In a simple term, Credit card fraud is the unauthorized access of another person’s payment card (i.e. credit card or debit card) or the payment card information to make purchases or obtain unauthorized funds from a victim’s account.
Staying vigilant about protecting your personal information can also greatly reduce the risk of credit or debit card theft or fraud. While credit and debit cards have built-in strong protections, the first line of defense really starts with the cardholder. Also, knowing how fraud happens is a good way to take steps to prevent it.
Various Techniques Used For The Credit Card Frauds:
1. Lost Or Stolen Card
In many cases, people lose their wallet and so does the credit card and many times it gets stolen. Here, your credit card will be taken from your possession, either through theft or because you might have lost it. The criminals who get their hands on your credit card will use it for shopping or for various payments. It is difficult to do this through machines, as in most of the credit cards they will require a pin number. However, it is easy enough to use a found or stolen card to make online purchases.
What To Do If The Card Gets Lost Or Stolen:
- Keep your credit card separate from your wallet where you carry cash. This will minimize the risk of card getting lost when you lose your wallet.
- Credit card lost should be reported and blocked immediately as soon as you realize they are missing to minimize any damages or fraud.
2. Credit Card Skimming / Counterfeit Card Fraud
Credit Card Skimming is done with a device usually placed with a regular credit card processing terminal. The scammer uses that device to captures or steals your credit card information when we swipe it or hand them to a cashier to fund transactions for goods or services. Once your credit card information has been stolen, the scammers can use it to create fully functional fraudulent credit cards. Now, fraudsters can simply swipe this card at payment terminals against the goods or services purchased.
The places like Gas stations and ATMs have been a long time favorite for scammers to place skimming devices. More recently, scammers have started placing skimmers over the credit card readers in self-checkout lanes at major retailers. Sometimes cashiers and waitresses have been recruited to be part of this scam. They will silently swipe your credit card through a handheld skimming device when you’re not looking.
How to Avoid Being The Victim Of Credit Card Skimming:
- Inspect credit card readers before using them, especially at gas stations, ATMs, and self-checkout lanes.
- Avoid using any credit card reader that looks like it’s been tampered with.
- Cover your hand when you’re entering your PIN as most of the time scammers place the cameras near skimming devices to capture your PIN.
- Check your credit and debit card accounts closely. If you spot any charges you didn’t make, contact your credit card issuer right away.
3. Free Wi-Fi Trap
Free Wi-Fi is everyone’s favorite. Wherever we go, in the malls, coffee shops or shopping centers, we look for the available Wi-Fi connection and connect to the first open Wi-Fi hotspot we find. People do it as an effort to save data on their phone or to avoid paying for the paid Wi-Fi. But, this may not be a safe choice. Credit card thieves are taking advantage of this by setting up a free Wi-Fi hotspot that doesn’t require a password. Once you’re connected, the hackers or scammer can access any information you send over the network virtually.
If you log into your online bank or check your credit card balance, the scammer can get your username and password. The scammer can steal all your credit card and personal information if you place an order from your mobile. They can sometimes even access information in your browser history or decrypt information sent over through secure websites.
How to Avoid Being The Victim Of Free Wi-Fi Trap:
- Confirm the name of the network with an employee before connecting in a coffee shop or any other public places.
- Don’t access mobile or net banking while on a public network. I would prefer to no to use any personal account on such networks.
4. Fake Call Or Email
The scammer or the credit card thieves often make a fake call to get your credit card information. They could make a call either for offering you the best benefit on your credit card or to request the credit card information to update in their system.
Sometimes, scammers make a call or send an email to give a warning that the cardholder must update their personal information before they can receive their new chip card. Replying to such emails with personal information, even clicking a link and entering personal information can give the scammer enough information to commit identity theft.
How To Avoid Being The Victim of Fake Call Or Email:
- Always remember that your credit card issuer will not ask you to update information over email.
- Credit card issuers send new chip credit cards automatically without any action on your part.
- Contact your card issuer’s customer service using the number on the back of your current credit card for questions.
- Don’t click on links in emails, even if they look like they come from your credit card issuer. Visit your credit card issuer online only by going directly to the card issuer’s website.
- Add your number to the National Do Not Call Registry
- Hang up the phone immediately without speaking if you find it suspicious.
- Don’t give out or confirm your personal or financial information on any phone call that you didn’t initiate. Scammers have often obtained some credit card information and need to confirm the accuracy or get just one more piece of information from you, like a PIN or security code.
5. Call Informing Potential Fraud On Your Account
Here, the scammer will pretend to be the someone from your credit card issuer’s fraud department. They say there has been suspicious activity on your account and need some information from you to verify whether your account has been compromised. Ironically, scammers can use this type of phone call to commit real fraud.
Scammers may already have some information like your name, address, or account number. They use this personal information to subtly convince you that they’re your credit card issuer. They’re calling to get additional information they can use to commit fraud. For example, they might be looking for the security code on the back of your credit card, PIN number, etc.
How to Avoid Being The Victim Of Credit Card Fraud:
- Your credit card issuer may really call you if fraud is suspected on your account. However, rather than give out your personal information on call you should hang up. Call the number on the back of your credit card to be sure you’re really speaking with your credit card issuer.
- Don’t give out your credit card information on any call you didn’t initiate or suspect.
- Continuously monitor your account activity online or via a smartphone app so you are aware of your account activity.
- Report unauthorized charges to your credit card issuer right away. You can be issued a new credit card if your account has been compromised.
Different Ways To Prevent Yourself From The Credit Card Fraud:
Even as prevalent as fraud has become, there are plenty of methods you can use to help protect yourself. Here are some easy ways to reduce your risk of falling victim to credit card fraud. Use these general best practices for credit card safety, which you should be implementing daily to protect yourself from fraud:
Best Practises To Safeguard Yourself From Credit Card Theft At Home
- Never lend your credit card to anyone.
- Never put your card number on a paper, credit card or somewhere accessible to other people.
- Keep all receipts in a safe place and destroy or shred all carbon copies and incorrect receipts.
- Pay attention and keep it in view whenever you hand your card over to pay at payment terminals of shopping malls or a grocery shop.
- Check your credit card bill statements as soon as you get them, and reconcile your card accounts every month the same way you would reconcile your checking account. If you find any suspicious activity on your card, report immediately.
- Keep your payment card separate from your cash. This will protect your credit card if your wallet is stolen.
- Do not share your card number over the phone unless you initiated the transaction and you know the company is reputable. And, never ever share your PIN to anyone.
Best Practises To Safeguard Yourself From Credit Card Theft Online
- It is advisable to keep your anti-virus software up to date to prevent hacking.
- Only use your card for purchases on websites you trust and make sure to check the website address before entering the credit card information. The website should be trusted one and address should start with https:/ and not the http:/
- Do not click links in emails, especially those from any company or individual you don’t recognize.
- Never enter your card information (or social security number, etc.) in response to an email or via an emailed link. Always go directly to the company’s site instead of by typing the address yourself.
- Fee Wi-Fi sounds great but does not enter personal information or credit card information if you’re on a public computer or public or free Wi-Fi network.
There are a lot more tricks being used by the credit card hacker or scammers to get your credit card information and do the fraudulent activity. Most of the other tricks are difficult and rarely happens as banks and credit card companies are improving their security measures from time to time. What’s your view on Credit Card Frauds? Do you think cardholders do enough to safeguard their data and themselves from fraud?