Credit card fraud has increased dramatically in recent years, according to law enforcement officials and consumer protection organizations such as the Public Interest Research Group and the Privacy Rights Clearinghouse. Today, more consumers have credit cards than in the past, and criminals are constantly looking for new ways to run their accounts. All of this means that cardholders need to protect their credit cards more than ever before.
Perhaps the most obvious form of credit card fraud is theft. Even if you do not lose your card or have it stolen, your credit card account may still be in danger. It is not uncommon for criminals to steal your credit card identity – details such as the number on the card and the expiration date. A stolen account number is the first step in a series of credit card fraud incidents. Unfortunately, cardholders may not be aware of the flight until unauthorized activity begins to appear on the bills.
Identity theft occurs when your personal information is collected without your permission and used for criminal purposes. This happens when someone steals information that identifies you, such as your name, address, date of birth, or social security number. Sometimes you have to submit this information when you apply for a credit, open a new bank account, or make a purchase. If someone accesses these accounts or transactions without permission, your information could be in jeopardy. According to a survey released by the Federal Trade Commission in October 2007, about 13.5% of US adults (30.2 million consumers) were victims of one or more incidents of identity fraud in 2005.
Credit card thieves can come in two forms. The first are perfect strangers and the others belong to the category of people you know. This second group can include anyone ranging from friends and family members to neighbors, co-workers or anyone with whom you have an established relationship. More than half of the cases of identity theft committed are committed by criminals who have established relationships with their victims.
This does not mean that you should be wary of all your friends and in-laws. You must, however, know some warning signs. Here are some of the common methods used for identity theft:
– Someone may steal your wallet or purse. When they have the opportunity, they have instant access to your credit cards and your banking information.
– Your personal information may be extracted from the information you submit on the Internet.
– Fraudsters can locate your discarded receipts by looking through your trash. If your name or account number appears on the receipt, they can use it to their advantage.
– A store employee can make an extra copy of your credit card or extract the numbers.
– Your utility bills, credit card and bank statements, tax information and new checks can be managed in stages to land in the wrong place.
– You can receive a phone call or an e-mail offering a free trip or a cheap travel package. To receive it, however, you must indicate your account number. Once you're done, the source can start using your card number to make unauthorized purchases.
After collecting your personal information, scammers can change the mailing address of your credit card account by calling your creditors and opening new lines of credit. In some cases, they could do more than just rack up purchases on your card. They can open bank accounts in your name, apply for loans in your name, or create new phone accounts. The list of possibilities is almost endless.
New credit card crimes
One of the most recent methods used by identity thieves is called skimming. In this technique, a small portable electronic device called skimmer is used to collect information embedded in the magnetic stripe of the card. With a simple swipe of your card in the hand skimmer, all your personal identification information is collected in one second. It is then used to create a counterfeit card or make purchases online.
Crime offenders are constantly testing different technologies to combat identity theft. Fortunately, many organizations are fighting credit card crime by developing new encryption techniques. Companies are doing everything in their power to help individual consumers keep their confidential information confidential.
Despite various improvements and efforts, almost everyone can be a victim of identity theft. And it can be stressful to find unauthorized charges on your personal credit card bills. Most credit card companies will cover the amounts charged to your card in case of fraud. Nevertheless, it is in your interest to do everything in your power to protect your credit card as well as your personal identification information. Prevention is always better than cure!