Credit card fraud is a serious risk that affects individuals and businesses alike. Despite the implementation of measures like mobile wallets, chip cards, and Near Field Communication (NFC) technology, consumers are still vulnerable to having their credit card accounts used fraudulently. In this article, we will explain what credit card fraud is, the steps individuals can take to keep their cards safe, and what to do if their card is stolen.
Credit card fraud occurs when someone makes unauthorized purchases on an individual’s credit or debit card account. This can be done by someone the individual knows, who takes their card and makes unauthorized purchases, or by a stranger who gains access to the individual’s credit card number or physical card. Credit fraud can also occur through digital payment methods such as ACH, EFT, or mobile wallets, although Google Pay and Apple Pay are considered to be more secure forms of payment.
A recent survey conducted by American Express revealed that both U.S. millennials and Gen Z are highly concerned about fraudulent charges on their bank accounts, even more so than someone hacking their social media profiles. Regardless of age group, it is possible to keep credit cards and related accounts safe by being vigilant and taking necessary precautions.
Credit fraud can occur in various ways. For example, an individual’s credit card number can be stolen if an e-commerce site they shop at gets hacked. Thieves can also sift through someone’s garbage to find account numbers or hack into their accounts if they log in through an unsecured Wi-Fi network. Additionally, skimmers attached to point-of-sale payment terminals can be used to access credit card information if the magnetic stripe is used for transactions.
Banks have implemented specific measures to identify and prevent credit card fraud. They may contact individuals if they detect unusual activity on their accounts. For example, if an individual lives in New York and their bank detects card activity in South Carolina, they may place a stop on the card or reach out to confirm the authenticity of the purchase. Banks may also contact individuals if they detect unusually large purchases or multiple purchases that do not match their typical spending habits. Individuals can also set up alerts for purchases exceeding a certain amount and review their credit card statements regularly to identify any fraudulent activity.
To prevent credit card fraud, individuals should be aware that it can happen to anyone, regardless of their level of cybersecurity knowledge. It is important to pay with EMV chip cards, NFC “contactless” payments, or mobile wallets whenever possible. It is also advisable to avoid paying by card at businesses that only have a magnetic stripe payment system. Credit card statements should be shredded before disposal, and individuals should use secure wireless networks when shopping online or accessing financial accounts. Setting up alerts for any purchase, regardless of the amount, is recommended. Individuals should also avoid giving their card information to anyone, protect their smartphones and tablets with passwords, and monitor their credit card and financial accounts frequently.
It is important to differentiate between credit fraud and identity theft. Credit fraud is typically limited to a breach of a specific account, while identity theft involves the criminal gaining access to an individual’s financial information to open new accounts in their name. Resolving an identity theft case can be time-consuming and difficult, as it involves tracking down instances where the thief used the individual’s information, proving that they did not open the fraudulent accounts, and having them closed.
If an individual becomes a victim of credit card fraud, they should contact their bank immediately to report the fraudulent charges. By federal law, individuals are not liable for fraudulent credit card charges over $50 if they report them within 60 days. Credit card issuers like Visa, Mastercard, American Express, and Discover have zero-liability fraud policies. It is also recommended to check all accounts for fraudulent activity, change passwords on financial accounts and e-commerce sites, and request copies of credit reports from all three credit bureaus to ensure the fraud did not extend into identity theft.
In conclusion, credit card fraud is a serious risk that affects individuals and businesses. Despite the implementation of security measures, consumers are still vulnerable to credit card fraud. By being aware of the risks and taking necessary precautions, individuals can protect themselves from fraudulent activity. It is important to monitor accounts regularly, act quickly if unusual activity is detected, and report any fraudulent charges to the bank.