September - Avoiding Credit Card Fraud

September, 2007

Avoiding Credit Card Fraud

We have all heard about credit card fraud, but hopefully no one has experienced it personally.  A young lady by the name of Hayley Sumner, who has a private business in California, was hit last winter when her card was stolen from the front seat of her car.  Hundreds of dollars were charged at service stations and movie theaters.  Six or eight months later, she was planning a vacation in Belize.  She phoned in her reservations to the hotels and resorts where she had planned to stay.    

The following month, she received a statement for hundreds of dollars for phone calls from Belize to the United States.  Obviously, she was very frustrated and didn’t know what to do or how to avoid other repeats of the same crime except to cease using the plastic or continuously second-guessing herself.

As the use of plastic becomes more and more prevalent in the United States, the increase of credit card fraud increases.  With more modern technology available, the criminals are getting smarter as well.  They are beginning to use new techniques for stealing like getting numbers from billing statements, through cell phones and the Internet.

Experts tell us that the credit card industry loses about $2 billion a year in global fraud.  Master Card and Visa estimate that fraud accounts for about seven cents out every $100 dollars in their companies.  The Federal Trade Commission, in a report in 2003, stated that identity theft is one of the largest categories for fraud through new and existing credit card information.  The commission stated that an approximately 6 million people have experienced credit card fraud since 2002.

HOW CAN YOU GET RIPPED OFF?

There are many ways that you can be ripped off. Following are some of the ways that this can be committed:

• Lost & Stolen – Loss and theft is the most common way credit card crimes are committed.  J.P. Morgan Chase Co. is one of the largest credit card issuers in the US.  They stated that 50% of all credit card fraud is the result of lost and stolen cards.
• Skimming  – More and more fraudsters will attach a device to an ATM or point of sale terminal that will capture an account number from the magnetic strip on the back of your card.  When this is done, the merchant is usually involved by selling the information.
• Phishing $ Spoofing – As use of the Internet and Internet sales pick up, hackers and other Internet criminals will continue to try to get your numbers from e-mails claiming to be from your bank or from credit card company. These phishers or spoofers might even send you to a link that looks almost like your bank account or credit card Web site.  They will then ask you to put in your account information.
• Social Engineering – Fraudsters may need some piece of information from you in order to set up a fraudulent account.    They will contact you directly for the information that they need - usually by phone or cell phone.  They usually will formulate a story that seems far-fetched requesting a few details about your credit card.  Peter Dorrington, head of the SAS Institute of Cary, NC, relays that it is human nature that we tend to want to help other people, especially if they sound like they are someone in authority.
• ID Theft  – They steal our name, phone number, address, and Social Security number - possibly from the trash, our mail, or maybe online -  and then they use it to open up a new account.
• Card not Present – Your stolen card is used to purchase something from a remote location either by the Internet or by the telephone.  Obviously the merchant doesn’t see the actual card, but should be checking the validity of it.  It is easy to get personal information as it is sold online for as low as $20 on web sites for public information.  This spokesman says that all you need is money and you can get what you want.

HOW TO PROTECT YOURSELF:

• Never throw away your old documents, credit card statement, or any other papers that have your identity imprinted.   A good idea is to burn or shred any old papers or statements.
• IF you aren’t doing it now, start checking your credit history every six months.  Three agencies to check with are TransUnion, Experian, or Equifax to see or verify your credit records.  This will readily tell you if something isn’t right.
• Experts that study credit card fraud and other types recommend that we sign up for a “fraud alert” service.  These are normally an arm of credit agencies.  They will tell you when and if a new account has opened and will notify you when any change occurs in your credit history.
• Obviously, never give any credit card information to anyone that poses as an online bank representative or any other call that asks for this information.  Assuming that you have an established relationship with your bank, if so, they will never ask you for your full account number.
• If possible, turn off receipt of paper documents and receive them online.
• Assuming that you have the home capability, log on to your accounts during the month to check for any suspicious activity.

**REMEMBER - DON’T CARRY YOUR SOCIAL SECURITY CARD WITH YOU OR WRITE YOUR PERSONAL IDENTIFICATION NUMBER ON YOUR CREDIT CARD!!

SAFETY---YOU WILL REGRET IT IF YOU FORGET!
YOU GET WHAT YOU CHECK, NOT WHAT YOU EXPECT!!

Excerpts:  http://home.bellsouth.net