We all know that dreadful feeling of seeing purchases on your credit card statement that simply don’t add up.
Times have changed and credit card fraud no longer requires the perpetrator to have access to your physical card. Credit card fraud happens in 2 ways:
- Your existing accounts are used without your knowledge
- New accounts are opened using your identity
As this issue has become ubiquitous and no less unfortunate, we’ve put together a guide to help you understand how to deal with credit card fraud.
If it happens to you, it can end up saving you a significant amount of time, energy, and even money to know how to handle it.
Timing Is Everything
The most essential factor in limiting credit card fraud and its effects has to do with timing.
- Detect it early.
- Do something about it immediately.
Detecting It Early
If the theft has occurred and it takes months for the victim to realize, it likely implies money could have been easily saved.
We understand reading your statements each month can be both boring and sometimes, painful. However, it is an essential step in detecting any suspicious activity.
The second vital action is to do something about your theft. Once you detect suspicious activity, you can mitigate the effects by stopping any further transactions immediately.
Call your banking institution, chat online with a representative, or check if you can cancel cards through online banking. Acting quickly is essential.
Avoiding and Dealing with the Most Common Categories of Fraud
Let’s take a look at how we can adapt our habits to save ourselves from fraud.
Pickpocketing has been a method of theft for ages and has become no less common over the years. If your purse is hanging off the back of your chair at a restaurant, you’re in a crowded area, or your wallet is precariously tucked into your back pocket, you may find yourself card-less before you know it.
Now that contactless payments are common, it makes this concept even more attractive for thieves as they can rack up small purchases with the tap of your card.
With this type of theft, prevention is best. Try as best you can to put your cards in something that can be closed, consistently check your wallet’s security and limit how many cards you have on you at one time, so you have resources if your whole wallet is taken.
If your physical cards are stolen, be sure to call your bank to de-activate them as soon as you realize they are gone. Further, check your online banking as certain banking platforms will let you cancel cards using their app.
Card Not Present (CNP) Theft
As the name suggests, this type of fraud occurs without the physical card but rather with just the card’s details. If you have ever bought something online, you have made a CNP purchase. This type of fraud is growing increasingly frequent because of the rise of online shopping.
Various platforms save your card details and thieves attempt to break into their software and take your details.
The good news is many banking institutions have protections against these thefts in place. These include 2-step verification methods as well as flags when large or strange purchases are made. For instance, if a one-off purchase is made abroad using your card, your credit card company may ask you to confirm it was you.
When it comes to preventing these occurrences, be sure to change your passwords every so often and to switch up your password variations.
Counterfeit and Skimming Fraud
Your credit card has a magnetic stripe that contains its details. Devices can “skim” these details when you swipe your card. Once the details are taken by thieves, they can create a counterfeit card or shop online using your details.
To avoid this category of credit card fraud, exercise caution when using ATMs and shopping. If the device you are swiping your card looks tampered with in any way, best to try another machine. Chip technology has made “skimming” much more difficult so try to use your chip or tap as opposed to swiping whenever you can.
If your details have been taken, call your banking institution and cancel that card immediately as you don’t know who has access to the details and whether or not they have created a counterfeit.
False Application Fraud
This category of credit card fraud describes the situation where someone has applied for a credit card in your name. Alternatively, they have used a different name but connected your bank account to it. This type of fraud can be difficult to detect and thus, the thief can spend and spend their credit before you realize it.
To avoid False Application Fraud, monitor your bills and accounts carefully each month. If anything seems out of the ordinary, report it as soon as you see it to avoid unnecessary damage to your credit score.
With all the types of fraud that exist, banking institutions make it easy to report. Whether the fraud has happened already, or you notice something suspicious on your statement, contacting your bank is vital.
Simply look on the back of your credit card for the number to call, check out your online banking app, or use a search engine to find the correct contact information.
Can I Get my Money Back?
Any major banking institution has a zero-liability policy. This means if money has been stolen from you, you are not responsible for it and the bank will reverse the transactions.
However, this is dependent on 2 factors.
- The first being that the theft is not due to carelessness on your part. For instance, if you willingly gave someone your card details at one time and then changed your mind about wishing them to have access to your funds. The bank may not be willing to cover your losses in these situations.
- Secondly, you reported the theft immediately. The more time you wait, the more money the bank or credit card company will lose and thus, won’t be pleased.
Credit card theft is unpleasant – to say the least – however, it can be prevented and dealt with through various tactics.
Check your passwords frequently, always check your bills and credit card statements, and flag suspicious activity. Further, act early and immediately. The sooner you deal with the theft, the less damage will be done.
Unfortunately, theft is a part of life and has been forever. Thus, it is best to know what to do if it happens to you.
Image credit:[KAROLINA GRABOWSKA]