Credit Card Fraud! Be careful of your credit
Cardholders need to understand the importance and procedure for reporting credit card fraud.
In addition to reporting credit card fraud, consumers need to be aware of the techniques and gimmicks used to by identity thieves.
How does credit card fraud occur?
Credit card fraud occurs when a person knowingly attempts to use a credit card or credit card information which does not belong to them to purchase merchandise or services. According to the latest credit card fraud statistics, approximately 42% of all cases reported to a Federal Trade Commission database, the Consumer Sentinel, were related to credit card fraud. The following list contains some interesting statistics regarding to credit card fraud.
- According to a recent credit card fraud report, nearly 10 percent of Americans have been targeted in credit card scams.
- 5% of Americans report, that despite not losing their credit cards, they have had unauthorized
charges billed to their accounts.
- 1.2 million consumers sustained financial losses because of scams in one year time period from May 2004 to May of 2005.
How do identity thieves obtain my credit card information?
Identity thieves use a variety of manipulative and deceitful techniques to swindle credit card holders and business. The scams and techniques favored by con artists are outlines below.
Skimming:
- Skimming occurs when an employee steals a customer's credit card information during or after they have presented it for a legitimate purpose. The employee scans the credit card through a “skimmer” that records the account information which can later be retrieved from the device.
- To protect yourself from becoming the victim of a skimmer there are a few steps you should follow. First, be very diligent as to who handles your card. Never let anyone take your card out of sight and always keep an eye on your card while completing
the transaction. If possible, use cards that have low credit limits. This limits the amount a skimmer has access to. Protect any pins and numbers that may be associated with your credit cards.
Phishing:
- This technique is highly deceptive and involves luring unsuspecting consumers to phony internet sites. These scammers usually send a hoax official email to the victim, and claim that there has been a problem with one of the individual's accounts and instruct the person to follow a link. They are then asked to confirm their identity by verifying their account and personal information.
- Protecting yourself from phishing scams is relatively simple. If you receive an email stating there is a problem with the account, contact the creditor immediately via the telephone number located on the back of your credit card or bill.
Pharming:
- This method of credit card fraud is also the most difficult to spot
and prevent. Pharming is a term used when individual redirects traffic from a legitimate website to another that pretends to be the original site. Thieves are then able to obtain the account holders sign in information as the card holder logs in.
- It is very difficult for those who are not computer savvy to identify when they have been a victim of pharming. Pharming may be prevented if a user accesses their credit card homepage by using a HTTPS address instead of the common HTTP address.
Dumpster Diving:
What should you do if you suspect you are a victim of credit card fraud?
If you believe that you are a victim
of credit card you should immediately call your credit card company. Reporting credit card fraud immediately is your best way to limit any monetary damages you may sustain. A follow up letter should also be sent to the credit card company. Include any information that is pertinent to the account such as the date the card was lost or stolen, your account number, the person you spoke with when you reported your card lost and if you noticed any fraudulent charges on your account.
Know that you may be responsible for the first $50 worth of fraudulent charges if you made your report in a timely manner. If you waited a substantial amount of time before reporting credit card fraud, you may be held liable for an additional amount. As credit card fraud statistics rise, vigilance is essential to prevent fraud.
Some credit card scams run to the tune of several millions of dollars. Therefore as a credit card user you have to take all the necessary precautions in ensuring the safety If
you suspect that you are victimized you must immediately seek legal actions.
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