Credit Card Identity Theft and Fraud
Have you used your credit card to make your purchase, and the store clerk asks you for your identification? Sadly, not many of them ask for ID, but they should in order to compare signatures that are on the back of the card. The store clerk’s oversight is an added bonus for credit card thieves, and it makes it relatively easy for them to make purchases with your identity! They can make purchases at stores, by mail, and very easily over the Internet. They often do not even need to have a physical card, as long as they know your account number and name.
The identity thief can make arrangements to have the goods delivered to a different shipping address. If the credit card is approved, they will make many unauthorized purchases that you will not know about until you receive a bill. Sometimes, however, the thief will change the address on the card, in which case, it could be months before you even know what happened. Credit card fraud is one of the main vehicles identity thieves use to destroy your credit and make off with thousands of your dollars.
Actions to take after your discovery of identity theft
If you suspect that your card has been stolen, call the issuing company immediately. Because the problem is so prevalent, you will likely not be responsible for any fraudulent purchases. Most credit card companies have a toll free number listed on the statement, and they also offer 24 hour assistance for emergency service. If you suspect fraud and make a report, you may be asked by the company to sign a written statement, while under oath, stating that you did not make any of the purchases in dispute.
Once you have reported the theft or loss, by law, you have no additional responsibility for charges that are unauthorized by you. The Fair Credit Billing Act is a federal law that has established procedures in order to resolve billing errors that appear on your credit card accounts, including any fraudulent charges. As part of the law, you have the right to notify the company within 60 days of any error reported on your statement. The law also limits your liability for unauthorized charges to $50 per card.
Send your letter by certified mail and request return receipt, providing you with proof that the company has received your notice. Keep all copies for your records. The credit card company must get back to you in 30 days and resolve the error within the time of two billing cycles.
VISA and MasterCard have agreed voluntarily to put a limit on the consumers’ liability regarding unauthorized use of debit cards. This limit in almost all instances up to $50 per card, and it does not matter how much elapsed time has gone by since you make the discovery of the theft or loss.
How do ID thieves get your information in the first place?
Garbage collection Have you ever heard the term “dumpster diving?” This is one of the most popular ways ID thieves obtain your personal information. They go rummaging through garbage bins to find important personal information that may have been carelessly thrown away without being shredded. Thieves could also dig through the dumpsters of restaurants to recover discarded credit card carbons and receipts, showing your signature and credit card information.
Skimming Skimming is another way to gain your credit card information. By tampering with an ATM or debit machine, thieves then collect card information from any unaware consumer who uses these machines. Another way is for unscrupulous or disgruntled employees to tamper with their own cash register to steal your information. They may also swipe your card twice, once through the authentic register and once through a hidden data collection device.
Scams Another way is by falling for common scams, especially those through the phone. For example, someone may call you, announcing that you have won a great prize. However, they ask you to pay a small shipping and handling fee, payable by your credit card. If you give them your card number, they now have all the information they need to steal or sell your information.
Your mail Preapproved credit card offers are yet another way. If you do not shred these offers, or if they stole it out of your mail box, all these thieves have to do is change your address on the application form. They now have a shiny new card to provide them with a free shopping spree on your behalf! (On the other hand, these credit card offers do have some merit – if your credit score is low, a preapproved card is one way to rebuild your credit – provided you use it wisely and pay your balance.)
One of the best ways to protect yourself is to prevent identity theft it in the first (or second) place. You should regularly review the details of your statement and report any inaccuracies or red flags. To save time, you could use a credit monitoring service to do these things for you. Review and check for any credit card purchases or transfers that you did not make, and if you find anything suspicious, call immediately and report the theft.
March 19th, 2008 at 7:05 pm
Here’s another article about preventing credit card fraud that I found helpful:
http://www.ftc.gov/bcp/conline/pubs/credit/cards.shtm
Here’s a blog post that discusses “freezing” your credit report too, which is another effective way to avoid identity theft in the first place.
http://www.creditcardassist.com/blog/freezing-your-credit-report