Credit Card Fraud on the Rise
By: Source: AARP.org Date Posted: 2004-06-25 16:10:00-04:00
Not long ago, a woman ate dinner at a restaurant she frequented, paying for her meal with a credit card. When she received her next credit card bill, she was shocked. Hundreds of dollars in merchandise that she had not authorized had been charged to her account.
Credit card fraud is increasing. It costs businesses literally billions of dollars each year. And it costs the consumer as well because businesses pass the costs of credit card fraud onto consumers in the form of higher prices, interest rates and fees. Anyone victimized by a credit card scam also pays in terms of time and inconvenience clearing their credit card.
Consumers usually are not required to pay the unauthorized charges—especially if they notify the credit card company immediately after discovering a problem. The law sets the limit at $50, and many credit card companies lower the limit to zero if the problem is promptly reported.
The woman from the restaurant called her credit card company and found that she was a victim of "skimming"—a growing area of credit card theft. At the restaurant, an employee very likely ran her credit card twice, once for the legitimate meal charge and a second time on a magnetic card reader. The employee then copied the data onto a blank credit card and sold it to a third person or used it personally. The credit card company did not hold the woman responsible for the unauthorized charges.
Today most consumers undoubtedly use credit cards as a matter of course. Few people pay cash. Credit cards are just so convenient. In fact, the American Bankers Association reports that in 2003 more people used credit and debit cards than cash or checks for in-store purchases. And even though fraud is increasing, the good news, consumer advocates say, is that credit card theft is one of the easier crimes to prevent.
Credit card companies are taking steps to make credit cards more secure. Some cards display a photograph of the cardholder so criminals can't make face-to-face purchases with a stolen credit card. Most cards have holograms, secret imprints or hidden images so thieves have a harder time making a new credit card with a stolen credit card number.
"Despite these improvements, you still could become a victim of credit card fraud," warns Bobbie Kamen, State Director of AARP Vermont. "Even though credit card companies usually won't make you pay for the merchandise that thieves buy, it can be nerve-wracking to lose a credit card or find unauthorized charges on a credit card bill. That's why it's important to protect your credit card, your credit card number and your credit card sales slip."
Protect Your Credit Cards
Use common sense when it comes to your credit cards. Don't lend your card to anyone else. Some other tips:
- Carry one or, at most, two credit cards.
- Don't write your PIN (personal identification number) on your credit card. This will prevent thieves from using your PIN to "borrow" large amounts of cash with your card at an ATM machine.
- Write down the phone numbers of the credit card companies and keep them in a safe place so you will have them handy if a credit card is stolen or lost.
- Immediately report lost or stolen cards to the credit card company. The credit card company can stop the thief by canceling your credit card number.
Guard Your Credit Card Number
Thieves don't need your credit card to charge merchandise to your account. They only need your credit card number. Criminals use stolen credit card numbers to make purchases over the phone or through the mail. Sophisticated law-breakers can even make a new credit card with your name and number on it.
If you receive an offer for a new credit card in the mail and don't intend to use it, make sure to cut up the application form into several pieces. Some crooks go through trash looking for discarded but still usable applications in your name.
Here are some other ways to protect your credit card number:
- When checking out at store registers, shield your credit card from the people around you. Someone might be looking over your shoulder to copy your number. Some thieves even use little cameras to capture numbers.
- Don't give your credit card number to a telemarketer unless you are sure he or she represents a reputable company or you placed the call. Con-artists could pretend to sell you something just to get your credit card number.
- Con-artists also may pretend to be someone from your credit card company or bank, claiming they need to verify your card number because of some "computer problem." Don't fall for this scam. Verify directly with the credit card company using the telephone number on your card, not some false phone number the caller may give you.
- Make sure your transactions are accurate. Be on guard for dishonest merchants who might change your credit card slip after you sign it.
- Always total your charge slip before signing the credit card receipt. Don't leave blank spaces where additional amounts could be added.
- Never sign a blank charge slip.
Check Those Receipts
- Keep track of your credit card receipts as proof of the purchases you actually authorized.
- Read your monthly billing statement carefully to see if it includes purchases or transactions you did not make. Report any unauthorized transactions to the credit card company right away.
- Always check your receipts against your billing statement. If you think a charge amount was changed, call your credit card company immediately.
- Shred your receipts and anything with your credit card number on it. Thieves go through trash looking for this valuable information about you.
preview