5 Examples of Credit Card Fraud and How to Avoid Them

examples of credit card fraud     There are many examples of credit card fraud lurking.  In fact, in 2018 alone, fraud complaints by consumers was a whopping $1.48 billion.   Are you in the process of trying to repair your credit or improve your credit score? If so, you’ll want to know about some of the things that may compromise your credit and financial health. Unfortunately, nowadays scammers who are now more savvy than ever before.    The good news is that you can take steps to protect yourself from fraud.  Becoming familiar with the most common types of credit card fraud and how scammers can target you will help keep you from becoming a victim.  In this article, we discuss five common types of credit card fraud and give you smart tips for protecting yourself.  

Credit Card Skimming

  Credit card skimming is one of the most common examples of credit card fraud. This type of fraud involves a small device that is attached to a point of sale system.  The equipment is set up to steals a person’s credit card information when the card is swiped. The skimming machine captures all the details in the credit card’s magnetic strip, including the person’s name and credit card number. How can you protect yourself from credit card skimming? First, you must know where these skimmers are typically placed by fraudsters.  They can be found at ATM machines, gas station pumps, and public transportation payment kiosks. You always want to examine the credit card machine for signs of tampering before you swipe your credit card.  Does it look like it’s been pried open? If so, you’ll want to avoid the machine and alert someone who works at the business.  

Lost or Stolen Card Fraud - One of the most common examples of credit card fraud

  examples of credit card fraud

[Image via Pixabay]

  With this type of fraud, a criminal steals your physical credit card from your wallet or wherever else you keep your card. Or, the criminal finds your card, which you have accidentally dropped and left behind. Then the criminal uses your card to make as many charges as possible until you realize the card is missing, and you can contact your bank. Sometimes this type of fraud simply can’t be prevented because no one’s perfect. However, you can take steps to protect your physical card. If you carry a purse, consider investing in a zipped cross-body purse, so you can always keep your wallet close to your body rather than an open bag. If you keep your wallet in your back pocket, beware of pickpockets, especially in crowds. The moment you realize your card is missing, you must contact your bank immediately. You may want to keep a list of phone numbers for your banks in your phone, so you can easily contact them if necessary.   

Application fraud

  In this type of fraud, a criminal uses a person’s confidential information.  They will use your billing address, birth date, and social security number to open a credit card. How can you prevent this type of fraud? First, you must be very careful about sharing your social security number, especially on tax and healthcare forms. Sometimes, you simply can’t avoid giving out your social security number, but you should always ask if sharing the number is absolutely necessary.     

Someone takes over your account - an example of credit card fraud to stay on top of

  Account takeover is unfortunately an all too common form of credit card fraud.  What happens, is the criminal manages to get hold of all of your information and relevant documents. This is usually achieved online. They will then contact the credit card company and pretend to be you.  They have all your personal details so they will ask to have the address changed.  The replacement card will then be sent to the fake address, and the criminal can then start using the card and start making charges. Since this type of fraud is typically taking place online, it is that much more important you are aware of the digital footprint you leave behind while surfing the web.  You need to make sure you are taking common sense steps such as using strong, unique passwords.  You also need to be very careful where you provide your social security number and any other important personal details.    

Fraud without a card

  examples of credit card fraud

[Photo by Eduardo Dutra from Pexels]

  If someone knows the account number and expiration date of your card, they can commit what is know as card not present fraud.  This type of fraud can be done through the mail, on the internet or by phone.  They have all the information they need to "use"  your card without actually being in possession of it.  The silver lining is that nowadays they are requiring more verification than previously.  You are now usually asked for the security code which is making this type of fraud a little more difficult to get away with. With that being said, if they they were able to get your account number, they probably know to get that number too.  In addition, since this is a three digit number, there is a finite number of combinations that is can be.  Criminals will usually order very low dollar amount items until they get the number.  So you really need to be vigilant of small amounts on your statements. As far as avoiding this type of fraud, be very aware of where you house your cards.  Never leave your purse down anywhere, always keep it zippered as well.  If you have people coming into your home, make sure you never leave out anything that can be used in one of these situations.    

Knowing common examples of credit card fraud is key

  Credit card fraud is all too common nowadays.  Whether it is online or because your purse was stolen, it is crucial that you are careful with how you carry around your personal belongings, the sites you use and how freely you enter personal information.    

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