provide your account details over the phone unless you made the call and are sure about the transaction and its purpose.
How to secure your online accounts
1. Set an alphanumeric password that cannot be easily associated with your other personal details such as your name, birth date, or even the names of your family members and pets.
2. Activate a multifactor authentication system on your online bank account or mobile banking app. This can be a combination of a text-based password, a one-time SMS code or a text-based password, and biometric data such as your fingerprint, iris or facial scan.
3. Change your password periodically and never write it down on just any random piece of paper.
4. Monitor your online bank accounts weekly, if not daily. Report any suspicious activity immediately.
5. Never open your account when accessing through public Wi-Fi or on a public device. This is a hotbed of identity thieves and fraudsters looking for their next victim.
How to protect yourself against scams
1. Never respond to a suspicious email asking you to click on a link, download a file, or input details into an online form. No matter how tempting an offer may seem, remember that reputable companies will never prompt you to perform such activities through email.
2. Initiate transactions using only the official website of a company. Check whether the URL or website address has any misspellings or weird alphanumeric combinations. This is a sign you may be looking at a fraudulent website trying to mimic a legitimate one.
3. Check the details of the website you are accessing. Reputable sites have the extra bit https:// and a lock icon in the URL bar. This indicates the page you are accessing is secure.
4. Never communicate with anyone claiming to be a representative or agent of a company that you did not request to contact you.
Being alert when it comes to credit card fraud will help you stay on top of your finances and keep you from falling into the trap of fraudsters, hackers, and identity thieves.
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