6 Ways to Protect Yourself from Credit Card Fraud

By Eva Norlyk Herriott

Credit card fraud can strike anywhere, anytime, and often from sources where we least expect it. Most of the time, people don’t even know that their credit card information is stolen until fraudulent charges appear on their statement. A dishonest clerk may use a card skimming device to siphon off your credit card information, or thieves may pick up discarded credit card statements or receipts from your trash.

You can play a great role in protecting yourself from fraud. Here are 6 ways to make sure you don’t fall victim to identity theft or credit card fraud.

1. Guard your credit card information. You guard the physical credit cards in your wallet, but what about your credit card information? Destroy credit card statements, credit card receipts, and anything that contains your credit card number before putting them in the trash. Don’t ever let your credit card out of sight when eating out at restaurants, or anywhere else. Memorize your PIN number, and never keep it together with your credit cards.

2. Watch out for fraud from unexpected sources. According to a report from the Better Business Bureau, 50 percent of identity theft instances aren’t perpetrated by fraudsters, but by relatives, friends and neighbors. This type of fraud costs more time and money; costs to victims when the perpetrator is known can run as high $15,607, according to Javelin Research.

To protect yourself, take simple precautions. Don’t leave your credit cards or receipts lying around in your house where a random visitor, babysitter, or house cleaner could find them. If you go on vacation, have someone you trust pick up your mail, so it doesn’t lie for weeks in your mailbox. If you move, notify card companies well in advance of your new address.

3. Protect Yourself Online. Make sure that you have anti-virus and anti-spyware software installed on your computer and that it is updated regularly. Set your operating systems and browsers for automatic updates; computer companies are constantly creating updated security patches for new security breeches. Never give out personal financial information over the Internet, unless it’s a website you initiated the interaction with and it’s a verified and trusted location.

4. Be on the watch-out for phone fraud. Don’t give out financial information on the phone to companies unless you’re the one who called the company. If you receive a call from a company that requires action, get a phone number, and then call the company back to verify that it’s for real. If you have questions about a company, call your local consumer protection office or the Better Business Bureau.

5. Early Detection Is Your Best Defense – Monitor your credit card accounts frequently. The more time that goes by before fraud is detected, the higher typically the cost. Look at your card statements as soon as you receive them, and preferably monitor your credit card activity online. Most online credit card sites allow you to set up alerts that will be sent by email or to your cell phone, should the account activity exceed a certain pre-specified level.

Credit card fraudsters often test the accuracy of account information they have obtained by making small, insignificant charges which are easily ignored by card holders. Pay attention to even minor charges you don’t recognize, as these often precede large fraudulent charges.

6. Review Your Credit Report Regularly – Review your credit report at least once a year to guard yourself against identity thieves opening accounts in your name. You are entitled to a free credit report once a year at AnnualCreditReport.com. If you want greater peace of mind, consider enrolling in a paid credit service that will monitor your credit report and automatically keep you updated on any changes.

Published: May 22, 2009