Finance

Best Ways to Prevent Fraud on Credit Card with Identity Theft Detection

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This article explains the very best way to prevent credit card fraud in the US. You can reduce your risk for credit card fraud with good credit card safety habits. You can use mobile payment apps to avoid skimming.

In 2021 and 2022 alone, there were several reports by Federal Trade Commission (FTC) that Credit card fraud was the most frequent type of fraud. According to the report, a whopping $149 million is the total loss due to credit card fraud.

Even though it is very important to be aware of the right steps to take if you’re a victim of credit card fraud, adhering to credit card safety is also vital. You don’t nee to wait till it happens, simply start from the moment you get a new credit card because it will definitely go a long way toward credit card fraud prevention. Before we continue, please check out these similar posts below;

Now let’s take a look at what you’ll learn in the course of the article:

  • Difference between Credit card fraud vs. identity theft.
  • Simple steps on how to prevent credit card fraud.
  • How to generally make credit card safety a habit.

Difference between Credit Card Fraud vs. Identity Theft

Lets start by saying that they quite similar, but identity theft is broader in its reach. Now, a professional thief who is able to steal your identity might use your personal information, such as your Social Security number to commit a crime. The thief can even use these biodata to open a new credit card account, apply and get a loan or even file taxes documents in your name. This alone can put the original identity owner to fall into heavy dept.

While on the other hand, a Credit card fraud is a form of identity theft that happens when your account is used for unauthorized transactions online. A clear example is when you check your credit card account online, you might notice some unknown charges like payments you didn’t make. It is a very known fact that almost all the major card issuers offer zero liability on fraudulent purchases. Therefore, it’s your sole responsibility protect yourself and your card details. You have to be on the lookout for online fraud as well as to report all suspicious transactions to the appropriate authorities as soon as possible.

In a further explanation, there’s currently no foolproof strategy that gives you total credit card fraud protection against online thieves. However, there are some everyday actions that can increase your fraud risk drastically. Nobody wants to loose money, so this article is worth your time to learn how to practice credit card safety daily.

Simple Steps on How to Prevent Credit Card Fraud

In recent times, there are different ways scammers use to try to fool you or possibly steal your information. The FTC Fraud reports for 2020 down to 2022 increased over the previous year, which isn’t surprising given the COVID19 pandemic. Again, during a crisis that leads to a lockdown or curfew, fraudulent activities tends to be on the rise. The perpetrator of these crime are always hoping to catch you when your guards are down. They always wait for your vulnerable moment.

Most of the time, simply knowing the information of what to look out for can go a long way to help you make better decisions as well as averting credit card fraud. Bearing in mind what we a saying, Let’s continue by looking at some simple ways to prevent fraud:

  • Avoid untrustworthy and unprotected webpages. Don’t use unsecure websites.
  • Do not click on unknown links on emails. Beware of phishing scams.
  • Watch your back and be on the lookout for skimmers.
  • Stop posting sensitive information on your social media.
  • Get comfortable with mobile payment apps.
  • Ensure you always shop in stores that have chip readers.
  • Don’t save your credit card information online (laptops and phone).
  • Make use of a virtual credit card number online.
  • Carefully make use of a strong password manager.
  • You can get a token (chip card with PIN capacity).
  • Avoid free WiFi. Don’t trust public Wi-Fi for financial transactions.
  • Call your bank to set up a fraud alert or credit freeze if your card is lost or stolen.
  • Lastly, always carefully review your credit reports regularly.

1. Avoid untrustworthy and unprotected webpages. Don’t use unsecure websites.

First, let’s just begin with something basic that’s really easy to do. A website is secure if you see a padlock on the left side of the address bar at the top of your browser. Close to where the URL is located.

Furthermore, look closely, the web address usually begins with HTTPS. Please, do not ever enter your personal data or credit card number on a website that isn’t secure. Come on, let’s be honest, if an online business owner isn’t offering data security for its customers, it doesn’t deserve your patronage.

2. Do not click on unknown links on emails. Beware of phishing scams.

All these scams we hear about can happen either by phone, email, SMS text message or even snail mail. The objective of this choice of method is for you to unknowingly hand over your financial information. The scammer might call and pretend they are from an institution you trust, such as a bank or the Social Security Administration. Take a look at the FedEx Text Scam Alert Updates: Fake Delivery Notifications SMS as an example.

Let me give you a personal experience with them recently. Two months ago, I got a call from the SSA and was told I needed to confirm my Social Security number to continue getting Social Security checks. I thought about it, I don’t previously get Social Security checks. So why request it now? However, since I knew this was a common scam because I was knowledgable, I was suspicious from the very start. To even make it more convincing, the caller’s ID was even showing SSA, meaning that the call was official. They are all lies, because there’s nothing computers and mobile phone can’t do these days.

Scam Sophistication

I won’t lie to you, today’s scams are technically sophisticated. Possibly, you might get an email with what appears to be your bank’s logo and name. Ironically, you might assume it’s legitimate but its not. If the email requests you reply with your credit card account number, just know it’s fake. This is because, no financial institution will call, text or email you with a request for your card number or PIN.

A government or financial institution will never ask you to give sensitive information that way. One other very fast way to spot these scams is if you see typos in the mail or SMS. These online thieves can be clever, but they often can’t spell English words correctly.

3. Watch your back and be on the lookout for skimmers.

In recent times, Credit card thieves many a-times use a device called a skimmer to steal your credit card information. During odd hours, they try to hide these devices on public ATMs and fuel pumps. Why? So that they can “skim” (copy) the data from the magnetic strip on the back of your credit card without you noticing.

One nice tip for you; whenever you pay for gas/fuel at the pump or use an open Automated Teller Machine, look for signs of tampering. If you have any doubt about the POS, simply pay for your gas inside the store. More importantly, if it’s an ATM that looks altered, simply look for another ATM that’s affiliated with your bank. In fact, you can choose to use your EMV chip credit card if you can, though not at an ATM. Get a ‘token’ from your bank for online transaction. Note that not only do credit card issuers typically charge higher interest rates on cash advances, but they also typically start charging interest immediately. they might not give you any grace period.

4. Stop posting sensitive information on your social media.

This advise for those people addicted to posting things on their social media handle without thinking of the negative implications. Hmmm! if you think this doesn’t need to be said, then spend lesser hours on any social media platform. On top of that, if you have older kids online, give them a serious talk/warning about this issue. Online thieves take al day combing through social media accounts looking for clues that they can put together about your life and your financial data.

Another Tip: Don’t use your spouse, children or pet’s name for a password.

5. Get comfortable with mobile payment apps.

Understand that your credit card information is less likely to be skimmed at an in-store card reader (or POS), but the threat still exists anyways. Basically, you can increase your credit card fraud protection by using mobile payment apps, such as Apple Pay, Samsung Pay, PayPal or Skrill.

Yes, these apps make use of a technology known as tokenization. This tech allows you to pay without exposing your actual credit card account number. So even if by mistake your transaction information falls into the wrong hands, fear not coz your actual account number remains safe.

6. Ensure you always shop in stores that have EMV chip readers.

Making use of EMV chip cards offer some protection because its not so simple to clone these cards. However, there are still some small retailer outlets that only have magnetic-strip cards. But if possible, try to limit your purchases to stores that accept chip cards.

As earlier mentioned with ATM skimmers, chip cards have an extra layer of fraud protection. However, bear in mind, though, that when you shop online, that extra protection doesn’t actually exist. This is known as card-not-present fraud. Why is it so? Its because you’re giving the site your credit card account number but you’re not making use of the chip technology. When you are making payments online, you don’t completely have the benefit of the chip-enabled security that occurs when you use your cards physically.

7. Don’t save your credit card information online (laptops and phone).

I am personally guilty of this because I know this is a tough rule to follow because it takes time. But trust me, you have to stop it just as I did. Simply, find your credit card and type in the account number, CVV and PIN. Do this, even with retailers you trust, because a data breach can occur anytime without warning. Also, you could loose your phone or laptop and the thief can access them to make purchases. So it’s not a good idea to store your account information on a website. Believe me, if you can handle typing in your card account number each time (even though it seems frustrating), it’s an effective way to decrease your fraud risk to the minimal.

8. Make use of a virtual credit card number online.

To be sincere, this feature isn’t offered by many credit card issuers, but if your issuer does, take advantage of virtual numbers. Yes! Here’s how it works: By using your issuer’s tool, you can always request a virtual credit card number to use online. With that, you’ll get a unique virtual account number to help you make a purchase instead of your actual credit card number.

So, since we know your chip credit card doesn’t give you extra protection online, a virtual credit card number helps boost credit card fraud protection. In any case of the retailer suffering a breach, your actual credit card number is safe from online thieves.

9. Carefully make use of a strong password manager.

One of the rules with using passwords is that you should refrain from using the same password across multiple sites. If a thief gets hold of one of your passwords, say for your credit card account, the thief will try that password on your checking account.

See the problem? And yes, keeping track of all of your complicated passwords is a pain, for sure. That’s why you should use a password manager. There are some excellent password managers, such as Bitwarden and LastPass, that come free or with upgraded paid accounts.

10. You can get a token (chip card with PIN capacity).

Most credit cards in Europe come with a chip and PIN feature, but few card issuers in the U.S. have followed suit. Without a PIN, you’ll not only have a difficult time using automated kiosks overseas, but you may also be exposed to potential fraud.

11. Avoid free WiFi on Banking App. Don’t trust Public Wi-Fi for financial Transactions.

If you disclose your credit card number or bank account over public Wi-Fi, you’ll be vulnerable to hackers because these networks are often unencrypted. Thieves may be lurking in public areas waiting to catch someone off guard and steal their information. Whatever financial moves you need to make, wait until you’re on a secure network.

But this doesn’t mean you have to avoid public Wi-Fi altogether. You can use a virtual private network, or VPN, to keep your information safe from crafty eavesdroppers.

12. Call your bank to set up a fraud alert or credit freeze if your card is lost or stolen.

As soon as you realize your credit card is gone, report this immediately to your credit card issuer so it can freeze your account.

If you aren’t sure how long your card has been missing, the safest thing to do is set up a fraud alert or a credit freeze. With a fraud alert, when a thief tries to open an account, the creditor will typically call you to verify your identity and confirm that you were the one who applied. With a credit freeze, creditors can’t even access your credit reports, making it impossible for them to approve a credit application by an impostor.

13. Always carefully review your credit reports regularly.

You get a free annual credit report every 12 months from each of the three major credit bureaus: Equifax, Experian and TransUnion. You need to review your reports at least annually to make sure all is in order.

For starters, you want to make sure all the data in your report are accurate. If there’s a big error, it’s possible it will have a negative impact on your credit score. You also want to make sure that you don’t see new accounts that you didn’t open. If you do, this is a sign of credit card fraud and possible identity theft. You’ll need to take steps to report the fraud as soon as possible.

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How to Generally Make Credit Card Safety a Habit

Nothing is easy. Anything can happen to anybody even if you are careful. Yes, it’s true that you could be diligent about credit card fraud prevention and still be a victim of fraud. But by doing everything within your power stop it, you will have reduced your risk quite to a minimum.

In conclusion, your last step for credit card prevention: Make sure you always check your online financial accounts several times a week. Make sure you receive alerts for your transactions. Strictly look for signs of fraudulent transactions and report them as soon as possible. Trust me, if you find fraud early enough, you’ll go a long way toward minimizing the financial – and emotional – damage it may cause. Lastly, review this post on How to Dispute and Resolve Debit Dispense Error or Credit Report Error. Best of luck.