Information on avoiding credit card fraud

Reasons And Ways To Avoid Credit Card Fraud

Everything in the world has two aspects – a positive and a negative. Credit card fraud is the off-putting aspect of credit cards. It is certainly true that the incidents of credit card frauds are on the rise. However, the real picture is not that daunting and you can easily evade credit card frauds if you are a little careful. Nevertheless, before proceeding with these details, let us first understand how such frauds take place.

Credit card fraud is usually a scam where a convict uses another person’s credit card to make purchases. The convict can be anyone – starting from a common pickpocket or thief, who steals a card (rather card details), an ATM attendant (or anybody standing near you in an ATM booth) who sneaks a look while you are entering your card details, PIN, etc. Even the cashier/employee punching your credit card at a restaurant can be involved in theft of credit card information. Known as skimming, this type of credit card fraud takes place when your credit card details are copied using a magnetic stripe reader. However, crooks have taken to online credit card frauds too.

Though unusual, credit card frauds sometimes even involve legitimate cardholders. Better known as first-party fraud, this deception occurs when a cardholder makes use of the credit card to make payment for a purchase but then denies availing the service/receiving the goods, sometimes even refusing to have placed order.

Who Suffer The Most?

Apparently, the businesses suffer the most because they are made to bear the brunt of most of the expenses. The card-issuing bank reclaims 100% of the payment resulting from such fraudulent transactions and even charges research and investigation fees in case there is the appeal for enquiry. The cardholder is charged a paltry sum of up to USD 50. This, however, is no indication that the cardholders are not affected. Businesses, anticipating that a certain amount of credit card fraud is unavoidable, set prices high, leaving no option for consumers but to recompense the losses (at least some if not full).

Protection provided by law is not able to lessen the suffering of the common lot and the merchants (precisely because the card-holding customers and the card-accepting merchants are bound by the contract law as per agreements they had sign with the banks). Most of the credit card criminals go scot-free as the Secret Service handling such crimes have specified a limit of USD 2000 to start investigation in each crime. The swindlers, well aware of this fact limit their purchases from any one business below USD 2000.

The Way Out

As it is said, ‘Self-help is the best help’, and you can really evade a lot of unnecessary harassment if you take some precautions. Credit Card companies have come forward to help you in many possible ways. Most cards these days have photographs of the cardholder. This has negated the possibility of face-to-face purchases with stolen credit cards. Most of the present-day cards have holograms or hidden images, secret imprints, etc. and so the fraudsters find it impossible to make a new credit card with just the stolen card number.

The remaining responsibility lies with you to prevent credit card fraud:

• Do not lend you credit card to anyone.
• Do not give your credit card number over phone, before you have proof that they actually need it.
• Make sure that nobody is watching when you are typing your PIN.
• Safe keep all credit card details, expiration dates and phone numbers, et al. You must sign new cards as soon as you receive them and destroy all expired cards.
• Never sign a blank receipt or leave blank spaces on your receipt.
• Keep a note of all your credit card transaction by filing receipts as proof of the purchases.
• Compare credit card bills with your receipts to check any anomalies. Report billing errors with the credit card company within 60 days and you will be protected under the Fair Credit Billing Act.
• Tear up your receipts and anything bearing your credit card number.
• Be very careful and try to avoid misplacing of credit cards. In case a credit card is stolen or lost, report immediately with the credit card company. They will cancel your card and you will be protected against credit card fraud.

These days, credit card companies activate new cards only when legal cardholders confirm their identity to the bank by providing card number, Social Security number, etc. Moreover, banks have now introduced smart chip cards, which cannot be copied using a stripe reader.