How to Protect Yourself from Credit Card Fraud

Today, almost everyone has a credit card. Reportedly, 7 in 10 Americans have at least one credit card. According to TransUnion, a credit-data agency, in the third quarter of 2021, the number of new cards issued hit an all-time high of 20.1 million.

The reach and popularity of credit cards have made it a major target of fraudsters. The most “straightforward” credit card scheme is theft. When a new card gets delivered to your mailbox, someone may steal the card. Similarly, if you lose your card, an unscrupulous person may get his hands on it and take advantage of your credit. Other fraud schemes include skimming, identity theft, phishing, vishing, and card, not present fraud.

Let’s explain these in a little more detail

Card ID theft happens when the fraudster comes to know the details of your card and tries to use those details to charge it.

Phishing is a scheme by which the scammer takes credit card details from unsuspecting customers. It’s an online system wherein the perpetrator, posing as a legitimate entity, captures your credit card number, expiration date, and CVV number (security code).

Vishing (voice phishing) is similar, but here someone pretending to be from the credit card company calls you to get more information about your card.

Card, not present (CNP) fraud happens when the perpetrator uses your CVV number to pretend he is in possession of your card. Merchants use the CVV number when you make online purchases to verify that you are in possession of your card. This verification is not required for in-store purchases.

But if the fraudster somehow finds out your credit card number and expiration date, he can try to find the three-digit CVV number by trying various number combinations, even if that means he tries a thousand different combinations before he succeeds.

Credit card skimming is a fraud scheme in which a modified POS (point of service) machine is used to capture your card details. The details are then used to create a duplicate card that can be used to charge your card. The fraudster who wants to withdraw money using your card may even install a spy camera in an ATM to capture your PIN.

Protecting Yourself from Fraud Schemes

There are precautions you can take to protect yourself from these schemes. Here are some of them:

Never Share Your Credit Card Details

A legitimate representative from a credit card company will never call you and ask for your credit card number, expiration date, or CVV number as part of any verification process.

Also, you should never divulge this information to anyone online, even if you receive an email. Phishing perpetrators will send you an email with a link to click to take you to your credit card’s website. However, this is usually a fake website designed to look similar to the real website to fool you into giving your credit card details.

Always ensure that you type in your bank or credit union’s URL on the address bar of your browser, rather than clicking a link in an email. You should look at the address bar and ensure that the browser verifies the site’s security certificate. In Chrome, it should say “Secure” with a green padlock in the address bar. Without ensuring the authenticity of the site, do not put in your credit card details.

Keep Checking Your Account

Rather than checking your monthly statement for any anomalies, you should check your credit card account online once a week to ensure there are no unusual transactions. Even small charges also shouldn’t escape your scrutiny. Small charges on your account may well be an indicator that someone is trying to test your CVV number. Be vigilant and ensure to inform your credit card company about any unusual charge you find.

Never Let Your Card Go out of Your Sight

When you are giving your card for payment, ensure that it is still in sight. Do not give your PIN to anyone; rather, insist on typing your PIN yourself on the POS machine. It may be difficult for you to check whether the POS device used by the merchant is genuine or can skim your card. But if you think anything unusual is happening, take your card back.

Check Your Credit Report

You are entitled to a free credit report every year from Equifax, TransUnion, and Experian through AnnualCreditReport.com. You can use this to verify if your identity has been used by someone else to make transactions. The credit report will give you detailed evidence of any fraudulent activities in your name.

To protect yourself better, you can initiate a fraud alert with your credit bureau, so that the banks or creditors are informed every time a credit request comes in your name. You need to initiate the fraud alert with only one of the agencies; the other two will receive automatic notifications.

Check Where You Swipe Your Card

There are many skimming methods to steal your card information. Some schemers attach a skimming device inconspicuously to the ATM. Gas stations and department stores may also have compromised POS machines with the skimmer placed on them.

Usually, the skimmer on a POS machine can be detected if you look carefully for any unusual projecting parts. There are also some YouTube videos that can help you identify a skimmer at any POS.

You might say it pays to be paranoid in today’s world full of crooks and thieves. In the case of credit cards, the main issue is their prevalence. Almost 72% of people have them, but only a fraction understand the technology and its vulnerabilities. If you are careful with your credit card, you can avoid scams easily.