Last updated on November 27th, 2020
In 2018 the United States suffered $9.1 billion dollars in payment card fraud, up from $8.6 billion in 2017 and $7.7 billion in 2016. This trajectory should raise red flags to anyone who regularly uses credit cards to make purchases as thieves are getting increasingly clever at devising new ways to steal sensitive information from cardholders. The best way for anyone to avoid having their credit card information stolen is to take a series of preventative measures against such practices and to be vigilant about their personal information. Below are steps that every cardholder should take to avoid being a victim of credit card fraud.
How to Prevent In-Person Fraud
Check for Skimmers: Credit card skimmers are devices placed over the credit card swipe that capture someone’s credit card information while they are making a transaction. Many thieves place these skimmers at gas stations and ATMs on top of credit card readers hoping to collect as many cardholders’ credit information, so they can use the data to make cloned physical credit cards or use them for online purchases. Skimmers often protrude from card swipes more than normal, so detecting one is as easy as jiggling the credit card swipe to make sure it doesn’t come loose at all.
Use “Zero Liability” Credit Cards: Many credit card issuers have zero fraud liability policies where cardholders won’t be on the hook for any unauthorized purchases, and such a feature should always be considered when shopping for a card.
Check Credit Card Statements Regularly: Often before a thief uses a stolen credit card for a large purchase they’ll make tiny, unnoticeable purchases to make sure it works. Checking credit card billing statements regularly ensures that one small fraudulent purchase doesn’t turn into a series of expensive purchases.
Use a Shredder: If a cardholder receives a paper copy of their credit card statement, they should immediately shred it once they’ve reconciled the card’s charges. These statements typically may feature a credit card number or other account information, which can then be used to commit fraud.
Never Give Personal Information to Callers: A common scam is for cardholders to receive a telephone call saying they’ve won a prize and that they need to give their card information over the phone to cover the cost of shipping, but anyone who receives this call should immediately hang up and document the phone number where the call came from and report it.
Carry as Few Cards as Possible: People lose wallets and purses on a regular basis, and the best way to avoid having fraud committed on credit and debit cards is to leave the house with only necessary credit cards. Carrying less plastic is the easiest way to limit a cardholder’s liability for fraudulent activity.
Make Sure Your Card Has an EMV Chip: The standard method for storing data on a credit card used to be the magnetic strip, which contained unchanged data that can be easily exploited by scammers. Understanding this, credit card companies have pushed for EMV chips which create unique transaction codes which can’t be used more than once. Cardholders should make sure all their cards have an EMV chip on them.
Notify Card Companies If You’re Traveling Abroad: When a cardholder lives in the United States and one of their credit cards is used abroad it usually sets off a red flag to their credit card companies. Notifying the card issuers will not only prevent them from blocking these cards from being used, but they’ll also be prepared to handle any fraudulent activity if it were to arise.
How to Prevent Online Fraud
Don’t Store Credit Card Numbers Online: Online shopping brings convenience, but it also brings increased chances of fraud. It’s a good idea for cardholders to not save their credit cards to their online shopping profiles, because if their databases get hacked there’s a good chance that all their customers’ credit card information will also be compromised.
Never Buy Anything Over Public Wi-Fi: One of the many benefits of modern society is the fact that free public Wi-Fi is easily accessible for anyone hoping to save data, but there are pitfalls. Hackers can set up innocent-looking hotspots in high traffic places, and they can access any information cardholders send over their network, including login information for online banks and credit card information for mobile purchases. Even connecting to a legitimate public Wi-Fi router can be risky as hackers can intercept information if they’re on the same network as the cardholder.
Use Strong Passwords and Two-Factor Authentication: Cardholders who use online banking must use strong passwords to prevent hackers from accessing their accounts. The best practice is to avoid using consecutive numbers, pet’s names, birthdates, maiden names, and any other easily guessable phrases related to someone specifically. Two-Factor authentication should also be strongly considered, as cardholders logging into their online banking profiles can only access them by logging in with their username and password, and then entering a code sent to their cell phones.
Know the Seller’s Reputation: For every major website with beefed up security features, there are multiple smaller vendors with great products who are trying to make a name for themselves. The key for doing business with the latter without having credit card information compromised is checking the seller’s reputation and making sure they have the right security protocols in place to protect cardholders’ information. Sellers with https:// in their URL and an icon of a lock next to it should have the necessary security measures in place to protect the personal information of their customers.
Beware of All Links: One of the most common ways hackers steal users’ personal information is by phishing – a method where thieves disguise themselves as legitimate businesses and then reach out to consumers so they can get their personal information. Phishing links can come from both email and social media, and it’s advised that cardholders never ever respond to inquiries from these forms of communication directly. If anyone gets an email mentioning suspicious activity and to click on a link to confirm their identity, the best practice is to ignore the email and contact the company’s customer service directly.
Update Virus Software: A significant chunk of credit card fraud is committed online using spyware, and every year hackers steal billions of dollars from individual cardholders and corporations. Credit card users should always make sure they’re protecting their computers with the latest antispyware software, as well as a robust firewall and antivirus protection to minimize their chances of having their personal information stolen.
What to Do If Your Credit Card Information Is Lost or Stolen
Call Your Credit Card Issuer to Lock/Cancel Your Card: Once a cardholder has received a fraud alert on their account, the first thing they should do is contact the credit card issuer so they can detail the fraudulent charges and cancel the card. If fraudulent charges were made to the card it’s not uncommon for the issuer to send the cardholder an affidavit confirming all the unauthorized charges.
Sign Up for a Credit Monitoring Service: Cardholders who have fallen victim to credit card fraud or identity theft are advised to sign up for a credit monitoring service, which can track their credit scores and alert them to further fraud. It’s also not uncommon for victims of data breaches to receive a free year of identity theft and credit monitoring.
Check Your Credit Rating: Unethical behavior with a cardholder’s credit card data may not end with just a single fraudulent charge, which is why victims of fraud should always check their credit rating to make sure additional accounts weren’t opened up with their stolen information.
Update Your AutoPay Account with a New Credit Card: Once the fraud claims have been sorted out a new card has been received, cardholders should update any accounts set to AutoPay with the new card. Many consumers have AutoPay set up for their cell phone and streaming service bills, and it is wise to update the payment method for these services quickly before they get cut off for lack of payment.