With the holidays upon us, the threat for credit card fraud and identity theft is on the rise. This risk is especially great due to the shift towards online shopping this year. Here is everything you need to know to identify, stop, and prevent credit card fraud and identity theft this holiday season.
What Are the Most Common Types of Identity Theft and Credit Card Fraud?
Here are some of the most common forms of credit card and identity theft:
Stolen or Lost Cards
Misplacing a credit card or having a card stolen is the easiest way to fall victim to credit card fraud. Once the thief has possession of the credit card (including the CVV number on the back), they can freely use the card for online purchases.
Phishing is when a potential identity thief sends a slew of legitimate-looking emails designed to confuse recipients into providing sensitive information. These emails often look like a typical email from a bank, streaming service, or another platform, like eBay or PayPal. When a victim clicks the phishing link and provides their details, the identity thief can then harvest their information and commit credit card or account fraud.
Account takeovers occur when an identity thief changes the billing address of a victim, requests a new credit card to the new location, and takes over the credit card account. This form of fraud requires the ID thief to get a significant amount of information from the theft victim so they can ask for a new card to be issued and sent to an address not associated with the actual cardholder.
A fraudulent application is like an account takeover. An ID thief manages to obtain enough personal information about their victim to successfully fill out a credit card application in their victim’s name or creates convincing counterfeit documents to open an unauthorized credit card account. Application fraud schemes can be severe because the victim may not find out about fraudulent charges in their name until it is too late.
How to Tell If You Are the Victim of Identity Theft This Holiday Season
What are some of the tell-tale signs that you were the victim of credit card fraud or identity theft? Here are a few warning signs to look out for:
- You stop receiving bank statements or credit card bills in the mail
- Seeing purchases in your account that you do not recognize
- Debt collectors begin contacting you concerning outstanding balances of which you were unaware
- Unexplained withdrawals from bank accounts or cash advances from your credit cards
- Discrepancies on credit reports or credit monitoring sites like Credit Karma
What to Do If You Suspect Identity Theft or Credit Card Fraud
If you suspect your credit card information might be compromised, you must take the following steps immediately:
Contact Your Credit Card Issuer or Bank
The first step in the event of identity theft or fraud is to contact your bank or credit card issuer right away. Notifying banks of potential fraud can help stop any future fraudulent purchases and help the bank track down the source of the fraud.
Report the ID Theft and Issue Fraud Alerts
After informing your credit card issuer about fraudulent activity on your credit card account, the next step to take is to contact one of the three major credit bureaus (Equifax, Experian, or TransUnion) and ask them to put a security freeze on your credit report, as well. Also known as credit freezes, this prevents others from accessing your credit file and potentially destroying your credit score by opening multiple new accounts, performing numerous balance transfers, and making purchases in your name without permission.
If one password is compromised, assume all passwords are compromised. Change all your passwords after credit card fraud to prevent thieves from obtaining any more vital information and making additional charges on your accounts.
Cancel Recurring Payments or Update Payment Details
Like passwords, update all recurring payments. Change payment details for utility bills, streaming services, or other subscriptions to avoid further fraud or loss of identifiable information.
Monitor Your Credit Reports
Once you limit any future theft via fraud alerts and account updates, check your credit report and keep an eye out for anything suspicious. Identity theft monitoring services, like LifeLock, can provide an invaluable credit monitoring ally to help limit and prevent future fraud.
Related Article: 5 Steps to Take Immediately After Credit Card Fraud
How to Avoid Credit Card Fraud and Identity Theft This Holiday Season
Being proactive is the best way to protect yourself from credit card or identity fraud. Some of the easiest ways to avoid fraud this holiday season include:
Check for Skimmers
Credit card skimmers are small devices that fit over credit or debit card readers at ATMs, gas station pumps, and other locations. Credit card skimmers are designed to capture your credit card information, including your PIN. Once your information is recorded, the thief has everything they need t0 access your credit card or bank accounts. The result may be thousands of dollars in damage.
An easy way to spot a credit skimmer is to wiggle the keypad, card slot, or another reader. Skimmers fit over an existing card reader and number pad so that wiggling will alert you to any additional hardware that does not belong there. Also, ensure that the graphics and colors of all parts match up.
Destroy Paper Statements
Never throw away credit card statements. Always destroy any old banking information by shredding it or burning the documents in a fireplace (it is the holidays, after all). You can also opt-in to receive online statements, which offer an additional security layer from physical identity theft.
You should also destroy old credit cards by cutting through the card number, your name, the CVV security code, the magnetic stripe, and your signature. Cut the card into small pieces. Pay special attention to the previously mentioned data or anything else that features sensitive information.
Get a Credit Card with an EMV Chip
EMV chips are also gaining popularity in the United States. These chip and pin devices provide added protection to purchases – both online and in-store. Although an EMV chip isn’t a guarantee of safety vs. an old magnetic strip card, it is an extra layer of safeguarding that can make a real difference.
Related Article: Ten Ways to Stay Protected Against Credit Card Fraud