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Monday, January 6, 2014

Misconceptions that make you vulnerable to credit card fraud

By Gilbert Bermudez

Credit card fraud is a big problem for everyone. Here in the UK, the statistics are shocking. Figures from the Financial Fraud Action UK show that total fraud losses on UK cards in 2012 stood at £388 million. This figure has gone up by 14% from the previous year when fraud losses totalled £341 million.

Card-not present fraud took the lion’s share of the total fraud losses statistics in the UK. Annual fraud losses from these types of fraud totalled £245.8 million in 2012 or 63% of the total. Lost/ stolen cards were the second highest source of fraud losses, totalling £55.2 million.

If you look at the trend from 2002, fraud losses have gone down from £424.6 million back then and from the 2008 peak which stood at £609.9 million. That’s good news. But still, figures are still high. Lost money from card fraud losses is nothing to balk at.

Many may have misconceptions about credit card security that make them vulnerable to fraud and this helps increase the number of credit card fraud committed. Let’s look at some of them.

Avoid credit theft by using secure websites
Employee credit theft includes skimming and recording of data

It’s okay to let someone swipe my card out of my sight

As much as possible, be there when someone, like a cashier or a waiter, swipes your credit card. This helps prevent fraudsters from using your card on a skimming device to make a duplicate card.

Someone claiming to be the police or a representative from my card company is on the phone and they need my PIN number, it must be safe to give it to them!

The police or your card company will never ask for your PIN over the phone. They will also never send anyone to come over to your house to collect your card. Don’t give your card, or your personal details, to them—they’re scammers. Same goes for emails. Many phishing scams involve sending out mass emails to customers asking them to “update” or “verify” their password or pincode.

I’m the only one that knows my PIN.

Some scammers get your PIN information by looking over your shoulder. Some scammers may also get your PIN number by looking at security camera footage of you entering your PIN. When you enter your PIN anywhere, use one hand to enter the digits and cover it with your free hand. It prevents someone else from finding out your PIN code.

I don’t need to sign the credit card

Credit card security
Signing credit card transactions improves security
If you use your credit card mostly for online purchases, you might think that you don’t need to sign your credit card. However, if you lose your credit card somewhere, the finder could sign your card and make a purchase with the card.

Merchants need to check your signature against the one on the card so you’ve lost an opportunity to prevent a fraudulent charge on your plastic.

Credit card security tips

Those are just some of the misconceptions people might have that puts them in danger of credit card fraud. Scammers have plenty of ways to target your credit card and it’s up to you to be wary every time you use one.

Aside from forgetting about these misconceptions about credit card security, you can take other steps to increase your security. If you plan to use your credit card at an ATM machine, look for signs of tampering or if there are any devices attached to the card slot. These might be skimming devices attached.

Be wary of people looking over your shoulder when you use your card, move away from them or ask them to move away from you while you complete a transaction. Make sure your antivirus software is also updated to prevent malicious software from being installed on your computer. These could get details about your card and report them back to criminals.

If you plan to go overseas, only take the cards you plan to use. But don’t forget to bring cash or an alternative payment method with you because these are also important. Save your card company’s number on your phone, inform them, too, that you will be going overseas so that they won’t flag any of your purchases there as suspicious.

Taking these steps will help keep you from becoming a victim of credit card fraud. If you find yourself dealing with any type of this fraud, contact your bank immediately—or the Financial Ombudsman if you couldn’t resolve your issue with the bank directly.

About the author: Gilbert Bermudez writes for Compare Hero, a consumer based comparison website. Loves fishing, swimming and a hobbyist. You can follow his activity on his Google+ and Twitter.