Tuesday, November 13, 2007

Credit Card Fraud


Not long ago a woman dined at a favorite restaurant. She paid by credit card. When she received her next credit card bill, though, she was shocked. She saw charges of several hundred dollars for things that she didn’t buy.

Credit card fraud is increasing. It costs businesses billions of dollars each year. And it costs you, too. Businesses pass these costs on to you in the form of higher prices, interest rates and fees. If you are victimized by a credit card scam, you also pay with your time and inconvenience getting your credit cleared.

You are not usually required to pay unauthorized charges – especially if you call the credit card company immediately after discovering a problem.

When the woman at the restaurant called her credit card company, they said she was a victim of “skimming” – a growing area of credit card theft. At the restaurant an employee probably ran her credit card twice, once for the meal charge and a second time on a magnetic card reader. The employee then copied the data onto a blank credit card and sold it to a third person or used it personally. The woman didn’t have to pay for the unauthorized charges.

Today, you, like most people, undoubtedly use credit cards routinely. Few people pay cash. Credit cards are just so convenient. And even though fraud is increasing, the good news, consumer advocates say, is that credit card theft is one of the easier crimes to prevent.

Credit card companies are taking steps to make the cards more secure. Some display a photograph of the cardholder so criminals can't make face-to-face purchases with a stolen credit card. Most cards have holograms, secret imprints, or hidden images so thieves have a harder time making a new credit card with a stolen card number.

Despite these improvements, you still be a victim of credit card fraud. Even though credit card companies usually won't make you pay for the merchandise that thieves buy, it can be nerve-wracking to lose a credit card or find unauthorized charges on your credit card bill. That's why it's important to protect your credit card, your credit card number, and your credit card sales slip.

Protect your credit cards:

Use common sense when it comes to your credit cards. Don’t lend your card to anyone else. If you want someone else to use your credit card, go with the person and do it yourself. Some other tips:

  • Only carry one or, at most, two credit cards.
  • Don't write your PIN (personal identification number) on your credit card. This prevents thieves from using your card and PIN to withdraw money at an ATM machine.
  • Write down the phone numbers of the credit card companies and keep them in a safe place to have them handy if a credit card is stolen or lost.
  • Immediately report lost or stolen cards to the credit card company. The credit card company can stop the thief by canceling your credit card and number.

Guard Your Credit Card Number

Thieves don’t need your credit card to charge merchandise to your account. They only need the card number. Criminals use stolen credit card numbers to make purchases over the phone or through the mail. Sophisticated lawbreakers can even make a new credit card with your name and number on it.

If you receive an offer for a new credit card in the mail and don’t intend to use it, cut up the application form into several pieces. Some crooks go through trash looking for discarded but still usable applications in your name. Also,

  • When checking out at store registers, shield your credit card from the people around you. Someone might be looking over your shoulder to copy your number.
  • Don't give your credit card number to telemarketers unless you are sure they represent a reputable company or you placed the call. Con artists pretend to sell you something just to get your credit card number.
  • Con artists also may pretend to be your credit card company or bank and say they need to verify your card number because of some “computer problem.” Don’t fall for this scam. Verify directly with the credit card company using the telephone number on your card, not the number the caller may give you. They number they give on the phone you may be false.
  • Make sure your transactions are accurate. Be on guard for dishonest merchants who might change your credit card slip after you sign it.
  • Always add up your charge slip before signing the credit card receipt. Don't leave blank spaces where additional amounts could be added.
  • Never sign a blank charge slip.

Check Those Receipts

  • Keep track of your credit card receipts as proof the purchases you actually authorized.
  • Read your monthly billing statement carefully to see if it includes purchases or transactions you did not make. Report any to the credit card company right away.
  • Always check your receipts against your billing statement. If you think a charge amount was changed, call your credit card company immediately.
  • Shred your receipts and anything with your credit card number on it. Thieves go through trash looking for this valuable information.

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