Scam Alert: Credit Card Fraud

Ease of access doesn’t mean more secure. In our digital era, we have swapped wads of money for a slim piece of plastic. While swiping a credit card is definitely easier than dishing out exact change for a transaction, it doesn’t eliminate the risk of fraud. At least 63% of U.S. credit cardholders have been victims of fraud. Here’s what to know about credit card fraud.

What Is Credit Card Fraud?

Credit card fraud is the unauthorized use of a person’s credit card to make purchases. One second you are buying groceries, and then the next thing you know, you can have hundreds of dollars racked up in merchandise and retailers you never heard of.

Types of Fraud

  • Swiping the physical card. Bumping shoulders with the wrong person can result in your credit card being stolen. Once they have the card, they can make as many unauthorized purchases as they want until you catch the fraud. Credit cards can also be intercepted in the mailbox.
  • Creating a fake account. If a fraudster collects enough data about you, they can use this information to open a fraudulent account by filling out various credit card applications. Using your credentials, they can max out as many credit cards as financial institutions allow, while hurting your credit score in the process.
  • Account takeover. In a digital age, you don’t always need a physical credit card to make a purchase. Instead, fraudsters can get ahold of your account number, security number, and expiration date and make online purchases. Once they get a hold of information like this, they will likely change your PIN, so it becomes more difficult for the original cardholder to stop the fraud.
  • Card skimming. There are devices that “skim” your credit card to capture the information. These devices are installed on point-of-sale terminals at retail stores, gas stations, ATMs, and more. From there, the scammer sells the information or uses it themselves.

How To Avoid It

The best way to defend against credit card fraud is to know where your credit card is at all times and monitor your account. You can also ask your financial institution if there is fraud protection on your account. Usually, if there is, you can stop transactions on your card from your phone. As a bonus, your financial institution may stop a transaction if they think it is fraudulent and send you a text. Note: Verify any texts you receive from your financial institution before you click on ANY links. Other ways to protect yourself from credit card fraud are:

  1. Never provide your personal information to anyone.
  2. Never click or respond to emails, texts, or phone calls that you are not expecting, especially if they are requesting personal information.
  3. When you swipe your credit card, shield your PIN and account number from nearby bystanders and store employees.
  4. Don’t let your mail sit in your mailbox for an extended amount of time.
  5. Set up account alerts through your financial institution.
  6. Use secure payment methods when shopping online. Only use websites that have “https” at the beginning of the URL.
  7. Check if any parts of a point-of-sale terminal are loose or wiggle. This can be a sign there is a card skimmer attached.

Credit card fraud is the fastest-growing type of identity theft that leads to more and more fraud every year. Stay vigilant and protect your accounts.