Given the dramatic increase in the number of delivery systems bombarding American homes — television, radio, internet, social media, phone, mass mailings, magazines, flyers, advertising copy — and the fact that credit card owners are an easy and abundant target for criminals, it seems inevitable that consumer fraud will reach you at some point.
Estimates for the number of people affected by fraud vary because of data gathering differences, but experts agree that somewhere around 12% of American adults (approximately 32 million people) are conned out of money every year.
It is very difficult to estimate the true cost of fraud to the U.S. economy, but some experts put it between $40 billion and $50 billion. Those figures probably only account for fraud on the retail level, but there are several other categories of fraud that would push the number to unimaginable levels.
Credit Union of Denver takes steps to help prevent fraud before it happens. When fraud is suspected, we have partnered with a company called PSCU that processes our cards and statements. They have a division called Risk Intelligence. If you make a purchase that is out of the ordinary behavior or considered a purchase from a higher risk merchant, they may block the transaction. This will show up as a decline to our members and merchant, until the member has verified the activity. This is a layer of security to protect your account and card. While we understand this may cause a momentary inconvenience for our members, we know it has caught many fraud attempts and saved our members money and the huge headaches when dealing with fraud.
Card Fraud Practices
Merchants, banks, credit unions and card companies must deal with the endless ways that credit/debit card thieves have found to exploit the current magnetic strip card system and commit fraud with that information.
Some of the common ways card fraud is committed include:
- Lost or Stolen Card– If your card is being used without permission, report it immediately. It is a costly event for everyone involved.
- Skimming– Your data is skimmed from the magnetic strip on your card and then used to encode fake cards or make online purchases. Restaurants, ATM machines and gas stations are popular skimming sites.
- Phishing– Computer hackers send malware to you via email. When you open the attachment or click on a link, it instantly downloads a program that gives the thief access to all the information on your computer, which could include every keystroke, including passwords.
- ID Theft– If a criminal gains access to your personal information (name, address, social security number, etc.) they could use the information to open new accounts with it or take over existing accounts.
- Change of Address– A criminal could use your name and request a change of address for billing, then call the credit card company and ask that a replacement credit card be sent to the fake address.
This is why your credit union/bank should always verify you are who you say you are. If you phone in, they should ask questions that are not easily known, (except by you) and when you are in person we ask to see your government issued photo ID.
Unfortunately, card fraud is a reality we must prepare for and do our best to take preventative measures.
In the meantime, here are some steps to take to reduce your risk of falling victim to card fraud:
- Create strong passwords for all your accounts.
- Minimize the number of credit cards used.
- Avoid giving out personal information such as email address, social security number, etc.
- Ask your financial institution for mobile alerts on unusual card activity
- Keep records of account information in a secure place.
- Shred any documents with your card number on them.
- Pay and receive bills electronically.
- Monitor your accounts for suspicious activity – use Card Alerts
- Check your credit report to verify you opened all existing accounts.
Reporting Card Fraud
If you discover that fraud has been committed with your card, it is imperative to act quickly to limit damages to all parties involved.
The first thing consumers must do is call the financial institution or company associated with the account and close it immediately. This helps protect all parties involved.
A lost or stolen card could have a significant effect on your credit score so the next step should be to contact the credit reporting agencies and make them aware. The nation’s three credit agencies will put a fraud alert on your credit file, which tells lenders you have been a victim of fraud.
It is helpful if you file a report with the Federal Trade Commission, which uses the information to spot trends in identity theft to help them break up large rings of thieves.
The next step; you may want to file a police report on fraudulent card activity to serve as proof should you need to contest card charges or have a dispute with the card company. The police likely won’t try to solve the case, but there is proof you were innocent of wrongdoing and it could help them solve identity theft cases.
The final stop is a series of precautionary moves to reduce the damage from any information that was stolen. Things like changing passwords and pin numbers, contacting utility and phone companies to alert them in case someone tries to open an account in your name and maybe even getting a new driver’s license are all good ways to ensure you don’t suffer from the loss of information.
Stay safe, stay vigilant and always protect your information.
Source: https://www.debt.org/credit/your-consumer-rights/fraud/ & enhanced by Credit Union of Denver.