Credit Card Fraud: Avoiding Credit Card Fraud 

As credit cards have quickly become the preferred payment method for many consumers, the number of fraud cases has steadily increased. Credit card fraud is a problem that continues to haunt credit card users throughout the country.

Credit card fraud results in the loss of millions of dollars a year for individual cardholders, credit card issuers and insurance companies. Just like identity theft, credit card fraud can be difficult not only to discover but also to curb completely.

Phishing Scams

Phishing is one of the most dangerous forms of credit card fraud that consumers may face. Phishing scams, a clever and subtle way of gathering your personal information, involve falsified emails or phone calls that appear to be coming from legitimate companies or organizations but actually are thieves trying to collect your account information.

An email may ask account holders to provide or reconfirm account information for a number of different reasons, ranging from a general verification of your information to warning that your information is needed to avoid termination of service.

Some phishing scams even direct consumers to a bogus website that asks the customer to enter credit card account information. Once the information is entered, the phishers now have all of the information they need to use your credit card for fraudulent purchases.

The best way to avoid phishing scams is to avoid replying to suspicious emails or phone calls asking for credit card information. Instead, call the credit card company directly. Legitimate service providers oftentimes already have the personal information they need to provide a service because they took it down to open your account with them. Do not send personal information through email or instant messaging services. Be highly suspicious of services that contact you and then ask you for personal information.

Reporting Credit Card Fraud

If you suspect that you may have been a victim of credit card fraud, make sure you contact your credit card company immediately. There are several other steps that you can take to ensure that you are not a victim of credit card fraud.
  • Report the crime to the police in the jurisdiction where the cards were stolen, this proves to credit providers you were diligent and is a first step toward an investigation. Make sure you get a copy of your police report to provide the credit card company.
  • Call the three national credit reporting organizations immediately. The will be able to place a fraud alert on your account and keep from additional fraud from taking place on your account.

Protect Yourself against Credit Card Fraud

The best way to avoid credit card fraud is to be proactive. If you use a credit card, it’s important that you carefully monitor how and when you use your credit card. The following tips can help protect against credit card fraud.
  • Carefully examine your credit card bill each and every month. If you notice unusual activity, report it to your credit card company immediately.
  • Be careful about giving out your credit card number. If you’re not working with an established business, try to use a different method of payment.
  • Never respond to emails asking you to provide credit card information. This is a classic phishing scam and could result in credit card fraud.
  • Never provide credit card information to internet sites that do not offer secure check out.
  • Always destroy credit card receipts that you do not plan on keeping.
  • Do not write pin numbers on your credit cards.
  • Always keep photocopies of credit cards in a secure place so you can report companies immediately if you purse or wallet would end up missing.

Protecting Your Personal Financial Information

To protect your credit card number as well as your other financial information, it is important to know what a company does with the information you submit to them.

If you buy something online or download a free program, read the company’s privacy notices first. These notices disclose how your information is stored or spread around to other companies.

Federal privacy laws give you the right to prevent your personal information from being shared. Although companies share your information for practical business purposes, some of the spam that rides on the coattails of the legitimate business ads can be used to infect your computer with a virus and/or spyware.

Keep in mind that opting out of having your information shared is not always an option. Your financial companies can share certain pieces of your personal information without your consent, such as the following:
  • information that indicates your shopping preferences, for the purposes of marketing their products, which can also be shared with its affiliates
  • records of your transactions (credit card purchases, bank statements, or loan payments information) to data processing or mailing firms that work with your company
  • information requested by a court order
  • payment history on loans and credit cards to credit bureaus.
If you have a question or concern about a particular company’s privacy policy, contact the company first and, if questions remain, contact the federal or state agency that oversees that type of company.

The key to preventing credit card fraud, as well as other forms of fraud like identity theft, revolves around keeping a vigilant eye on not only your personal information but also your individual transactions. Get acquainted with the companies with whom you do business and keep a look out for privacy policies.