We’ve all seen the movies and heard the horror stories about credit card fraud. One minute you’re swiping your brand new credit card without a care in the world, and the next thing you know, your card is declined. It can be a scary and unsettling feeling to know that someone stole your credit card information and possibly even your identity. However, it’s not the end of the world! There’s no need for a cross-country chase à la Melissa McCarthy and Jason Bateman in Identity Thief, but at the same time, fraud should never be ignored. We talked to collegiettes and a few experts to give you all the information you need to know about credit card fraud and how to deal with it if it happens to you.
How do I know if I am a victim of fraud?
There are a few ways to know if you’re a victim of credit card fraud. Usually, your bank or credit card issuer will alert you of any suspicious activity. Jean Chatzky, the financial editor for NBC’s Today Show, says that “you will either get a phone call or an email alerting you to the fact that there has been conspicuous activity on your account.” Make sure that you don’t provide any identifying information on the phone or over email without confirming that it is your bank talking to you. Many scammers will pose as banks as a way to get access to your personal information, so it’s better to be suspicious about everything when it comes to dealing with fraud.
Credit card firms lose a lot of money to fraud, so they have many systems in place to try and detect fraud as it’s happening. Beverly Harzog, a credit card expert and the author of the forthcoming Confessions of a Credit Junkie: Everything You Need to Know to Avoid the Mistakes I Made, explains: “They look to see if your credit card is being used in a place that you wouldn’t normally frequent. If you live in Florida and there are charges happening simultaneously in Alaska, then they might decide to put a freeze on your card.” Credit card firms might issue a freeze if a purchasing pattern is broken or unusual activity is taking place. So if you try to charge something and are declined, contact your bank immediately.
How did the thief get my information?
Credit card thieves have mastered their art, so they really only need a few key pieces of information to commit fraud. If they get your social security number, then that’s really all they need. However, they can also steal your identity by obtaining your basic information. “They need the same information you give over the phone or online when you buy something – name, address, credit card number, expiration date, and the three-or-four digit security code found on the card,” Chatzky says.
There are many different ways that thieves can steal your information. Some thieves will go dumpster diving looking for credit card statements that have been thrown in the trash without being shredded. Other thieves use a skimming device, which Harzog explains “is a device that’s often used by your waiter, at your ATM machine, or at the gas pump where you swipe your card. When your card is swiped, the information is captured and stored by the device.” Other thieves might steal your information by taking a photo of the font and back of your card, as those pictures give them all the information they need.
What do I do if this happens to me?
Roxanna Coldiron, a recent graduate from Hiram College, was the victim of credit card fraud. “I tried using my card to get lunch, but it wouldn’t go through,” she says. “So after I paid cash and ate, I called my credit card company. There had been suspicious activity on my card, so they’d blocked any and all transactions.”
Roxanna did the right thing by immediately contacting her bank when her lunch charge wouldn’t go through. Harzog emphasizes the importance of calling your credit card issuer and letting them know about fraudulent charges if your bank doesn’t quickly reach out to you. “Take action fast. Consumer laws in place will protect you to the point where you can’t lose more than 50 dollars if you are a victim of credit card fraud,” she says. “However, most major credit card issuers will give you zero liability if you notify them as soon as possible.” The Consumer Financial Protection Bureau has got your back, but the sooner you reach out to your credit card issuer, the better!
You also should reach out to one of the three major national credit card bureaus: Equifax, Experian, or TransUnion. Notifying one of these bureaus places a fraud alert on your credit file. “The alert lasts for 90 days,” Harzog says. “When you have a fraud alert on your file, if someone applies for credit, the bureau takes steps to investigate it. They confirm that it’s actually you making the request and not a thief.” Once you notify one of these bureaus, they are required to alert the other two. To contact one of the bureaus, all you have to do is call one of the numbers listed on their websites – it’s as easy as that!
“Credit card fraud calls for patience and diligence,” Harzog says. She advises that victims of credit card fraud monitor their credit card accounts online to be sure that nothing further occurs.
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How do I minimize the risk of fraud?
Unfortunately, college students have a higher chance of experiencing credit card fraud, according to Harzog. “College students are at high risk because you live in an environment where there are always people around,” she says. “You are busy and constantly have people in and out of your rooms, and these people can easily grab your credit card, your personal information, or even a credit card statement you received in the mail.” Anyone could take their smartphone and snap a picture of your account number. In other words, you don’t have total control over your surroundings, which can be dangerous. Harzog recommends opting for online statements instead of paper statements to avoid this situation altogether.
Online shopping can also put you more at risk if you aren’t smart about it. “Make sure you are always on a secure site. If you look up at the URL in the address bar, you want to be sure that there is a padlock icon indicating that it is a secure site,” advises Harzog. An unsecure site is a super easy way for thieves to break into the server and steal your account information. So if you are new to an online shopping site, you should spend some time on it to make sure it’s legit.
You should also use a credit card when shopping online instead of a debit card. “If you use a debit card, then frauds can wipe out your account,” Harzog says. “With a credit card, they can charge things, but there is more consumer protection.”
Chatzky suspects that credit cards have more consumer protection because they have been around a lot longer than debit cards. However, “if your debit card has a Visa or MasterCard logo, you have the same zero liability protection as you do on a credit card,” she says.
Chatzky recommends making all transactions on a secure connection, which means avoid using public Wi-Fi at all costs when you are using your card online. “Don’t shop online or bank online at a coffee shop where someone can look over your shoulder or hop on your connection and essentially grab your data that way,” she warns. “Just be extremely careful of where you give your data.”
Harzog warns collegiettes to not leave any credit statements lying around. “You don’t want to ever let your card out of your sight, especially in a college environment where there are so many people around all the time,” she says. “And never let someone else use your card.” She also recommends shredding any and all documents that might have your personal information on them. If a document contains your social security number, then it MUST be shredded, according to Harzog. However, anything that has your name, address, and birthdate gives a thief enough information for identity theft.
Finally, both Chatzky and Harzog recommend utilizing your three free credit reports. Every four months, you can get a free credit report online at freecreditreport.com. These reports include your identifying information, your credit account information, and a list of everyone who has accessed your credit report within the last two years. “You want to scan and make sure everything looks okay,” Harzog advises. “Is there anything unusual? This is what we call good credit housekeeping and it is something you want to make a regular habit.” Chatzky says that “you want to read the report and make sure everything on there actually belongs… If you see accounts that were opened that you have no recollection of opening, then you need to take action.”
What’s the worst that can happen?
Credit card fraud is typically more of an annoying hassle than a life-threatening problem. In most cases, your bank will take care of it, and the most you will have to do is make a few calls. However, there are extreme cases of untreated credit card fraud that result in identity theft and long-term damage. “The worst case is that it extends to a stolen identity where someone takes out credit or applies for a job in your name,” Chatzky says. “That can be a nightmare that takes years and costs thousands of dollars to untangle.”
Harzog warns that identity theft can ruin your credit score. She explains, “You’ll get it straightened out eventually, but in the meantime, a bad credit score will prevent you from opening a new credit card, getting a car loan, or refinancing your home.” Harzog warns that another consequence is that your insurance rates will go up until the credit problem is resolved.
We hope you won’t have to deal with these extreme cases of credit card fraud, but you should be prepared just in case. Harzog emphasizes that the most important thing is to NEVER let your credit card out of your sight. “College is a great time to be building your credit, as it will help you buy a house, take out a car loan, and even help to get you a great mortgage rate,” she says. “It is not just a matter of getting approved for a card, but improving your overall credit score and history.” Be patient and diligent when it comes to your finances, and remember that it is better to be proactive than to have to do credit card fraud damage control.
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