What is Credit Fraud?
Credit fraud is a growing problem and is something that can not only hurt your credit score but potentially have a long-term impact.
Credit fraud happens when somebody else uses your line of credit, credit card or uses your identity to get a loan. The most common form of credit fraud is when somebody "clones" your credit card or gets your information and uses your credit to buy anything from dinner at a restaurant to a car detailing service.
How to Detect Credit Fraud
Most modern banks and credit unions have their own mechanisms for detecting credit card fraud, so in some cases, they may call you and tell you that there has been a problem. In order to go undetected, most fraudulent credit card purchases are not for large amounts. Fraudsters will sometimes pretend to be your financial institution to steal information. If you receive a call, hang up and call the number on the back of your card.
If you feel that you may have been the victim of credit fraud, these are a few suggested next steps:
- Use a credit monitoring service to monitor your accounts and credit reports for unauthorized use or sudden changes.
- Turn off auto pay on your credit cards. It's a pain, but doing so forces you to check your statement before paying, and then you may spot a charge you know you didn't make. This includes small purchases, as some thieves will test the card to see if you're watching.
- Watch for charges from weird geographical locations.
Often, your financial institution will spot suspicious activity, but an extra set of eyes is always good.
9 Ways to Prevent Credit Fraud
It's not always possible to prevent instances of fraud. However, you can significantly lower your risk by:
- Keeping your sensitive, personal information secure. Don't give out information over the phone (31% of fraudsters call first and 27% text).
- Shred anything that has your card number on it before trashing it. Thieves can and will rifle through the trash.
- Look for skimmers when using an ATM or any machine that takes credit cards. Gas pumps are a common target. The fraudster fixes a bogus card reader on top of the real one.
- Try not to allow waiters and bartenders to leave your sight with your card. Don't leave your credit card with the bartender to keep your tab open; if they try to insist on that, pay for each drink individually (this also prevents you from leaving without your card).
- Don't store your credit card information at e-commerce sites if at all possible. Using PayPal or similar can reduce the need to do this.
- Don't online shop on public Wi-Fi networks. Always look at the top of the browser before entering credit card information and make sure that the little padlock icon, indicating a secure site, is visible. Be sure not to enter credit card information on unsecured sites. Also, make sure you are on the site you think you are by double-checking the URL.
- Don't make credit card purchases over the phone before verifying the company you are paying.
- Avoid businesses that only have a magnetic card system. When possible, use chip technologies.
- If going on vacation, leave as many of your cards behind as possible. Choose one card to put all of your vacation expenses on and take only that card, or use a mobile wallet. That way if your pocket is picked, you don't lose as many cards.
How to Report Credit Fraud
If you believe you are a victim of credit card fraud, talk to your card provider immediately using the number on the back of the card. At ProFed, you are only liable for the first $50 if you report promptly and many companies will give you all of your money back. However, if you don't report promptly, they may not be able or willing to refund you.
Report lost or stolen cards immediately. If you are a ProFed member, call 260-373-1632 during business hours, or 888-373-2880 after hours.
How to Stay Safe
ProFed provides a variety of features to help with credit security. We provide information and resources to help you protect yourself, credit monitoring to allow you to detect fraud faster, and many other features to support your safety. To find out more, contact ProFed today.
