Credit card fraud, or credit card theft, is a term that refers to any fraud or theft committed using a credit card. Credit card fraud is closely tied to identity theft, and the cost of credit card fraud is around a billion dollars each year. Credit card theft is committed through stolen credit cards, compromised accounts, and identity theft.
Card credit fraud identity theft affects millions of people every year. According to the Federal Trade Commission, credit card fraud accounts for 28 percent of the nearly 10 million cases of identity theft each year in the United States. IdentityEdge offers credit card fraud protection to help you avoid having your personal information compromised and becoming an identity theft victim.
Credit card theft can occur in a few different ways. One way credit identity theft can occur is by a criminal stealing your existing credit card information. There are several ways this can be done, including using small storage devices to swipe your card at a store or restaurant and later using that information to make fraudulent purchases. Other methods include stealing your card or statements and using the information.
Card credit identity theft can also involve the thief opening new accounts in your name. This often involves stealing pre-approved credit card offers, changing your address and having the cards sent to another address. This allows the thief to run up credit cards for months, or even longer, without your knowledge. Our credit card fraud protection can prevent this form of theft and identify it early if it does happen.
How Credit Card Fraud Works
Credit card fraud can occur when thieves use stolen credit cards, compromise credit card accounts or steal an individual’s identity completely:
When a credit card is lost or stolen, thieves are still able to use it until the credit card holder requests that it be canceled. Thieves are able to rack up thousands of dollars in charges until the card issuer realizes something is wrong. Usually, thieves will use stolen credit cards at self-servicing kiosks, gas stations, online and any other place where identification is not necessary.
Compromised credit card accounts can happen when a thief does not have the card holder’s actual card, but rather their credit card number and verification code. With these two things, thieves can make unauthorized purchases online without the card holder’s knowledge.
Identity thieves can steal an individual’s entire identity and open up fraudulent credit card accounts in their name. Thieves can commit application fraud, which occurs when they use stolen or counterfeit documents to open a credit account in another person’s name. Thieves can also take over an individual’s account by gathering their personal information, and then request a mailing address redirect from the card issuer. Once the mail has been redirected, the identity thief requests a new card.
Thieves can obtain an individual’s credit card information through:
- 1. Skimming
- Skimming is when a dishonest employee of legitimate business uses customer credit card information for fraudulent purchases. They obtain this information by either photocopying receipts or through an electronic device that stores credit card numbers.
- 2. Carding
- Carding is used to verify stolen credit card data. The thief will process credit card information through an online website to verify that it is still valid to use.
- 3. Phishing
- Thieves will send out mass, fraudulent emails disguised as legitimate businesses, and request individuals’ financial information, including credit card numbers and verification codes.
- 4. Stealing
- Thieves can also steal credit card information by snatching pre-approved credit card offers from mailboxes. They may also steal wallets or purses to obtain the credit cards themselves as well as personal information to open up fraudulent credit card accounts.
How to protect yourself
Individuals can protect themselves against credit card fraud by performing certain safeguards. This includes:
- Never store any passwords with internet explorer. It is easy for hackers and thieves to obtain these stored passwords by installing a virus. Passwords should also be long and complex, including both letters and numbers
- Install a firewall. Firewalls should be installed on all personal computers in order to protect against internet threats and hackers. Windows offers free firewall protection.
- Do not open any suspicious emails or links, even if they appear to come from a legitimate institution. Emails and links often contain viruses that can compromise individuals’ computers.
- Do not respond to any suspicious emails. If an email is received from a familiar institution, it should be verified by calling that institution.
- Only shop on secure websites. Unsecured websites can steal credit card information, which thieves can later use to make unauthorized purchases
- Check all credit card accounts regularly. By checking all credit card accounts regularly, individuals can monitor their statements for any suspicious, unauthorized purchases.
- Report any suspicious activity promptly. Individuals should report any suspicious activity promptly to avoid credit score damage.
- Monitor credit scores frequently. Credit scores should be monitored for any suspicious activity, including credit inquiries, address changes, and unauthorized purchases.
- Shred all pre-approved credit card applications. They can be easily stolen and used fraudulently.
- Sign all credit cards as soon as they are received. This adds a layer of protection if a thief is asked to show proof of identification.
In addition to these above tips, individuals should also follow standard identity theft safeguards.
Identity Theft Protection Services
Identity theft protection companies, such as LifeLock, IdentityGuard, and TrustedID, can help protect against credit card fraud by offering a number of different services including credit freezes, fraud alerts, free credit scores, and credit monitoring along with substantial warranties of up to $1,000,000 in coverage.
Companies monitor your free credit report information for suspicious activity and monitor your social security number and listings of off credit loans, such as payday loans to ensure criminals aren’t using your information to commit fraud. By monitoring your information and providing the tools for you to interact with your financial information and credit free score, we can help you prevent identity theft.
What to do if Credit Card Fraud is suspected
If credit card fraud is suspected, individuals should contact their credit card issuers immediately. Most credit card companies provide their customers with toll-free numbers and around the clock service if an emergency should arise. Once an individual has reported their credit card as either lost or stolen, they are no longer responsible for unauthorized charges, and their maximum liability is $50 per credit card by law.
Credit protection fraud service helps to minimize the risk of theft. In addition, if your information is compromised, we work with you until your identity is fully restored. We offer fraud reporting and restoration services to resolve any issues related to your identity and restore your credit for any negative impact on your credit score. Sign up today to give yourself the edge and protect your identity.
Summary
Credit card fraud is all too common and can be detrimental to individuals’ credit scores. It is important for individuals to monitor their credit card bills regularly as well as their credit scores. If any suspicious activity is detected, it should be reported right away to the credit card company. Individuals should also seriously consider signing up for an identity theft protection service, which could save them the time and hassle of monitoring their own credit.