Protect Yourself From Credit Card Fraud

“And though there are no definitive global figures on losses from credit card fraud – most financial institutions are tight-lipped on the subject – an FBI report from 2005 indicated that credit cards represented the majority of the total $315 billion U.S. financial fraud loss for that year, while a recent European study found that more than 22 million adults fell victim to credit card scams in 2006. Figures from the Banque de France, the country’s central bank, showed a credit card fraud loss of €236 million, or $319 million, for 2005” reports the New York Times.

In the USA “Credit/debit card fraud made up 9.0% of referred complaints” referred to the Internet Fraud Complaint Centre in 2008.

In 2003 there was no reported online banking fraud in Britain. There was £33.5 million, or $66.4 million.

Card Fraud was £428 million in 2006, states the New York Times.

A study by the Australian Bureau of Statistics has revealed that in 2007 half a million people fell victim to some form of fraud, costing the country nearly AU$1 billion.

Credit Card Fraud affected 280,000 Australians in 2006-2007.

“Overall, 32 per cent of businesses had been the victim of online credit card fraud, with 51 per cent of traders experiencing more than one incident over the two years” Australian Institute of Criminology, in March 2005.

“The increase in Internet fraud could be expected when you look at how many more businesses are accepting online transactions,” said Jemma Smith, a spokeswoman APACS (recently renamed UK Payments Administration Ltd) pacs, the British trade body that represents payment institutions.

“The problem is that the criminals are targeting the customers more than the technology. It is not about hacking into computers as much as it is about tricking users into revealing their card or account details” said Ms. Smith.

“That is why opening an unsolicited e-mail is like opening the front door of your home to a stranger” she said.

Internet credit card fraud has risen faster than overall credit card fraud.

Using a secure internet site may be more secure than giving your card to a waiter at your favourite restaurant. Credit card frauds from cell phones occur at a higher rate than on the internet.

Types of Credit Card Fraud

Credit Card Fraud falls into a number of broad categories:

• Lost/Stolen Card – An existing card is lost or stolen and used without the card holders consent or authority.
• Card Never Received – During delivery from the financial institution the card has been intercepted (stolen) and used before it was received by the customer.
• Fraudulent Application – A card has been applied for under a fictitious or fraudulent identity perhaps using stolen identity or false information.
• Counterfeit/Skimming – An altered or illegally reproduced card using a replicated or altered magnetic strip or false card front. Skimming describes the process in which a device is used to copy the magnetic stripe encoding off of a card.
• Card Not Present (CNP) - the use of account information including pseudo account information without the physical card being involved, via the phone, mail, Internet etc. without the authority of the cardholder. This category also includes fraud where a card should normally be present (eg: in a retail transaction ) but a merchant has chosen to accept the transaction based on a card number only and it turns out to be a fraudulent transaction.

In Britain CNP fraud increased by 16 percent in 2006 to £212.6 million – about half of all card fraud, states the New York Times.

• Other fraudulent techniques include using imprints of cards at merchants, the illegal use of card details, such as by a fraudulent change of address request for the reissue of a card falsely claimed lost or stolen.

 

How To Protect Yourself from Credit Card Fraud

First and foremost, be cautious, and use common sense.

Treat you cards as though they were cash. You don’t leave easy access to your cash, so don’t leave the PIN numbers or account details lying around for easy access of criminals.

The FBI recommends you keep a list of your card details in a secure location so if one is stolen you can immediately report it to the correct Institution. However, Conexus.ca advises “Never write down secret identification codes and do not choose easy-to-guess passwords”

The Federal Bureau of investigation (FBI) gives the following advice on using credit cards on the internet;

• Don’t give out your credit card number(s) online unless the site is a secure and reputable site. Sometimes a tiny icon of a padlock appears to symbolize a higher level of security to transmit data. This icon is not a guarantee of a secure site, but might provide you some assurance.
• Don’t trust a site just because it claims to be secure.
• Before using the site, check out the security/encryption software it uses.
• Make sure you are purchasing merchandise from a reputable source.
• Do your homework on the individual or company to ensure that they are legitimate.
• Try to obtain a physical address rather than merely a post office box and a phone number, call the seller to see if the number is correct and working.
• Send them an e-mail to see if they have an active e-mail address and be wary of sellers who use free e-mail services where a credit card wasn’t required to open the account.
• Consider not purchasing from sellers who won’t provide you with this type of information.
• Check with the Better Business Bureau from the seller’s area.
• Check out other web sites regarding this person/company.
• Don’t judge a person/company by their web site.
• Be cautious when responding to special offers (especially through unsolicited e-mail).
• Be cautious when dealing with individuals/companies from outside your own country.
• The safest way to purchase items via the Internet is by credit card because you can often dispute the charges if something is wrong.
• Make sure the transaction is secure when you electronically send your credit card numbers.

The following additional advice may help protect against offline Credit Card Fraud:

Sign the signature panel on your credit cards immediately.

Keep a close eye on your credit card when you use it, if you have to hand it over – to a waiter for example- make sure you get it back quickly. If possible, keep the card visible at all times.

Never lend a credit card to anyone.

When changing address notify your issuing institution IN ADVANCE.

Never give your card details over the phone to an unsolicited call unless you know the company well. A legitimate company will not call to request credit card details.

Never respond to email requests for your credit details or account password information.

Destroy any credit card applications received in the mail.

Never leave PIN number records near your card or near a record of the card number, or leave card receipts lying around as this could reveal your account numbers.

Shield your credit card number when in public so as to prevent Shoulder surfing, that is when a fraudster stands near a cardholder at an ATM machine to copy a pin, or to prevent someone capturing your card details with a cell phone or camera.

Treat your credit card like a cheque book. Reconcile your receipts and charges.

Destroy any unnecessary receipt or copy duplicates of card numbers, for example carbon duplicates.

Never write your card number out in a public place or give the number over the phone in a public place.

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