On Guard - Fraud Spotter - 22 Credit Cards

The credit card may well be one of the great inventions for it allows us to make purchases and conduct business without laying currency on a retailer's counter. With the magic words "charge it" and the click of a machine, a credit card allows us to pay in the safest way possible, without cash or a checkbook ever coming into play. But, like any other form of banking, credit cards are not foolproof. Credit and charge card fraud amounts to hundreds of million dollars every year. Through charge card fraud, the con artist has found a whole new way to gain access to your lines of credit.

The easiest way to commit this type of crime is simply by stealing a credit card. Indeed, theft is the most popular form of credit card fraud, according to the BankCard Holder's of America (BHA). By picking your pocket, stealing your wallet or purse, or breaking into your vehicle or home, the thief comes into possession of your credit card and then takes it shopping. Or he may sell the card on the lucrative underground black market, where high-credit line platinum and gold cards are the most popular and demand the highest prices.

Once he has your card he has an open line into your credit account. In order not to be liable for the charges he may run up it's vital that you contact your card issuer as soon as you discover the card is missing. If you wait, you can be held liable for up to $50 of any charges incurred. Play it smart and keep only one or two cards in your wallet or purse. Write down the card numbers and the issuing company's name and phone number. Keep this information in a secure place, preferably at home. Then, in the event of theft, you'll know which cards were taken and be able to contact the company. Also, always be sure to sign the backs of your cards. People who haven't done so have almost given the con artist a free card.

Fortunately, credit card companies are devising new ways to defeat credit card fraud. Some are now placing the customer's picture on the card and others are affixing customer signatures permanently on the card. Unfortunately, though these methods reduce the incidence of fraud, a con man doesn't always have to have your card in his possession in order to run up charges on your account.

Many purchases, especially through mail order companies, can be done without the buyer and the retailer ever meeting face to face. Orders can be phoned in or placed online, and if a credit card is used it is never seen by the retailer. All the con artist needs is your name, address, card number, and expiration date. If he can relate that information he can make the purchase. How can he get that information? Anytime you give out your credit card number you risk a third party hearing it or seeing it. Retail clerks sometimes write down a customer's card information. Others keep the carbons of credit card receipts. Con artists steal mail, especially outgoing bills or statements from credit card companies that list name, address and credit card details.

Some con artists will stand in line next to a customer and simply read the information over the customer's shoulder - the police call it "shoulder surfing." I learned how easy this was when I found myself standing next to a customer, waiting to purchase groceries. The customer laid his credit card down and I could easily read the name, number and expiration date on it. His mistake was laying the card on the countertop while the clerk finished ringing up the purchase. If he had held it in his hand until the clerk was ready he would have reduced the amount of time someone would have had to read the information. If that weren't bad enough, he also laid his wallet down, with his driver's license facing upward. I easily read his name, address, city, state and license number. When the clerk asked for his phone number, he gave it to her. If I had been a con artist, I would have had all the information necessary to plunder his account. Since my mind doesn't run in those directions, I promptly forgot everything, but I remembered the lesson.

A high-tech way for con artists to get hold of your credit card information is by listening to your cordless and cellular telephone calls. Easily available scanner radios intended for police and fire department monitoring can also pick up signals from cordless and cellular phones. When you use phones of this kind you are operating a radio station of sorts. You are "on the air." If you give your credit card number or other personal information out over one of these telephones you are actually broadcasting that information! Wait until you find a regular old-fashioned "landline" phone with the handset connected to the base by a wire, and the base connected by wire to a wall socket. Electronic eavesdropping of cordless and cellular telephones is illegal but it happens just the same, and unwanted third parties can hear your credit card and banking information. Beware!

Never give out your credit card number and never allow retail clerks to record your card number on checks or in other places. Clerks that ask for your address or phone number when they process your card are asking in error. Don't give it to them. The BankCard Holder's of America (BHA) also recommends that you never write your credit card number on postcards or have it listed on catalogs you receive through the mail.

Con artists have been known to use stolen driver's licenses and credit cards to open credit accounts at department stores. You may be on the losing end of someone else's shopping spree unless you immediately notify your credit bureau of the loss of your ID and card. The BHA advises that having the bureau flag your file with a fraud alert is the best way to avoid someone else using your good name and credit history to open an account.

It's fairly easy to gain access to a card already in your possession, but the most vulnerable are new cards sent through the mail. NRI (Never Received Issue) fraud occurs when thieves intercept the card before it reaches you. This happens through theft of mail sacks and credit card statements. A con artist may intercept your statement, call the card company and request an address change. He may also ask for a new or extra card. NRI fraud is said to be the second most prevalent type of credit card fraud.

Stealing cards and using card information is the quickest way to commit credit card fraud, but some industrious con artists simply forge their own. Card forgers obtain lists of legitimate credit card numbers and emboss them on fraudulent cards. Until the bill for purchases arrives, the user never knows about the deception; the card has been in wallet or purse the entire time! Law enforcement officials say that forgers have successfully duplicated even anti- fraud devices such as magnetic stripes and holograms. Even ingenious forgery-fighting methods such as the microdot printing around the VISA card logo have been copied. Keep your credit card from being used illegally by following these tips:

1) Never give your account number to anyone over the telephone unless you initiate the call and intend to make a purchase. Don't fall for anyone who says they need your card number to verify your account or your identity, especially if they claim to be from the card issuer's company.

2) Never carry your Personal Identification (PIN) number in your purse or wallet. Don't make it easy on a crook who picks your pocket.

3) Never discard a credit card statement or purchase receipt without first shredding it or tearing it up. For added protection, never leave either an intact or torn up receipt in a retail store refuse container. Take it with you and dispose of it yourself.

4) Always keep your purse or wallet close at hand; never leave your card unattended in a hotel room or in a clerk's possession.

5) Always check your billing statement for signs of fraud; unknown purchases or charges from unfamiliar companies should signal an immediate call to your credit card company.

6) If your card is lost or stolen report the loss to your credit card company immediately You should also report the fraud to law enforcement by filing a police report with your local department responsible for any unauthorized withdrawals. You may also want to contact your state's attorney general's office or call the National Fraud Information Center (1-800-876-7060) for information on more resources. The Electronic Fund Transfer Act states that if a customer reports a missing card before the card is used illegally, the customer cannot be held responsible for any unauthorized withdrawals.

TIP: When taking on new debt, try to keep your loans as installment loans (a fixed number of monthly payments) as apposed to revolving loans (having to many revolving loans can lower your credit score).

Reprinted from Zongoo! Finances