Card Credit Fraud FAQ
Credit card fraud is a common crime that happens when you least expect it. According to Javelin Strategy and Research, 75 percent of cases of credit card fraud in 2009 involved crimes utilizing an existing credit card account; 39 percent of thieves used stolen information to create new credit accounts. Credit card and identity fraud are crimes that happen to even the most careful people, and a bit of simple prevention can keep thieves from compromising valuable credit card information.
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What Is Credit Card Fraud?
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When a mysterious charge, or 20, show up on a credit card bill, or there's a new account on your credit report that looks unfamiliar, chances are you're a victim of credit fraud. It's a quiet crime that can take place immediately, or months down the road. What happens is simple: the thief obtains credit or identity information through one of several methods, then uses that information to obtain new credit or utilize an existing account. You may still have your cards in your possession when credit card theft strikes; a thief doesn't need the actual card.
How Significant Is Credit Card Fraud?
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Credit card fraud is traumatizing and can wreck a credit file in a very short time. New credit accounts and numerous hard inquiries decrease a credit score, and a thief won't care much about preserving an optimum credit usage ratio of 7 to 30 percent per credit account. The thief will charge up to the limit, then move on. If you don't know about these opened accounts, your FICO score will drop from late payments. Once the theft is in the open, it can take months to clean up the damage. In some cases, you're liable for the fraudulent charges and must pay the bills. If you don't pay, your credit is deeply compromised, with the unpaid bills on record for seven years.
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How Does Credit Card Fraud Happen?
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Credit card fraud is committed in many ways. You might loan a card to a friend who then uses the card for unauthorized purchases. Another common occurrence is theft by an unscrupulous cashier who might copy your card info or take a carbon imprint. While theft through the Internet does happen, it only accounts for about 11 percent of all identity and credit thefts. Through this method, a thief steals data through a keylogger or other malware program that mails the information back to the thief for sale, use or distribution.
Who Is a Credit Card Victim?
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Credit card fraud can happen to anyone. Even an educated, aware individual can fall prey to a particularly well-designed phishing email ostensibly from a familiar source. Theft can occur at work or at the neighborhood supermarket. A corporate data breach can mean the theft of millions of numbers months after you shopped in a store. Credit card theft is common enough that it makes sense to be constantly on the lookout for sensitive situations.
How Can I Prevent Credit Card Fraud?
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Guard yourself from credit card theft with a few simple precautions. Shred all receipts and statements as soon as you're finished with them; don't simply throw whole statements in the trash. If anyone calls requesting your credit card information over the phone, don't give it out; also be wary of giving out password or Social Security information over the phone. Leave unused credit cards at home in a secure place and keep your active credit card in full view at all times while shopping. When shopping on the Internet, ensure that the address bar reads HTTPS before entering any credit card information. Keep all anti-virus and firewall protection on while Web surfing, and stay alert to any phishing emails that direct you to click and supply personal information of any sort.
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