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Thursday, November 17, 2011

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You are here: Home / identity theft techniques / Credit Card Fraud is on the Rise
Credit Card Fraud is on the Rise

December 30, 2009 by  
Filed under identity theft techniques

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Credit card fraud has increased significantly in recent years, according to law enforcement officials and consumer protection organizations like the Public Interest Research Group and Privacy Rights Clearinghouse. More consumers own credit cards now than in the past, and criminals are constantly looking for new ways to tap into accounts. All of this means cardholders need to protect their credit cards now more than ever before.

Perhaps the most obvious form of credit card fraud takes place in the form of theft. Even if you don’t lose your card or have it stolen, however, your credit card account could still be in danger. It is not uncommon for criminals to steal your credit card identity – details such as the number on the card and the expiration date. A stolen account number is the first step in a series of credit card fraud incidents. Unfortunately, cardholders may not be aware of the theft until the unauthorized activity starts showing up on the bills.

Identity Theft

Identity theft occurs when your personal information is gathered without your authorization and used for criminal purposes. It occurs when someone steals information that identifies who you are, such as your name, address, date of birth, or social security number. Sometimes you need to submit this information when applying for credit, opening a new bank account or making a purchase. When someone taps into these accounts or transactions without authorized permission, your information could be in danger. According to a Federal Trade Commission survey issued in October 2007, an estimated 13.5 percent of U.S. adults (30.2 million consumers) were victims of one or more identity fraud incidents in 2005.

Credit card thieves can come in two forms. The first of these are complete strangers, and the other kind falls into the category of people you know. This second group can include anyone from friends and family members to neighbors, co-workers, or anyone that you have an established relationship with. More than half of the identity theft cases that occur are committed by criminals that have established relationships with their victims.

This doesn’t mean that you should be wary of all of your friends and in-laws. You should, however, be aware of certain warning signs. Here are a few of the common ways that identity theft happens:

- Someone may steal your wallet or purse. When they get a hold of it, they have instant access to your credit cards and bank information.

- Your personal information can be taken from information you submit on the Internet.

- Fraudsters may locate your discarded receipts by looking through your trash can. If your name or account number appears on the receipt, they can use it to their advantage.

- A clerk at a store might make an extra copy of your credit card, or take the numbers from it.

- Your utility bills, credit card and bank statements, tax information, and new checks can be stage-managed to land up at the wrong place.

- You may get a phone call or email offering a free trip or a cheap travel package. To receive it, however, you have to submit your account number. Once you do, the source can start using your card number to make unauthorized purchases.

After collecting your personal information, fraudsters may get the mailing address on your credit card account changed by calling your creditors and opening new lines of credit. In some cases, they might do more than just rack up purchases on your card. They might open bank accounts in your name, apply for loans in your name, or set up new phone accounts. The list of possibilities is nearly endless.

New Credit Card Crimes

One of the newest methods that identity thieves are using is referred to as skimming. In this technique, a small hand-held electronic device called a skimmer is used to gather the information embedded in the magnetic strip of the card. With a simple swipe of your card in the hand-held skimmer, all your personal identification information is collected in just a second. It is then used to create a counterfeit card or make purchases online.

Crime perpetrators are continually trying out different technologies to carry out identity theft. Fortunately, many organizations are fighting the battle against credit card crime by developing new encryption techniques. Business are doing all they can to help individual consumer keep their private information a closely guarded secret.

Despite various improvements and efforts, almost anyone can be a victim of identity theft. And it can be nerve-wracking to find unauthorized charges on your personal credit card bills. Most credit card companies will cover the amounts charged to your card in fraudulent cases. Still, it is in your best interest to do all you can to protect your credit card, as well as your personal identification information. Prevention is always better than the cure!

Stephanie Andrews is a contributing editor of the website www.CreditCardCity.com , a credit card directory where you can apply for a new credit card with secure online applications. Visit now to compare all of the best online credit card offers.

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