Watch out for suspicious emails, calls or text messages.
Every year, millions of Americans are subject to credit card scams and online fraud. Falling victim to card misuse can wreak havoc on your personal finances and can ruin your credit score.
While credit cards offer zero liability policies that protect you against fraudulent charges, there are some strategies you can use to protect your account from fraud in the first place.
How does credit card fraud work?
It’ll be easier to avoid credit card fraud if you know how it works in the first place. Here are a few ways your information could be compromised:
- Card-not-present fraud. This involves your name on card, card number and CCV number being used to make online transactions, where there is no need for a physical card, a PIN or a signature.
- Counterfeit card fraud. Fraudsters can get your credit card data through a method called skimming or they can buy it from black markets. Choosing a credit card with an EMV will make it harder to counterfeit.
- Card skimming. This is the process of stealing your credit card information with a normal transaction. To achieve this, fraudsters use card skimming devices, which are usually attached to an ATM or any other card reader. The updated version is called credit card shimming where scammers try to steal information from the EMV chip.
- Not-received fraud. This is when someone accesses your card before you do, such as through your mailbox when you’ve applied for a new card.
- Application fraud. In this case, someone might apply for a credit card in your name, using your personal details and then use it to make purchases and cash advances. This is often linked to further identity theft issues, as they would need to be able to provide enough documentation to actually get approved for a card in your name.
- Account takeover. Fraudsters call your bank and use your personal information like home address, SSN or even mother’s maiden name to pretend they are you. They can say your card has been lost and ask for a new card to be issued at a different location.
- Phishing. Scammers can lure you into providing your credit card information by posing as your bank or an authority. Telephone phishing is the most common, but email phishing is also used.
Six ways to avoid credit card fraud
Credit card fraud comes in many forms. Here are some strategies to protect your account.
1. Keep your credit card secure
Always make sure to cover the keypad when entering your PIN at the checkout or when withdrawing cash from an ATM. If you’ve lost your credit card, contact your bank immediately to cancel the card and get a new one issued as soon as possible.
2. Regularly review your statement
Your bank will usually contact you if they spot suspicious transactions on your account, but you may catch a fraudster early if you’re reviewing your statement. This is because they may test your account first by making a small transaction before making a big purchase. The sooner you spot any odd listings on your account and report them to your bank, the better.
3. Check your credit report
You should also monitor your financial history through your credit report. If you see any listings, such as credit card applications you didn’t make, contact the relevant card issuer and the credit reporting bureau immediately to investigate the issue and have it removed from your report.
4. Use secure websites
When you’re shopping online, look for https:// at the beginning of the website address instead of http://. This means that the website has added security and you’re less likely to be a victim of fraud.
You should also look at the website’s reviews to see if there is any evidence of negative feedback or poor reviews of products. If an item is offered for considerably less than the online retail price, you should also be wary as it’s likely to be a scam.
5. Be wary of suspicious emails, text messages and calls
The correspondence will vary, but a scam email or text message could be asking you to update your details, reporting an overdue account or flagging a fraudulent transaction. Messages claiming you’ve won a prize or competition are also common. So be extra cautious if you haven’t entered a competition. Don’t provide your personal details to an unfamiliar caller or in response to an unexpected text message.
If you receive an email or text that appears to be from your bank, always check the phone number and address that it’s from before responding. Don’t click on any links or download any attachments from any email. If you’re suspicious, don’t respond and contact your card issuer directly via the contact number listed on their website instead.
If you receive a call from someone who claims to be your bank and asks you to confirm your card information, don’t provide any information. Instead, contact your bank directly using the contact details listed on their website to find out if it was a legitimate call. You should be especially careful if the call is from an international or blocked number.
6. Notify your bank if your address or contact details change
If your residential details change, contact your bank to have your details updated so that any new cards or bank statements aren’t sent to your old address. You should also update your contact information if it changes so that your bank can contact you regarding a potentially fraudulent transaction on your account.
Who do I contact if I suspect that my credit card has been used fraudulently?
Depending on your circumstances, you have two options:
Contact your bank.
Call your credit card company as soon as reasonably possible. If you can’t manually freeze your credit card, your card issuer will.
- Contact your bank.
Change your password and PIN.
Log in to your online account and change your password. If possible, change your PIN as well. This can help you prevent further misuse of your credit card.
- Change your password and PIN.
Credit card fraud can be an overwhelming experience, but it’s important to remain calm and contact your card issuer as soon as possible. Also, be sure to avoid clicking on suspicious emails or answering suspicious calls that imitate your bank.