What to Do If You Get Hit by Credit Card Fraudsters
There’s no escaping it: being a victim of credit card fraud can be a real shock to the system.
Putting the financial turmoil aside, it can wreak some serious damage on your emotional state.
Your first instinct might be to go into denial or panic mode.
This is followed, inevitably, by feelings of shame, embarrassment and self-blame.
You may even find yourself retracing your steps, trying to figure out exactly what you did to leave yourself open to fraudsters. Like that time you used public Wi-Fi to do a quick spot of online shopping. Or how about when you opened and answered that email asking you for personal information?
At this stage, it’s all too tempting to wallow for a little longer than we should. But, like any other problem, the only way to resolve it is by tackling it head-on.
(And *spoiler alert*, yes, credit card fraud is totally fixable).
So, without further ado, here’s exactly what you need to do as soon as you notice signs of fraud on your credit card:
Here’s what to do about fraudulent charges on your credit card
In the immediate aftermath of uncovering a fraudulent transaction, it’s natural to feel vulnerable and helpless.
You don’t have to wallow in misery. Instead, take back control by following these steps:
Check your statement
In this case, you can’t delay the inevitable. You just have to look at your credit card statement to assess the damage. Heartbreaking, we know. But remember the sooner you undertake damage control, the sooner the resolution.
Notify your credit card company
When you’ve discovered fraudulent charges, then you must call your credit card company immediately and inform them about any illegal use. They’ll cancel the card right away and set up an alert so you’ll be notified if those pesky criminals try to use it again.
File a police report
If you want to press charges against the fraudster, then you have to involve the police. This often happens in cases when a large amount of money is stolen. In some situations, you may even have to solicit legal advice on what to do next.
These police reports can help protect you from the potentially negative consequences of fraudulent transactions. This is especially important when a company’s credit card has been compromised or in situations when illegal items have been purchased.
Set up a fraud alert
Report the issue to the main credit reporting agencies in your state or country. By setting up a fraud alert, you also get notified if criminals continue to attempt to use your card.
Don’t forget to file a dispute and get the fraudulent charges removed from your credit report. This can help ensure your credit score doesn’t take a dive, affecting your ability to file for loans or mortgages in the future.
Check your accounts with ecommerce sites
Any online accounts where your credit card details are saved are easily compromised.
Were there illegal transactions made? Contact the website’s support team or administrator to report the fraudulent charges.
Change your online passwords
Repeat after us: change your online passwords.
If you experience any kind of data breach or if your identity has been compromised in any shape or form, the first thing you have to do is change all your online passwords.
Why? Well, your compromised account may well be linked to other online accounts. Say, for example, your email address was hacked. This email address may be connected to your online bank account or social media profiles. The fraudster may have gotten into all these already but it’s still important to change the passwords just in case.
Keep a close eye on your statements and credit reports
The sooner you catch unusual activities on your account, the less the damage. Nip it in the bud as soon as possible. Different banks may have different forms but be sure to have justification or evidence that you were not personally responsible for any fraudulent transactions.
For example, you could be able to prove that you were in another country during the time of a fraudulent in-person transaction.
Or, you don’t have an account with the website where your credit card has been used. (You can even contact the website administrator and gather evidence to show the transaction may be under another person’s name and email address.)
Questions and answers about credit card fraud
Here are some of the frequently asked questions about credit card fraud:
What is credit card fraud?
If it’s any consolation (and it really should be), you’re far from the only person who’s fallen victim to credit card fraudsters.
Sadly, credit card fraud has become an everyday occurrence in our lives. According to the Federal Trade Commission and Consumer Sentinel Network, in 2018 alone, there were 163,257 reported cases of credit card fraud in the US. In the past year alone, SmartMetric reported that $24.26 billion was lost due to global credit card fraud. That same year also saw an 18% increase in credit card fraud.
Credit card fraud is a term used for malicious and illegal transactions using a credit or debit card. This is usually committed by someone other than the card holder to obtain products or services for their own benefit.
How common is credit card fraud?
As we touched on earlier, individuals and companies are losing billions worldwide due to payment fraud. Most victims live in the USA, with 157,688 cases of fraud reported in the US in 2018, an 18.4% increase from the previous year.
What are the different kinds of credit card fraud?
As unsettling as this realization is, credit card fraud can happen even if your physical card is not present. Read on to find out the most common types of crimes involving credit cards:
1. Application fraud
This happens usually in connection with identity theft. When a person gathers a lot of information about you - specifically, information needed to apply for a credit card - then they can easily pretend to be you but use the credit card for their own gain.
On billing day, the company may charge you unaware a completely different person (who is just pretending to be you) is using the card.
2. Credit card skimming
There are instances when criminals illegally install credit card readers within the vicinity of ATMs. Other times, they have a handy device to read information stored in your card. They just need to be physically near you to allow the reader to capture the information.
This is called credit card skimming. Once they have your details, they can easily clone your card. They do this by uploading your credit card data to a blank card, then using this like the original.
3. CNP (Card Not Present) fraud
Can criminals steal from you even if they don’t have your physical card? Yes they can (and they will).
They only have to know your credit card number and card verification code to use your card for online transactions.
Now, if you fell victim to any of the illegal tricks mentioned above, you may start to notice suspicious activities in your credit card account.
It’s important to remember to never ignore any signs of potentially fraudulent activity, regardless of how small the amount. This is because most credit card fraudsters test the waters first by trying to transact with small amounts before buying expensive items.
Is credit card fraud considered a form of identity theft?
Credit card fraud is a form of identity theft because another person is using your personal data. That person could only apply for a credit card under your name by having your personal information in the first place!
Will I be penalised for any fraudulent charges on my credit card?
The answer should be no but some banks may ask you to pay the monthly or annual usage fee for the credit card.
Be sure to check with your credit card provider for their policies about credit card fraud.
Is credit card fraud considered a felony?
First, what is a felony? In the US, a felony is a criminal offence considered more serious than a misdemeanor.
A crime classified as a misdemeanor is anything that can land you up to 12 months in jail. The definition of misdemeanors varies between countries but the more common ones are traffic offenses, illegal gun possession, assault and battery.
Now, let’s go back to felony. If it’s a more serious charge, then is credit card considered a felony or misdemeanor? This may actually depend on how much was stolen. Several states in the US would classify a crime as a misdemeanor if the amount stolen does not pass $500. If it does, then it would be a felony. Felonies are punishable by a fine of up to $25,000 and as much as 15 years in prison.
Do banks investigate credit card fraud?
Your worst fear realised - the bank may blame you to get out of paying back what you’ve lost. That’s not really how they operate though - most banks have protocols in place to deal with credit card fraud.
Different banks have different resolution or waiting periods and this can also depend on the gravity of the situation. Always remember to ask for a ticket number or reference number for your case so you can follow up with your bank.
How do credit card companies catch fraud?
Credit card companies may flag transactions especially if they’re not reflective of your usual shopping habits. For example, if you are known to only use your credit card for small purchases but then one day you have made a larger purchase. (For instance, if you usually just use your credit card to buy groceries and the next day you’re buying a yacht.) This can raise the suspicions of your credit card provider.
Another dead giveaway is location. If you live in Asia but your card was suddenly used in the US without prior travel advisory, this may mean someone else is trying to use your card.
Any other transaction that doesn’t fit into your lifestyle or habits can be flagged by your company. Usually, they send you a message about the card use, then you can reply “Yes” or “No” as to whether you authorized the transaction.
Another way to verify larger transactions is by two-factor verification. If a transaction is done online, they may send you a code that expires within minutes to your phone. You need to encode this to finalize a transaction. If the hacker has your card details but not your phone, then of course they wouldn’t be able to push through with the order.
How does credit card fraud detection work?
As previously mentioned, banks and credit card companies have systems in place analysing customer data. They try to recognize patterns and spending profiles of their clients. If anything seems out of the ordinary, they inform their customers right away.
And believe us when we say they do invest in the technology and infrastructure to detect irregular transactions. According to Forbes, merchants lose about $190 billion every year due to fraudulent transactions.
They also try to notice behavioural patterns of fraudsters such as attempting to make a small purchase before a bigger one. These kinds of patterns raise a red flag and help alert the system right away.
Is there anything else I can do to protect myself against credit card fraud?
There is never a guarantee you can avoid becoming a victim of fraud, but you can take these steps to safeguard yourself against possible attempts:
1. Protect your identity to prevent theft that could lead to fraud.
2. Regularly check your statements. This way, you’ll be able to quickly spot irregular or unauthorized transactions.
3. Be more mindful where you use your credit card and make sure you only use them at legitimate websites or institutions.
4. Be on the alert for phishing scams. These are websites or emails trying to trick you into giving up your credit card details.
5. Give your credit card company a heads up when you plan on traveling (and not just so they don’t freeze your account). This way, they can immediately flag if any transactions are taking place in unusual locations.
6. Set a reasonable credit limit for your needs. If you find yourself not spending a big amount of money on a monthly basis, ask your credit card company to reduce your credit limit. That way, if hackers ever get a hold of your card, they won’t be able to make large purchases.
7. Always use a website safety-check tool, like Google Safe Browsing, when shopping online.
8. It might also be a good idea to look into purchasing software able to alert you when your personal information is used to help you recover any money lost from credit card fraud.
We hope we haven’t scared you too much about the grim reality of credit card fraud and you still have some faith in the good of humanity. Believe us, there are still good people out there.
While there are criminals who try to trick honest people like you and me, there are also organizations fighting to solve these challenges. At Clario, our easy-to-use online security products educate users about potentially dangerous websites to protect them from online scams.
So, you don’t have to live your life always looking over your shoulder. With Clario, you can live your online life freely and securely!
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