Last week we brought to your attention the issue of credit card fraud and your business. Today, in the second part of this series, we will examine personal credit card fraud -- what it is, how you can protect yourself against it, and what to do when it happens.
What is credit card fraud?
Credit card fraud is the simplest form of identity theft and something nearly everyone will experience during his or her lifetime. Card fraud begins either with the theft of the physical card or with the compromise of data associated with the account, including the card account number and other information that would be available to a merchant during a legitimate transaction. The compromise can occur by many common routes and usually right under the nose of the cardholder. A simple example is that of a waiter or waitress photographing cards while they are in his or her possession. However, sometimes the data breach is much more sophisticated and cannot be blamed on frontline employees. The rapid growth of credit card use on the Internet has made database security lapses particularly common. The well-publicized breaches at Target and Home Depot this past year are just two examples of that.
How do I protect myself?
There’s an old adage that tells us ‘an ounce of prevention is worth a pound of cure’. That maxim is particularly appropriate when it comes to credit card and identity theft. Here are some simple steps you can take:
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Keep it to yourself. Never lend your card to anyone -- your kids, friends, anyone. You are at risk every time your card is out of your possession.
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Do not give your account number to anyone over the phone unless you initiated the call to the (reputable) company first.
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If you receive an email that appears to be from your bank or credit card issuer, do not follow links within the email to login to your account. Hackers are particularly adept at creating convincing email scams. Open a separate window and log into your account through the card issuer’s website.
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Carry only the card you need for each outing, and keep it separately from your wallet. This will minimize losses if someone steals your wallet.
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As much as possible, keep an eye on your card during each transaction.
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Never leave a blank space on a receipt. Cross through any “tip lines” on restaurant receipts if you are not leaving a tip or leaving a cash tip on the table.
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Save your receipts to compare to your statements.
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Check your bills online often -- daily if possible. The sooner you spot fraudulent activity the better.
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Notify your card issuer immediately if you have moved.
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Shred all cards, receipts, and statements you no longer need.
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Be particularly vigilant over holiday seasons and periods of travel when you are using your cards more.
What if I’m a victim?
Unfortunately, despite all the best efforts, you can still fall victim to credit card fraud. Thankfully, the law is on your side; you have no responsibility for charges you did not make. Call your card issuer immediately if your card has been lost or stolen, or if you notice strange transactions on your account statements. Insist that your account be closed and a new account number and cards reissued. Also take this time to check your annual credit report to make sure the thief has not gained access to your entire identity. Look for credit inquiries from companies you don't recognize, accounts you did not authorize, and addresses that are not familiar. Most likely, this will just be an issue of a compromised credit card number and not full-blown identity theft. However, it’s better to be safe than sorry.
