Credit card scams ... Are you safe?

Wednesday, December 3, 2008

Scam: To trick or cheat someone out of their possession(s). A ripoff.

The internet is littered with scams such as pop-up ads or e-mail spam ads with "Get Rich Quick/High-Paying Jobs/You Are A Winner" messages. The use of credit cards has become so routine, one does not often think of the dangers.

When entering (Credit Card Scam) on the Google search engine, there are 39,800,000 sites with information regarding fraud. Predators and thieves have preyed on unsuspecting soles, to the tune of an estimated $52 billion this past year.

One such scam, called "triangulation," happened when an unsuspecting customer purchased an item via an on-line auction. The seller required a money order payment. As it turned out, items the original seller purchased on-line from were paid for with stolen credit cards. The thief was able to turn the stolen credit card numbers into cash, by purchasing items using the stolen numbers, then selling them on-line to an unsuspecting buyer for payment of cash.

Another unavoidable scam, is called "card tumbling" with the thief electronically using math variables to generate a sequence of numbers. Much like a locksmith, each number is tumbled until a correct sequence finally falls into place. They test it and the culprit has your card number to go shopping.

The list of scams and the length which predators go to steal your money and or your identity is endless.

In May 2008, U.S. News and World Report reported recent scams which work like this: A fraudster, claiming to be from the security department of a credit card company, tells the consumer he is checking unusual account activity. He may even offer a badge number. Then, he tells the consumer that a fake purchase, such as an $800 television from Best Buy, has been made on the card.

When the consumer says he did not make that purchase, the scammer explains that he is starting a fraud investigation and gives the consumer a "confirmation" number. He says he needs to verify that the consumer has the credit card and asks for the three numbers on the back of the card, known as the card identification number. He may already have the consumer's address and card number and that verification code lets the fraudster ring up charges on the card.

There are news media and Internet reports published almost daily of new inventive ways and the lengths which criminals will go to steal credit card information.

Listed below are some important steps and helpful reminders, which could help be secure with card cards.

Internet ScamBusters' 21 Credit Card Fraud Prevention Tips:

1. Keep an eye on the credit card every time you use it, and make sure to get it back as quickly as possible. Try not to let the credit card out of sight whenever possible.

2. Be very careful who credit card is given to. Do not give out account numbers over the phone unless you initiate the call and you know the company is reputable. Never give your credit card information out when you receive a phone call. (For example, if you're told there has been a "computer problem" and the caller needs you to verify information.) Legitimate companies don't call you to ask for a credit card number over the phone.

3. Never respond to e-mails that request you provide your credit card information via e-mail and don't ever respond to e-mails that ask you to go to a "web site" to verify personal (and credit card) information. These are called "phishing" scams.

4. Never provide credit card information on a Web site that is not a secure site.

5. Sign the credit cards as soon as you receive them.

6. Shred all credit card applications you receive.

7. Don't write the PIN number on the credit card or have it anywhere near your credit card (in the event that your wallet gets stolen).

8. Never leave the credit cards or receipts lying around.

9. Shield the credit card number so that others around you can't copy it or capture it on a cell phone or other camera.

10. Keep a list in a secure place with all of the account numbers and expiration dates, as well as the phone number and address of each bank that has issued you a credit card. Keep this list updated each time you get a new credit card.

11. Only carry around credit cards that you absolutely need. Don't carry around extra credit cards that you rarely use.

12. Open credit card bills promptly and make sure there are no bogus charges. Treat the credit card bill like you would a checking account, reconcile it monthly. Save the receipts so you can compare them with your monthly bills.

13. If you find any charges that you don't have a receipt for or that you don't recognize, report these charges promptly (and in writing) to the credit card issuer.

14. Always void and destroy incorrect receipts.

15. Shred anything with the credit card number written on it.

16. Never sign a blank credit card receipt. Carefully draw a line through blank portions of the receipt where additional charges could be fraudulently added.

17. Carbon paper is rarely used these days, but if there is a carbon that is used in a credit card transaction, destroy it immediately.

18. Never write the credit card account number in a public place (such as on a postcard or so that it shows through the envelope payment window).

19. Ideally, it is a good idea to carry the credit cards separately from your wallet -- perhaps in a zippered compartment or a small pouch.

20. Never lend a credit card to anyone else.

21. If you move, notify the credit card issuers in advance of your change of address.

If you suspect credit card fraud

If your credit cards are lost or stolen, contact the issuer(s) immediately.

Most credit card companies have toll-free numbers and 24-hour service to deal with these emergencies -- they are eager to avoid credit card fraud.

According to U.S. law, once you have reported the loss or theft of your credit card, you have no more responsibility for unauthorized charges. Further, your maximum liability under federal US law is $50 per credit card and many credit card issuers will even waive that fee for good customers.

If you follow all these tips, it will go a long way in protecting you from credit card fraud.

With the holidays fast approaching, it is a good idea to check your current bill and report any unauthorized billing to the card company immediately.

Perhaps the number one cardinal rule is: Never give the card number or security information over the phone to an unsolicited caller.

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