There are a variety of ways that thieves can get your information and use your cards to make purchases. Here are a few of the more common ways:
You pay for dinner at the restaurant with your credit card. Your waitress takes the card to the register, processes the transaction and returns it. What you didn't see was the copy of your card details that she made, and later used it to make purchases online and by phone!
You can't believe your luck when you get a mailing that says you've won a free trip and all you need to do is join a travel club to get the free trip. After providing your credit card details to join the club, you never get the free trip and you start seeing charges on your statement that you didn't make!
A thief finds copies or receipts of items containing your credit card details in the trash and then uses the information to make purchases.
Fraud like these examples cost cardholders and credit lenders several hundred million dollars every year. While you cannot prevent all fraud from occurring, there are reasonable things that you can do to help prevent and protect against credit fraud.
When using your credit card to pay for dinner at a restaurant, draw a line through all the lines above your signature that do not contain money amounts. So if you have left a cash tip on the table for th server, draw a line through the tip line on the receipt, or even write "left on table" in the space to make sure that the server doesn't add a tip in after you leave! Try to keep an eye on the server when he or she takes the card to the register, processes it and returns to your table.
When you get a new credit card, sign the back as soon as you receive it. Carry credit cards in a different place from the rest of your cash, and even someplace other than your wallet if possible. Save all of your receipts so that you can compare amounts to your actual billing statements, and open the bills when they come in and verify that they are correct each month. Reconcile the account in the same way you would a checking account to make sure everything is correct.
When you are moving, notify your credit card companies immediately with the new address so your statements are not finding their way into someone else's hands at the old address.
Don't ever write your account number on the outside of an envelope, or on a postcard. Anyone could notice it and write the information down.
When shopping online, make sure the websites that you are shopping from are secure. They should have an "SSL" certificate displayed, or at least have a domain starting with "https", where the "s" indicates it is a secure page and it's okay to enter your card information.
If you must provide your credit card information by phone, be sure the company you are giving the information to is reputable.
Open your statements each month even if you know you did not make a purchase. Make sure that there are no purchases on the account that you didn't make. If a purchase shows up on your billing statement that you are unsure of, call the company and find out who it is, and what they sell and see if you did make the charge and simply forgot. If you still don't know who the company is, or know you did not make a purchase--get on the phone and call the card company as it is most likely a fraud case.
If you still find yourself a victim of credit fraud, you need to immediately call the credit lender. Once reported, the law protects you against any liability for unauthorized credit charges, and you will only be liable for up to $50, which is the maximum liability according to federal law.
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