Credit Card Fraud & Tips To Protect Yourself

cardsWhen someone steals your personal information, such as address, phone number, account information, social security number, etc., it leads to identity theft. They use this information to open various lines of credit in your name, they could possibly take out a mortgage, secure credit cards and run them up, or even buy a car.

Credit card fraud is when someone gains access to your open credit card account and then uses it in order to buy items, or indulge in other illegal behavior. It costs credit card companies millions every year, and while the consumer isn’t responsible for it there is long term damage. The perpetrator still has your personal information, and could repeat the process ad nauseam. It can also take quite some time to clear up your credit score, and the other issues that come with credit card fraud.

However, it is far worse in situations of identity theft, so when it comes to credit card fraud your involvement should end as soon as you report it to your credit card company. As soon as you realize your card or information has been stolen you must report it.

The number of cases has risen over the last 5 years, however, you can take steps to protect yourself from credit card fraud and identity theft.

Sign your credit card as soon as it arrives, and never let it out of your sight. Do not give your credit card to anyone.

Checkout ABC’s Dan Harris’ piece on cards with chips.

When you are asked to provide personal information consider who is asking for it and what it will be used for. That includes basic information like your name, address, phone number and date of birth. Extend that to requests for account numbers and social security numbers.

If you aren’t the initiator of the interaction be wary. Con artists rely on their charm and persuasiveness to take advantage of others, so they will say anything to get the information that they want. Do not respond to emails, phone calls or text message seeking your credit card information.

This is especially important when you are ordering over the internet, by phone or through a catalogue. You will more than likely be asked for the three-digit security code on the back of your card. It is what merchants use to prevent fraud and verify that the card itself is in the possession of the person placing the order. If you’re dealing with a reputable brand then you should feel comfortable providing this security code, but be aware of who you give this number to. Ensure the website is secure.

Another way to ensure that you are extremely safe is to use a shredder.  Shredding all of your documents that contain personal information is an excellent way to ensure it is difficult for anyone to gain access to your personal information. Be sure to shred those pesky credit card applications that arrive, too.

Use a secured mailbox. Consider the amount of information that is sitting in your mailbox on a daily basis- checks, credit card bills, plenty of sensitive information. Another way to combat this is by setting all of your bills to electronic. You don’t need to worry about personal information in your mailbox or dumpster diving if all of your personal information is coming to you online.

If receiving your bills electronically is wise, then paying them electronically is just common sense. It saves you time, you don’t need to buy envelopes and stamps and you don’t need to worry about sending checks through the mail.

When creating your password don’t pick anything involving birthdays, family names, or other information that is easy to discover. It’s important to create strong passwords and the majority of websites will give you an idea of just how strong your password is when you create it. The best way to create a strong password is to include both upper and lowercase letters, as well as including numbers in the middle. The longer you make your password the harder it will be to crack. Change your passwords regularly, too, and don’t use the same password for every website. In the event that someone does crack it they would then have access to everything.

Keep your PIN number safe. They’re as common as passwords are now, so you will use it at the ATM, at payment points and sometimes even websites are requesting them in a bid to prevent fraud. Make sure you memorize all of your PIN numbers and passwords. Don’t write them down, do not carry them in your wallet and do not save them on your computer. Do not send your information via email, or text.

Don’t carry all of your personal information in your wallet. You don’t need your social security card in your wallet, and you don’t need every form of identification. It might sound like a hassle to take limited cards out, and only carry the credit cards you need, however it is much less hassle than dealing with credit card fraud or identity theft.

Everyone is always on their cell phone, but remember where you are. If you’re talking on your phone in public, then everyone can hear you- so don’t share personal information over the phone.

Make sure you check your credit card charges when each bill comes in. Beyond that, check your credit score regularly. Federal law entitles you to at least one free credit report on an annual basis. There are some states that require even more than one free report a year.

You can also subscribe to a credit monitoring service from the credit card issuer or a credit bureau- they will alert you via text or email if there is a change to your credit score.

The tips above are meant to help you protect yourself from credit card fraud, while it may seem like an effort- it will save you both time and money in the long run.