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Credit Card Fraud
The Bad and The UGLY

Credit card fraud is a continuing threat for consumers. "What's this charge on my account? I have my credit card, how did it get there?" I'm asked these same questions everyday. It's virtually impossible to answer them specifically because there are so many types of credit card fraud. You don't need to have a stolen credit card to be a victim of fraud. I want to share with you information about this and other types of credit fraud.

Lost, Stolen, or Never Received Cards

One type of credit card fraud occurs when your credit card plastic is lost, stolen, or never received. This allows the perpetrator to use your physical credit card to make unauthorized charges on the account. It's imperative that you report these events to your credit card issuer immediately. Your current account needs canceled and a new card issued.

Stolen Account Information

If your account number and expiration date are stolen, credit card fraud may be committed through mail, phone, and internet transactions. These types of charges do not require a physical card present unless the merchant requires the card verification code. This code is the last three digits on the signature strip of the credit card. Not all vendors require this, but a majority do for your protection. Read about some other ways your credit card is protected.

Counterfeit Credit Cards

Counterfeit credit cards may be fabricated by criminals that obtained your account number and expiration date. Criminals may collect the needed information many ways. Once the criminal has this information, they make a fake plastic. To verify that the counterfeit plastic will function, the criminal will take the card to a gas pump or some other form of self checkout. Most credit card issuers will detect this as suspicious activity, especially if the charges happen out of your normal spending pattern or outside of your state. More about credit card fraud detection.

How do Thieves get my Credit Card Information?

There are dozens of ways in which a crook can obtain your credit card information. Here's a list of the most common.

Your account information is at risk anytime your credit card is in the hands of a corrupt employee when you're not present. For example, at a restaurant when the waiter/waitress takes your card to run the bill.
When you provide the account information to mail, phone, and internet vendors, corrupt employees may access it.
Thieves may acquire your information from you when you respond to a fraudulent email or input the information on a phony website.
An account compromise, where a merchants database is breached, or hacked into, and your account information along with thousands of other people's are taken.
Your account information may also be purchased from a criminal whom already stole it from you!

As you can see, there are numerous ways for a thief to obtain your credit card information. Get some tips to avoid fraud.

Credit Card Fraud

Credit Identity Theft

The final form of fraud I am going to discuss is credit identity theft. Credit identity theft happens when a thief obtains your social security number and other personal information with intent to set up credit accounts under your name or takeover existing account you may already have. The accounts are used by the thief and the bills are not paid. This type of identity theft may ruin your credit and end up costing you thousands of dollars. More information concerning identity theft. If you have already been a victim of identity theft, the best suggestion I have is to verify that you have placed a fraud alert on your credit bureau report.

I've covered many types of fraud related to credit cards here. Unfortunately, thousands of people encounter at least one form of fraud in their lifetimes. Honestly, I haven't yet, but am waiting on the day for it to happen. Please contact me if you have any questions that I have not covered about credit card fraud.