Protecting Yourself Against Credit Card Fraud

A credit card scam is a form of theft in which a criminal uses your credit card number to make fraudulent purchases. Criminals use numerous sneaky tactics to gain access to the credit cards of unsuspecting individuals.
 
Over the Internet, on the phone and even at a restaurant, con artists can use trickery or traditional purse snatching to get your credit cards. In the fight against credit card fraud, knowledge is the most important weapon to combat this agonizing and frustrating crime.

Credit Card Phishing Scams

Most often attempted over the Internet (but sometimes over the phone), phishing is a tactic that has flooded the inboxes of hundreds of thousands of personal e-mail accounts. In this scam, a thief uses various rouses to get you to hand over your credit card information so he may use it for online or mail-order purchases. Credit card specialists have dubbed this scam "phishing" because thieves are essentially placing baited hooks and fishing for credit card information.
 
Con artists may use a variety tricks when commiting phishing scams, with new twists being added frequently. One of the most common is when a criminal contacts you "on behalf" of your credit card company or bank. Either through e-mail or over the phone, the crook will cook up some excuse for validating your credit card information.
 
However, most reputable businesses have stated that they will never request this kind of information via phone or e-mail, so ignore these requests. If the e-mail appears legitimate, call your credit card company directly to validate the request.

Other Types of Credit Card Scams

Though phishing scams have received plenty of media lately, there are simpler (and more prevalent) types of credit card fraud. Here are a few of the criminals' favorites:
  • application fraud: Some thieves swipe credit card applications from your mailbox or trashcan to acquire shiny new cards in your name.

  • Internet hacking: Computer-savvy criminals can sometimes hack into sites and gain access to order forms that contain your credit card information.

  • skimming: Crooked merchants, waiters or other individuals with access to your card write down your credit card information when you use it for legitimate purchases. Sometimes a camera or camera phone is used to snap a quick shot of the card.

  • stealing your credit card: The easiest way to gain access to your credit card is by stealing your wallet or purse.

  • triangulation: You buy a cheap product online at an auction site or other merchant. The "seller" purchases the item with a stolen credit card and sends it directly to your address.

How to Avoid Credit Card Scams

Being cautious with your credit cards is an important step in ensuring you don't become a victim of credit card fraud. Here are some tips that credit card fraud specialists suggest to help you avoid credit card scams:
  • Be wary of online sellers who only accept money order or wire transfer.
  • Don't give your credit card information over the phone unless you initiated the call.
  • Look over each credit card statement to ensure all charges are valid.
  • Memorize your PIN and don't write it down where a thief can find it.
  • Never let anyone borrow your credit card.
  • Only make online purchases with reputable businesses that offer secure order forms.
  • Only carry credit cards that you use regularly.
  • Sign your credit cards as soon as you receive them (or write "See ID").
  • Shred all credit card applications that come through the mail.

How to Report Credit Card Fraud

If your card is lost or stolen, or you find fraudulent charges on your bill, contact your credit card company immediately. A toll-free number can usually be found on the back of the credit card, on monthly statements and the company's website. In most cases, you need to cancel your credit card and obtain a new one with a new number.
 
Under U.S. law, you have no responsibility for unauthorized charges after you have reported the card lost or stolen. Most banks will also not hold you responsible for fraudulent charges made prior to fraud claim, provided their investigation concludes your claim is legitimate. If caught, credit card thieves can receive between one and ten years in prison, depending on the severity of the case.
 
Resources
 
Federal Trade Commission (n.d.) Secured credit card marketing scams. Retrieved March 17, 2008, from the Federal Trade Commission Web site.
 
Georgia State Government (n.d.) Georgia consumer's guide to: identity theft. Retrieved March 17, 2008, from the Georgia State Government Web site.
 
Lanford, Audri and Jim (June 9, 2004). Credit card fraud. Retrieved March 17, 2008, from the Scambusters Web site.
 
Sylvester, Oliver (n.d.) Types of credit card fraud. Retrieved March 17, 2008 from the Transnational Credit Card Fraud Web site.