Credit Card Fraud: What Is It and How To Protect Yourself Against It

Posted on by IDStrong User in Identity Theft September 18, 2020

Credit card fraud is a fact of life, and most Americans have experienced it or know someone who has. Technology has brought with it, new ways for criminals to snoop, and flee with our information. Identity theft is another real concern related to data breaches at credit card and credit monitoring companies. It’s hard to feel safe these days. There are things you can do, however, to keep your credit cards as secure as possible.

What is Credit Card Fraud

Credit card fraud is the illegal, unauthorized use of your credit cards or credit card numbers. Usually, this appears as charges on your account that you did not initiate. Sometimes criminals use credit cards to take out cash withdrawals. Often credit card scams are linked to identity theft. Credit card scams also apply to ACH payments, direct deposits, and prepayment cards.

How Does Credit Card Fraud Happen

There are dozens of ways that credit card fraud happens. Criminals are getting cleverer by the day. 

Some of the more common ways are:

  • You visit a website that is hacked with malware and make a purchase. The hackers now have all they need to charge things on your credit card.

  • Another common technique is that criminals install malware on a point-of-sale device at a store, like in the Target data breach.

  • If a bank, restaurant, or credit card company experiences a breach, your account information can be obtained that way also. Pretty much anywhere you pay with a credit card may be vulnerable to hacking.

  • Skimming is another way thieves grab your credit card details. They install a small device on gas pumps or ATMs which collect your information as you swipe and punch in your codes.

  • Phishing emails is another way your credit card data may be stolen. Never click links in emails and don’t trust they came from a reputable source. Criminals are very good at making them look legitimate.

  • Vishing is a form of phishing, but it’s a phone scam where someone calls you to verify your identity or get you to donate, make a payment, etc. and they collect your credit card details that way and then they are off to make purchases. Sometimes they offer you a free gift, and all you have to do is pay the shipping and handling. Do not fall for it; it’s a scam. 

Of course, the old fashion way you may become a victim of credit card fraud is if you lose your wallet or it is stolen. Regardless of how they get their hands on your credit card, you must take quick action if it happens to you to prevent a data breach.

How To Prevent Credit Card Fraud

It is impossible to prevent credit card scams completely, but you can take steps to reduce the possibility and prevent credit card scams which can lead to identity theft and other serious consequences.

  • Only carry the cards you need when you visit shopping locations or restaurants.

  • Never give out your credit card number to anyone who calls you.

  • Do not click links or download attachments in email.

  • When buying online, only purchase from reputable stores with a secure connection (https).

  • Never sign a blank credit card receipt.

  • Save all your receipts and compare them with your monthly credit card statement. Review your statement immediately upon receipt to report any unauthorized activity quickly.

  • Store PINs separate from debit or credit cards. 

  • Never lend your credit cards to someone else, even your kids. 

  • Be cautious of buying from someone in another country or from a flashy website that looks legitimate. 

  • Stay away from any deals that sound too good to be true, they are. 

  • Sign up for credit monitoring with or another company to stay protected.

  • Before getting gas or using an ATM, check for credit card skimmers.

  • Shred paperwork which contains your credit card number.

  • Make a list of all your cards and the bank’s contact information, so you will have it all ready if something happens. 

  • Change your online access password to credit card accounts often. 

  • Keep your computer and other devices updated with the most recent patches and antivirus software. 

How To Report Credit Card Fraud

If you fall victim to a credit card fraudster, you need to take the following steps as soon as possible.

  • Report your lost or stolen cards immediately to the bank which issued them. Use the 800-number on the back of the card to report the fraud.

  • Have the cards canceled and reissued.

  • Change your online passwords immediately to something very complex.

  • Add a fraud alert to your credit report. 

  • Contact the fraud department to dispute the charges so you won’t be responsible for paying them.

After your credit card is stolen, the thieves may attempt to get even more out of you through phishing emails or additional calls. Be on the lookout for anything suspicious, and never pay for anything you did not expressly order.

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