You open your monthly credit card statement and receive a shock: Someone is enjoying a big screen TV purchased with your card, and it’s not you.
You've just been hit with credit card fraud, a rampant form of theft responsible for nearly one-third of all identity theft complaints filed with the Federal Trade Commission (FTC). When criminals use stolen credit card information online or by phone—instead of in person at a store—it’s called card-not-present fraud, and it’s on the rise. According to Javelin Strategy & Research, there was a 40 percent spike in card-not-present fraud in 2016 and a 60 percent increase in losses caused by thieves taking over existing credit card accounts.
How thieves steal your information
There many ways credit card fraudsters attempt to steal your identity to gain access to your credit. Some techniques rely on trust, some take advantage of careless habits and others confuse you with technology. Here are some of the more common methods used:
• Old-school theft: Leave your purse or wallet unguarded in public and it may vanish. The thief either uses your credit cards or sells them to a larger criminal operation.
• Pilfering your mail: Credit card fraudsters look for ways to open new cards in your name. If they can find credit card offers in your mail, they can order a new card and come back later to steal it out of your mailbox.
• Digging through the trash: Unless you are careful to shred any records with identifying information, your trash can be a treasure trove for identity thieves.
• Skimming: This technique involves photographing your credit card to gather the number, expiration date and security code, then watching while you enter your PIN.
• Phishing online or by phone: Thieves use an email or a phone call that looks or sounds like an authentic communication from your card provider. You are asked to confirm your account number, name, Social Security number, or even account login information.
• The big haul—corporate breaches: Hackers compromise the payment databases of major corporations and steal stored credit card information from thousands of customers, leaving you vulnerable to fraud if your credit card number was among those stolen. In the U.S. and Canada, companies are required by law to inform you if a breach occurs.
4 tips to protect yourself now
Use these tips to fight back against identity thieves and protect your credit card information:
1. Gather your mail promptly. If you will not be home for even a few days, request a mail hold from the U.S. Postal Service.
2. Shred before trashing. Look over bills, old tax returns, medical records and other papers for identity information. If in doubt, shred it.
3. Don’t take the bait. Phishing is one of the fastest growing methods of identity theft. If an email looks strange, don’t click on any links. Delete it and instead call the number on the back of your card. Don’t give credit card information to anyone who calls you. Instead, call the company or charitable organization yourself.
4. Look over your shoulder. Guard against skimming by being careful to shield the keypad with your body when you enter your PIN in public.
If you become a victim of credit card fraud
Take action. According to the FTC, prompt reporting of a lost or stolen card limits your personal liability to $50 and ensures you won’t be responsible for additional charges. Take these steps to protect yourself from further fraudulent activity:
1. Call your card issuer and report the situation.
2. Report the theft at the FTC website IdentityTheft.gov or call their hotline at 877-438-4338. This will give you an affidavit you can print out for the police.
3. File a local police report.
4. Ask all three credit bureaus—Experian, Equifax and TransUnion—to flag your account with a 90-day fraud hold to prevent thieves from opening additional accounts.
5. Delete payment information from online companies or subscriptions where you stored that credit card.
6. Get an identity management service to monitor and protect your identity.