Credit card fraud is a serious problem. Credit card fraud causes estimated amounts exceeding billions of Dollars each year in losses around the world. The consumer pays for the fraud by way of higher finance charges and annual fees.

To protect yourself against credit card fraud, consider the following:

Protect Your Bills and Credit Cards

Unscrupulous scam artists raid mailboxes to gather renewal credit cards and bills to obtain credit card numbers. Be aware of when your cards and bills are due to arrive. If they are late, contact your credit card company.

Endorse all credit cards when they arrive.

Keep a record of your credit card numbers in a secure place.

Include in that record the expiration date, phone number and address of the card issuer.

Check your cards to ensure none are missing.

Always get your credit card back promptly from salesclerks and never let it out of your sight.

Guard Your Credit Card Number

Do not give your credit card number over the phone unless you are dealing with a company you have done business with before.

Memorize your PIN number and do not keep it with your credit card.

Safety Tips When Using Your Credit Card

Destroy carbons and voided receipts immediately.

Check your bill against receipts that have been kept in a secure place.

If you are not using a credit card, destroy it immediately.

Report stolen and lost cards immediately.

When on a trip, carry the name of the issuer, account number and the toll free number of the issuer in a secure place. Note the date, time and person to whom you reported that your card was lost or stolen.

Reporting Losses and Fraud

If you lose your credit or charge cards or if you realize they’ve been lost or stolen, immediately call the issuer(s).

Many companies have toll-free numbers and 24-hour service to deal with such emergencies. By law, once you report the loss or theft, you have no further responsibility for unauthorized charges.

If you suspect fraud, you may be asked to sign a statement under oath that you did not make the purchase(s) in question.

Security Features

Always check the security features:

Embossing

Magnetic stripe

Signature panel

Hologram

Check the card’s embossing:

The first four digits of the Visa account number (the bank identification number [BIN] must be pre-printed above the embossed number. If these numbers do not match exactly, the card has been altered or is counterfeit.

Visa’s embossed account numbers begin with a 4 and contain either 13 or 16 digits.

A unique embossed “V” appears in “CV,” “BV,” or “PV” on Visa Classic, Business, or Gold cards.

The embossed characters should be in alignment and of the same size, height and style.

If you see “ghost images” of other numbers behind the embossing on either the front or back of the card, it has been re-embossed.

If the card has been re-embossed, the hologram may be damaged.

Check the valid dates for evidence of tampering. Do not accept an expired card.

MasterCard’s embossed account numbers begin with a 5 and conntain 16 digits.

If the unique security character “MC” appears next to the expiration date of a MasterCard card, makes sure the card account number is indent-printed in reverse italics on the signature panel (this feature will not appear on all cards until 1997).

Check the signature panel:

A repetitive, colour design of either the “Visa” or “MasterCard” name should appear on all signature panels.

An altered signature panel may be discoloured, glued, painted, erased, or covered with white tape.

Compare the signature on the card with the signature on the sales draft. If they are different request photo identification, such as a driver’s license. If you are still not satisfied that the customer is the legitimate cardholder, call for a Code 10.

The signature panel on MasterCard cards may include an indent-printed account number followed by a three-digit validation code.

Check for hologram tampering:

The gold or silver holograms should show clear, three-dimensional images that appear to move when the card is tilted. Scratching can often easily damage imitations.

Types of Credit Card Fraud

The under mentioned is the most common types of credit card fraud:

Account Take-over

Your personal information is as good as gold to a fraudster. If they get access to or get hold of your personal information, they do not even need your credit card. They phone your Credit Card Company or financial institution and change your address information. They will then report your current card lost and request that a new card be issued. The card will then be sent to the new address or they will receive information on where to collect the new credit card. They then make use of false identification to collect the card. Your statements will be sent to the new address and you will be unaware of the fraud that is occurring on your credit card.

Your credit card account has now been taken over by the criminal. It is therefore important to contact your Credit Card Company or financial institution if you do not receive your statements on time.

Another method used by criminals to get hold of your credit card and take over your account, is through postal theft. Crime syndicates have agents within the postal service who will assist them in getting hold of credit cards before they are delivered.  When you receive notification to collect your credit card, do so as soon as possible. The longer you take to collect it the better chance criminals have to steal it. If your card expired or will expire soon and you haven’t received notification to collect a new card, contact your Credit Card Company or financial institution immediately.

Counterfeit Credit Cards

Crime syndicates use the latest technology, including computers, embossing and lamination to create more realistic looking credit cards. Today’s counterfeit credit card will often have a complete hologram and a fully encoded magnetic strip. Most of the tools used to create counterfeit cards are manufactured in the Far East and smuggled to developed and developing countries throughout the world. To the untrained eye these cards will appear to be completely legitimate.

How do you then identify a counterfeit credit card?

The hologram holds the key to identifying counterfeit credit cards. In most instances the hologram on a counterfeit card is fixed on top of the card, whereas the legitimate hologram is embedded in the plastic during the manufacturing process. On closer inspection you will be able to see or feel that the hologram on a counterfeit card rises slightly above the card. The only way to combat this type of fraud is to be aware of the security features built into credit cards, in order to identify the slight differences between genuine and counterfeit cards.

Credit Card Skimming

Credit Card Skimming is a method by which encoded information from the magnetic stripe of a credit card is gathered by an electronic credit card reader (skimmer). This information is used illegally when processing a transaction. In the hands of a criminal the electronic credit card reader becomes a handy tool to gather information to use later in illegal transactions and purchases.

Usually a criminal connects this “skimmer” to the credit card machine or a portable “skimmer” could be used to swipe your card when you are not looking. If you make a purchase, your information will automatically be stored in the “skimmer”. At a later stage the criminal will use this information to make unauthorised purchases or encode this information on the magnetic strip of a counterfeit card.

Credit card skimming often occurs in businesses where credit cards are used regularly, such as restaurants and other entertainment venues. Protect yourself, always keep an eye on your credit card and be on the lookout for “skimming” devices