Credit Card Fraud: How You Can Protect Your Finances

By November 16, 2022 uLink Blog
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In the digital economy, credit card fraud is all too common. 

Every year, millions of consumers fall prey to scams that threaten their financial freedom. 

If you’re a victim of credit card fraud, take heart: there are several strategies you can use to repair the damage and protect yourself from future attacks. 

In this article, we’ll reveal the most common credit card scams, provide powerful tips to help you avoid them, and introduce actionable steps for you to take if you’ve been a victim of fraud. 

What is Credit Card Fraud?

Credit card fraud occurs when criminals obtain access to your account and add charges without your consent. 

Though credit card fraud primarily affects your finances, it’s also considered a form of identity theft.

Roughly half of all American adults have experienced some form of credit card fraud, and one third of small businesses have been severely impacted by it. 

In 2018 alone, nearly $9.5 billion was lost due to illegal credit card transactions. 

How Do Criminals Steal Credit Card Information?

Before we continue, it’s important to note that credit cards are relatively secure financial tools. 

After all, when you use a credit card to make a purchase, you’re using the lender’s money—not your own.

Therefore, if you spot an unauthorized charge on your account, or if you made a purchase and received a damaged product, you can easily dispute it with the credit card company. 

They have a vested interest in protecting your account, as their money is at stake. 

Still, it’s wise to be wary of these increasingly common credit card scams:

1. Unsecured Wi-Fi

Never make an online purchase over a public Wi-Fi network, like an airport or coffee shop. 

When you’re connected to a public network, scammers can monitor your interactions. 

In other words, if you’re using your credit card information, they may be able to steal it. 

Generally speaking, it’s much safer to use your cellular network for purchases than public Wi-Fi hotspots. 

2. Spyware & Malware Attacks

Avoid downloading suspicious files and attachments to your devices—only download when you trust the source and you know what the file is. 

Malicious programs, commonly known as spyware or malware, can instantly hack your personal financial information and send it to the cybercriminals who sent you the file.

Individual consumers and businesses alike are at risk from such attacks. 

In 2021, for example, over 4,000 retailer websites had their security jeopardized by just one piece of malware.

3. Skimming

While internet-based schemes are dominant, so are several offline methods.

This includes skimming, where criminals add unauthorized card readers to vending machines, taxi cabs, gas station pumps, and even ATMs. 

When you swipe your card, the fake reader will collect your account information and send it straight to the thieves. 

According to recent studies, U.S. card skimming fraud grew by over 700% in the first half of 2022. 

4. Phishing 

Though it’s a well known scam, phishing continues to wreak havoc on the financial lives of many consumers. 

Whether by text, email, or phone, phishing occurs when hackers impersonate a trusted source. 

For example, they may leave you a voicemail pretending to be your bank. They may send you an email offer posing as a popular retailer. Or they might text you a discount code to be redeemed online.

Regardless of how they contact you, all phishing scams will eventually ask for your personal credit card information. Don’t give it to them

5. Debt Collectors

Though undoubtedly related to phishing, this particular scam deserves special attention. 

In recent months, many criminals have posed as debt collectors, harassing consumers to pay for allegedly delinquent bills. 

These scammers use the names of official revenue recovery agencies, like Hunter Warfield, to heighten their sense of legitimacy. 

Many criminals will pressure you into repayment and even threaten you over the phone or via email.

According to the Department of Financial Protection & Innovation, be sure to ask for this information before proceeding:

  • The name of the person calling and the name of the company they work for. 
  • The company’s name, address, phone number, website, and email address.
  • The debt collector’s license number.
  • The amount of the debt.
  • The name of the current creditor who is trying to collect from you.
  • The name and address of the original creditor.

If the individual can’t answer these questions, they are likely a fraudster.

How to Avoid Credit Card Fraud

When it comes to avoiding credit card fraud, awareness is half the battle

If you can avoid the easy mistakes—like making online purchases over public Wi-Fi or sharing your personal information with strangers—your finances have a good chance of staying safe. 

While some of the following tips may seem obvious, keep them in mind whenever you use your credit cards:

1. Keep Your Accounts Secure

While most of the online world is outside of your control, your own accounts are your top responsibility. To that end, make sure you use strong, original passwords for each of your credit card and bank accounts. 

If possible, use two-factor authentication whenever you log into your accounts or banking apps. 

Two-factor authentication requires you to provide an extra level of security, whether by phone call, text, or email—this ensures hackers can’t steal your information. 

2. Avoid Saving Credit Card Info on Websites

Modern computers and smartphones make it easier than ever to remember passwords and credit card information. 

You can save your essential data on them, and make purchases with the click of a few buttons. 

While this may provide great convenience, it can also expose you to severe financial fraud. Saved data is a very popular target for hackers, as over 147 million people experienced during the infamous Equifax breach. 

To the extent that you can, avoid saving credit card info on websites. It’s simply too risky. 

3. Handle Suspicious Messages With Suspicion 

Phishing scams are pervasive. 

As a consumer, it’s incumbent upon you to learn how to detect suspicious emails, texts, and phone calls. 

That can be rather difficult these days, as criminals are highly competent at forging caller IDs, email addresses, and even highly professional (but fake) websites. 

If something feels off, trust your instincts, and ignore or delete the messages. If someone is soliciting your financial information, don’t share it. 

Finally, if someone ever says they’re calling from your bank or lender and needs your credit card number, hang up. 

Then, dial the business number on the back of your card, and ask them to confirm if the original call was legitimate. 

4. Review Your Personal Financial Information Consistently 

Check your credit card statements as frequently as possible. 

If anything looks off, even charges as small as $.01, be sure to report them to your card company or bank. 

Sometimes, thieves will get your personal information and charge a minimal amount simply to see if they can sneak by you unseen. 

Additionally, make sure to monitor your credit report for suspicious activity. Federal law entitles you to request a free copy of your credit report every 12 months.

5. Use Mobile Payment Apps

To avoid skimming at in-store card readers, consider using mobile payment apps (like Apple Pay, Google Pay, or Samsung Pay). 

This new technology is quite safe, as your credit card information remains shielded throughout each transaction. 

Thanks to a process known as tokenization, the retailer never receives or retains your actual credit card number. 

Mobile payment apps make shopping both safe and secure. 

What to do if you’re a victim of Credit Card Fraud 

If a criminal does find a way into your credit card account, here are five quick steps to fight credit card fraud:

1. Call Your Credit Card Company Immediately 

Don’t wait to flag a fraudulent charge: call your credit card issuer as soon as you notice something suspicious

Many credit card companies have “zero liability” policies, so you may be protected from paying for unauthorized charges. 

If your credit card company does not have this feature, the Fair Credit Billing Act ensures you won’t have to pay more than $50 for an unauthorized charge. 

Note: According to the Fair Credit Billing Act, you have up to 60 days to report fraudulent charges. 

2. Change Your Other Accounts (And Update Passwords)

While only one of your credit cards may have been affected, it’s smart to check all of your accounts after experiencing fraud. 

Unfortunately, you won’t always know how the criminals accessed your information. If they hacked one credit card number through a data breach, chances are they have more information at their disposal. 

Exercise extreme caution and update all of your passwords and PIN numbers. 

3. Notify the Credit Bureaus 

If you recognize an unending stream of fraudulent charges, then you may need to take more drastic action. 

Such steps include contacting each of the three major credit bureaus—TransUnion, Experian, and Equifax—to request a credit freeze. 

This will stop criminals from perpetrating additional fraud on your accounts. 

To reach the three credit bureaus online, or by mail or phone, please see below:

Experian

  • National Consumer Assistance: P.O. Box 9554, Allen, TX 75013.
  • Fraud Victim Hotline: (888) 397-3742.

Equifax

  • Report fraud online here.
  • Fraud Victim Assistance Department: Consumer Fraud Division P.O. Box 740256, Atlanta, GA 30373
  • Fraud Victim Hotline: (800) 525-6285

TransUnion

  • Report fraud online here.
  • Fraud Victim Assistance Department: P.O. Box 2000 Chester, PA 19016-2000
  • Fraud Victim Hotline: (800) 680-7290

Note: In more serious cases, you may also need to file a police report and contact the Federal Trade Commission (FTC), as credit card fraud can include identity theft. 

If you believe criminals have accessed your insurance, credit, and identification cards, click here to contact the FTC and start a recovery plan. 

Moving Forward

Remember: if you’re a victim of card fraud, you’re not alone. Millions of others are fighting fraud alongside you.

Fortunately, credit card companies are a strong line of defense to rectify unauthorized charges and protect your financial well-being. 

As you move forward, be sure to consistently practice safe financial habits and routinely check your monthly statements. While the credit card companies, credit bureaus, and FTC can help you out, your own intuition is the first (and best) line of defense.

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