How Does Credit Card Fraud Happen?
No one is immune to identity theft. But when it comes to credit card fraud, there are a few cardholder mistakes that fraudsters capitalize on.
Mistake 1: Not safeguarding your card.
Sometimes, cards can be stolen by a stranger or worse—by someone you know. However, someone doesn’t need your physical card to commit credit card fraud. They can get access to your name, card number/expiration code/CVV code, pin code, etc., in many ways to commit card-not-present transactions (online or over the phone) and ring up your bill.
Credit card theft can happen just with someone looking over your shoulder, stealing your mail or digging through your trash. Be mindful of your surroundings, keep personal information in a secure place, and always shred your old statements and mail.
Mistake 2: Being tricked into giving out sensitive information.
Unsafe sellers and websites can steal your account info during transactions. Always make sure the site you’re buying from is known and accredited, and at least has website encryption (https://www.website.com vs. http://www.website.com).
Many have also fallen victim to “special” offers or bogus communications via email (phishing) or direct mail. Never give out your personal information to a stranger, no matter how good the deal is and always check the sender address before checking email.
Mistake 3: Not being diligent about your finances.
If you don’t take control of your personal security, who else will? It’s important to always be meticulous about your finances and check your statements regularly to ensure they’re adding up.
The time it takes for you to respond to and report credit card fraud will directly affect how much it impacts you. It’s always better to be safe than sorry!
Who is Liable for Credit Card Fraud?
It doesn’t take long to realize when spending goes awry on your account. The good news is, if you act fast, you can protect your credit and your finances. Most banks have safeguards in place to help with fraudulent transactions, like real-time text and email credit fraud alerts.
Even without that, the Fair Credit Billing Act (FCBA) gives you 60 days to dispute credit charges to your card issuer and caps liability at $50.
Report Credit Card Fraud
If you’ve been a victim of credit card fraud, contact your card issuer immediately to notify them that you’re not making the charges.
Also alert a Credit Bureau to put a fraud alert on your name within 24 hours. Filing a complaint with the Federal Trade Commission (FTC) and/or a police report are also smart steps to take, since they can be useful in fighting and proving identity theft.
Credit protection services can also help stop fraud early through criminal identity theft monitoring, internet monitoring, junk mail service, dark web monitoring and credit freezes.
