Credit card fraud is #1 type of identity theft in U.S.

In today’s fast-paced mobile and the internet-driven world, billions of credit and debit card transactions take place every year. Furthermore, these transactions are passed from company to company which means there is a lot of personal data being processed and stored every minute. With the exponential growth of digital transactions over the past 15 years, hackers have concentrated their efforts on exploiting consumers to use the information they steal to perform identity theft.

Credit card fraud top list of identity theft types

According to recent information released in January 2020 by the U.S. Federal Reserve Commission (FTC), credit card fraud is, by far, the most common form of identity theft. In 2019, the FTC received 271,823 reports from consumers who said their information was “misused on an existing account or to open a new credit card account.”

The federal agency further reported new account fraud soared to 88% between 2018 and 2019 with more than 246,000 consumers becoming victims. However, existing account fraud did decrease by 4%. Despite the drop, more than 31,000 consumers last year still suffered existing account credit card fraud. Military consumers are, particularly at risk. The FTC said there were more than 58,000 fraud complaints from military consumers in 2019 which cost them more than $27 million. Other people at high risk for fraud are children and seniors.

Hackers are clever with schemes to commit credit card fraud

Criminals who commit credit and debit card fraud are both devious and clever. Unfortunately, their methods are often extremely difficult to track. They’ll use various hacking techniques, along with good old-fashioned social engineering, to trick people to get the valuable data they want. They also often work in organized crime rings with multiple levels of people helping them gather credit card information. Sometimes they even pay workers at restaurants, retailers, or other places to steal card numbers. Other ways card numbers are stolen include:

• Data breaches
• Public Wi-Fi
• Phishing emails
• Spyware and malware
• Card skimmers
• Dumpster diving
• Mailbox theft

Chip and pin technology make it harder for hackers, but they aren’t foolproof.  As the statistics show, it hasn’t stopped hackers from coming up with clever schemes to steal consumer credit and debit card numbers. It’s important for consumers to remember, even using social media and sharing other bits of personal information publicly arm cybercriminals with the information they need to commit ID theft.

Consumers have some protection against credit card theft

Most credit card companies offer fraud liability protection which means consumers aren’t responsible for any charges they didn’t make. Federal law also limits how much money consumers have to pay if their card is fraudulently used to $50. If the card theft is reported before thieves use it, consumers are not responsible for any unauthorized charges.

Debit and ATM cards are a little trickier. If a consumer reports a debit or ATM card theft before it’s fraudulently used, they are not responsible for those purchases, but if the thief uses it before it’s reported missing, there may be some consumer liability. For instance, if the card is used more than two business days after it’s reported, the limit is $50, similar to credit cards. However, if the card is reported stolen more than two business days but less than 60 calendar days, the consumer is responsible for $500. For anything more than 60 calendar days, the consumer receives no protection and can lose all money in their account, including money in other linked bank accounts the thief accessed.

It is very important to report a card missing or if an unauthorized purchase is made as soon as it’s realized.

How consumers can safeguard their credit card

While it’s difficult to eliminate all types of credit card theft, there are many things consumers can do to better protect themselves.

• Always use secure websites. Look for the padlock icon on any website where personal information, including credit and debit cards, is entered. It’s not 100% safeguard but is definitely a good layer of protection.
• Never share account numbers. Never give out account information over the phone, email, or text to anyone asking. Always look up the official phone number and contact the bank to verify. Legitimate companies will never ask consumers for any sensitive information by “cold calling.”
• Check credit card statements. Each month (and more regularly if doing online banking) check accounts to ensure all transactions look correct. Be especially alert to any small charges on any account because thieves will often try to push through a charge from a few cents to dollars to see if it works without raising the red flags of large charges being made.
• Keep your card in the eye’s view. Always try to avoid situations where a worker takes a credit card out of view because they can make a copy.
• Never open attachments. Fraudsters often try to install malware on computers and other devices to gain access to personal information. Be wary of clicking links or downloading any attachments sent.
• Shred documents. Always shred documents that contain sensitive personal information.
• Use strong passwords. Use strong passwords that are unique to each financial account or on websites where credit or debit number is entered.
• Install security software. Make sure computers and other devices are protected from intruders.

One of the most telltale signs of fraudulent attempts to steal account information is a sense of urgency. Thieves often try to frighten people to act without thinking. For example, they might say an account was hacked, seized, or frozen to try to get consumers to share personal information. Any communication that comes with a frightened tone should be viewed with suspicion.

Credit card thieves can wreak havoc on your credit score. Despite being the victim of identity theft, it can be a hassle for consumers to undo all the damage done. If you or a family member are a victim of credit or another form of identity theft, PRBC can help. While you are re-establishing your credit standing, you can obtain an alternative credit score just by paying your regular, monthly bills. This will enable you to gain access to credit or favorable credit terms.

To learn more about PRBC’s alternative credit solution, contact us today.