How Your Credit Card Numbers Are Stolen

Credit card fraud can happen to anyone, even people who don’t have credit cards (they can have fraudulent accounts opened in their name). Here’s what cardholders need to know about some of the most common methods of stealing credit card information, plus some quick tips to keep your card information secure. With award-winning identity theft protection and a $1 million insurance policy, rest easy knowing that you’re better shielded from credit card fraud. Even if your card is still in your wallet, if you see fraudulent transactions on your statements, report them immediately.

Phishing attacks aren’t limited to email or text messaging — these attacks can also happen over the phone. You’re first contacted by a scammer posing as a trusted company or representative to confirm your credit card information. Familiar fraud takes a few different forms — from a trusted family member using your card without permission to an acquaintance stealing your credit card number. Cybercriminals install card skimmers on card readers, ATMs, and even gas pumps. These small devices fit over a merchant’s card terminal and can be difficult to spot. With a balance transfer card, if you don’t pay off your balance before the introductory period, you’ll only be charged interest on the remaining balance. Figures from the Australian Payments Network, a self-regulatory body for payment systems, show payment card transaction fraud in 2022 totalled $577 million, up 16.5 per cent on the previous year.

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“When we try to make it easy for consumers to enter cards and have products purchased and delivered, it also makes it easy for hackers to do the same thing.” As for cardholders, Mr Hunt said to keep an eye out for any suspicious, small transactions and report any fraudulant activity as soon as possible. He said businesses needed to protect themselves using payment processors with robust fraud detection on their online stores, like Stripe and Square. Some states have placed lower caps on debit card liability due to complaints from consumers. It’s much more difficult for a thief to install a card skimmer on a point-of-sale (POS) system at a retail store, but it can happen.

In short, credit card fraud is not just something that “happens to someone else.” With so many angles, it’s all but impossible to shield yourself completely from credit card fraud, but vigilance can reduce your exposure and limit the potential damage.

This crime appeals to criminals because of its simplicity — they only need to find an opportunity to steal a misplaced or unsupervised credit card, after which it can be immediately used. Scammers steal credit card numbers in a variety of ways, such as through phishing attacks, hijacking payment forms, intercepting public Wi-Fi, and more. Opinions expressed here are the author’s alone, not those of any bank, credit card issuer, airline or hotel chain, and have not been reviewed, approved or otherwise endorsed by any of these entities. You may have heard of 0% APR balance transfer credit cards, but they’re not the same as retail credit cards with deferred interest. Stores typically offer deferred interest periods ranging from six months to two years. As long as you make regular payments during that period, the store won’t charge you interest.

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Often, unauthorized charges result from credit card theft—either from a stolen credit card or a compromised card number. Sometimes, unauthorized charges result from clerical error or a computer glitch. Either way, it’s your responsibility to find and report these charges as quickly as possible to minimize your liability for charges you didn’t make. In other words, if you keep your physical card in your possession or you’re able to report that your card was stolen before it was used, you won’t be liable for any charges. Even if the physical card is stolen and charges are made before you report the theft to your card issuer, you’ll only be liable for up to $50.

What Fraud Protection Features Do Credit Cards Provide?

It could be an unauthorized charge and a sign that your credit card number, your account, and your identity have been compromised. If you have reason to believe you’ve been a victim of identity theft or credit card fraud, take action immediately. It’s not an uncommon news headline to see that a large organization is dealing with a data breach in which thousands or even millions of people’s personal information has been exposed. Credit card fraud can be one of the many consequences of having your personal information stolen. And if something does happen, the service comes with the lost wallet assistance, identity theft insurance and fraud resolution services. If you are a victim of credit card fraud, the federal Fair Credit Billing Act (FCBA) limits your liability to no more than $50 for unauthorized charges. However, American Express, Discover, Mastercard and Visa go one step further and bring that liability down to $0 on consumer credit cards.

Protect Your Rights

However, a stolen credit or debit card could be used for a number of smaller transactions prior to the fraudulent activity being flagged. Some credit card issuers require you to first try to resolve the unauthorized charge with the merchant. You can typically identify the merchant by reviewing your credit card statement. However, thieves sometimes spoof merchant information, making it appear as though charges were made with a particular merchant when they really weren’t (this has been an ongoing issue with some unauthorized iTunes charges). In this case, you’ll have to resolve through your credit card issuer rather than with the merchant. Once you report an unauthorized transaction, the credit card company may work with you to confirm it’s a case of credit card fraud rather than a simple mistake. For example, a merchant overcharging for a purchase you made or failing to deliver a product is not necessarily credit card fraud.

Credit card fraud can occur when unauthorized users gain access to an individual’s credit card information in order to make purchases, other transactions, or open new accounts. A few examples of credit card fraud include account takeover fraud, new account fraud, cloned cards, and cards-not-present schemes. This unauthorized access occurs through phishing, skimming, and information sharing by a user, oftentimes unknowingly. However, this type of fraud can be detected through means of artificial intelligence and machine learning as well as prevented by issuers, institutions, and individual cardholders. This amounts to 127 million people in the US that have been victims of credit card theft at least once.

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