Credit fraud
Credit fraud and credit card fraud costs cardholders and issuers hundreds of millions of dollars each year. While theft is the most obvious form of fraud, it can occur in other ways.
There is no single definition of fraud, but some types that occur include:
- Someone may use your card number without your knowledge.
- A phone caller says that you need only provide your card number and its expiration date to qualify for a special discount vacation.
- A thief goes through trash to find discarded receipts or carbons, and then uses your account numbers illegally.
- A dishonest clerk makes an extra imprint from your credit or charge card and uses it to make personal charges.
Credit fraud can occur without your knowledge
A lost or stolen card may be what we think of first when we think of someone using our credit--a fraud we know we can halt by reporting the card lost or stolen. But what if someone were using your credit while your card sat safely in your pocket or purse?
A stolen account number can often be as effective for a criminal as a stolen credit card, especially if information such as the expiration date or your billing address is also available. You may not know someone is using your account until you notice charges or cash advances you did not make on your monthly statement.
Criminals can steal credit account numbers in many different ways, such as collecting them in telephone or Internet scams, copying them from credit cards when the owner isn't looking, or gathering them from discarded receipts or account statements in people's trash. Gathering information from people's trash, also known as "dumpster diving," is also effective for criminals intending to perpetrate the even more hard-to-catch identity fraud.
"Identity theft" describes when someone uses your personal information, such as your name and Social Security number, to either take over current credit accounts or open new ones using your identity.
One of the best ways to protect yourself from Credit Fraud and Identity Theft is through services like LifeLock.
Credit fraud affects us all
When criminals obtain goods or cash through credit fraud, it is the credit card issuer that bears the burden of the loss--a cost it covers by charging its cardholders higher fees and interest rates.
Guarding Against Fraud
It's not always possible to prevent credit or charge card fraud from happening. But there are a few steps you can take to make it more difficult for a crook to capture your card or card numbers and minimize the possibility.
Here are some tips to help protect yourself from credit and charge card fraud.
Do:
- Sign your cards as soon as they arrive. (I write CHECK ID instead of signing, but then I've heard some say not to)
- Carry only the credit cards that you NEED in your wallet, you don't need all 5 of them, 1 will suffice.
- Keep a record of your account numbers, their expiration dates, and the phone number and address of each company in a secure place, a vault is a good place (houses do get burglarized).
- Keep an eye on your card during the transaction, and get it back as quickly as possible.
- Void incorrect receipts.
- Destroy carbon copies --Buy a paper shredder.
- Save receipts to compare with billing statements.
- Open bills promptly and reconcile accounts monthly, just as you would your checking account.
- Report any questionable charges promptly by phone and then in writing to the card issuer.
- Notify card companies in advance of a change in address. New homeowners don't need your old mail anyway.
- Lend your card(s) to anyone.
- Leave cards or receipts lying around, or discard them at nearby garbage cans.
- Sign a blank receipt. When you sign a receipt, draw a line through any blank spaces above the total.
- Write your account number on a postcard or the outside of an envelope.
- Give out your account number over the phone unless you're making the call to a company you know is reputable. If you have questions about a company, check it out with your local consumer protection office or Better Business Bureau.
Don't:
You should check your credit report at a minimum once a year to ensure there are no errors, you are not a victim of credit fraud. There are three Consumer reporting agencies that report your information, they are:
Equifax
800 685-1111
Get Your Equifax Credit Report Now!
P.O. Box 740241
Atlanta, Ga.
30374-0241
Experion
888 322 5583
http://www.experian.com
P.O. Box 2002
Allen, Texas 75013
Transunion
800 888-4213
http://www.transunion.com
P.O. Box 1000
Chester, Pa. 19022
I will say this once more, one of the best ways to protect against credit fraud and identity theft is a service like LifeLock.
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