Recent statistics report that credit fraud is a growing problem in the country. In the U.S. and 2020 alone, there were more than 60,000 reported cases of credit card fraud and almost 400,000 reported cases of identity theft. Additionally, reviewing the previous year’s cases, it was found that credit card fraud increased to as much as 44.6% in just one year.
So you see, if you have already been a victim of this crime, you are certainly not alone. It is a prevalent issue plaguing the financial industry, not just here but abroad.
Don’t worry, though. Fortunately, it’s also an issue that can easily be prevented with a few careful steps. In this article, we are going to share what those are.
What To Know About Credit Card Fraud And How To Prevent It
What Is Credit Card Fraud?
However, before we move on further, let us briefly define what it is. In a nutshell, credit card fraud is any fraudulent activity involving using a credit card. It is commonly involved with identity theft and the actual theft of the card itself.
The Most Common Types of Credit Card Fraud
There are different types of credit card fraud. However, these are usually categorized into four major types:
- Card Theft. A lot of credit card fraud cases today happen with the use of more modern technologies. Even so, credit card theft remains one of the most commonly reported types of fraud. This happens when a lost or stolen card is used without the owner’s consent.
- Card Skimming. Speaking of modern technologies, one type of fraud uses one. Credit card skimming happens when your card is cloned so that another person may use it without your consent. This is usually done with special swipe machines to make a copy of your card.
There are also reports of RFID scanners being used to obtain information without swiping. This is the reason why RFID wallets are so popular these days. They are made of a material that blocks the wireless signals that allow this skimming to work.
- Card-Not-Present. This fraud is not surprising, given the further digitization of banking services is also on the rise. Card-not-present refers to fraud where your credit card information (such as your number, name, and address) is stolen using fake web pages, malicious emails, and other online scams.
Your information is then used to commit skimming or sold to other questionable individuals and organizations.
- Fraudulent Use. Finally, it is also possible for someone close to you to borrow your credit card information to buy something online without your knowledge and consent.
Steps to Prevent Credit Card Fraud
Credit card fraud can happen to anyone at any time. Thankfully, there are several things that you can do to prevent credit card fraud. Here they are:
- Always transact with a reputable company with multiple secured payment methods. For instance, eCommerce sites are integrated with point-of-need financing software that presents an alternative credit line instead of using your card.
- Be mindful of the links you click, especially ones from random emails. Remember to double-check the URL of the pages where you are required to enter your financial information. It should look more professional, following the usual URL format of the company.
A long string of random words and numbers is usually a red flag that it’s a fake page, even if it looks the same as the real one. Secure sites also start with “https” instead of just “http.”
- Pay close attention to your belongings when shopping. For example, stay alert and tightly hold on to the straps of your bag when you’re in a crowded place. In addition, it is helpful to keep your wallet separate and closer to your body.
When using your card, stay vigilant of people who might be looking over your shoulder to spy on your information.
Lastly, don’t let your card out of your sight. This practice can significantly reduce the risk of your card being cloned without you noticing.
- Don’t use public network connections. For example, skip the free Wi-Fi when you’re performing financial transactions. It would be much safer to use a private connection instead.
For instance, your phone’s data connection is often more secure than the connection provided by your coffee shop since you’re not sharing it with many strangers simultaneously.
- Keep track of your banking-related mail. Keep tabs on all your banking-related mail, especially those that might contain your credit card information.
Contact the financial establishment immediately if you think you didn’t receive something you were supposed to get. We recommend signing up to receive banking statements and reports via email instead.
- Keep a record of your transactions. Speaking of reports, keep a record of your credit card transactions. It will be easier to catch any purchases you didn’t make this way.
We also don’t recommend giving out your credit card information to anyone else, even family members. It is natural for people (even our loved ones) to become more careless when spending something they didn’t earn. In addition, this will make your transaction records confusing and genuine fraudulent activity more difficult to notice.
- Dispose of financial-related trash responsibly. Cut up old cards. Be sure to cut through its chip and magnetic strip. Always clear the trash in your email and recycling bin regularly.
Finally, please don’t dispose of financial records by simply crumpling them up and throwing them in a bin. Shred them first. Don’t make it easy for anyone to fish your credit card info in the trash.
There are other steps that you can do to protect your financial information further and prevent credit card fraud. However, the tips that we have given above can already make a huge difference in significantly reducing the likelihood of you getting victimized by these types of crimes. Keep safe!
Mike is the Editorial Director at Lendza. He enjoys helping entrepreneurs and startups succeed through smart, innovative strategies. He’s partnered with CEOs and executives to grow businesses from the ground up. Before his work at Lendza, Mike was a stock market analyst. He enjoys reading adventure and science fiction novels when he’s not traveling for work.