While you’re working hard to find great deals and optimize your holiday shopping, criminals are working hard to steal and use your credit card information.
If you haven’t experienced an unauthorized charge on a credit card yet, you probably know someone who's been a victim of fraudulent credit card activity.
Thieves don’t wait for the holidays to steal. But with extra charges on credit cards this time of year – they likely get away with it more.
Warning Signs of Credit Card Fraud
You may not even realize someone is trying to use your credit card number.
Banks and credit card companies take many precautions to flag fraudulent charges. Transactions may be declined, or cardholders may be required to confirm a purchase.
This usually happens if an item doesn’t match your normal spending patterns. Or if the sale originates from foreign or high-fraud geographic locations not near your residence.
During this hectic time of year, be extra careful about possible phishing attempts too. Criminals may call, email, or send texts in an effort to get you to share personal information.
Before you tell them anything, obtain the official phone number of the company who is asking for information and call them to verify the request.
“Chip” credit cards may not be as vulnerable to skimming, which is another threat to stealing your credit card information.
Skimmer devices have been found on gas pumps and ATM’s across the country, so always make sure to look at the card reader for any evidence of tampering.
If you have any doubts about putting your credit card in the reader, go inside to pay with your card or use cash to avoid problems.
Take Action to Prevent Fraudulent Credit Card Activity
It’s essential you take an active role and not just rely on financial institutions to contact you when they detect problems.
Check your credit card accounts frequently and review every charge. Criminals often try a series of small purchases before going on a shopping spree.
The better you keep track of your spending, the sooner you’ll notice anything suspicious.
You can also set up notifications to alert you whenever a credit card purchase is made.
It might be inconvenient to get messages about or approve all of your legitimate purchases.
But ask anyone who's dealt with fraud, and they'll tell you – preventing the charges in the first place is easier than finding them weeks later and having your account closed.
When You Find an Unauthorized Charge
Even if you’ve done everything you can to avoid being a target of credit card thieves, there's still a chance someone will try to use your credit card number fraudulently.
Once you noticed any unauthorized charges, follow this list of things to do.
1. Immediately contact the credit card issuer.
Your first move is to report the fraudulent credit card activity. Your credit card company will then review the recent charges and start an investigation.
It's likely your account will be closed, and you’ll have to wait for them to send you a replacement card.
Most credit cards offer zero-liability fraud protection for card users. Make sure you understand the terms and conditions for your card and your responsibility to report and pay for unauthorized charges.
2. Check all linked accounts and change passwords and pins.
You should access all of the websites or online bill pay sites where your credit card information is stored and check for unauthorized charges on those accounts too.
Since your credit card account is closed, remove the linked information. For an extra layer of security, also make sure to change passwords and PINs.
3. Report the fraud to the credit bureaus, check your credit report, and consider freezing your credit file.
To prevent further identity theft, contact Experian, Transunion, and Equifax to report the fraud on your account.
You should also consider ordering your credit reports from each bureau to review the activity. It’s free to access the reports once each year.
It’s also free to freeze your credit file so it will be much more difficult for criminals who have your personal information to open up new accounts in your name.
4. Contact the Federal Trade Commission and consider filing a police report.
Contacting the Federal Trade Commission (FTC) allows them to track identity theft crimes on the situation. You can file online, or by calling the FTC’s Consumer Response Center at 1-877-FTC-HELP (1-877-382-4357).
You can also report the fraud to your local police, so you have documentation of what you’ve done to address the unauthorized activity.
5. Continue monitoring your accounts.
You’ve dealt with the fraudulent activity on your account, and you’ve taken steps to try to prevent it from happening again. But that doesn’t mean it won’t.
You may never be an identity theft victim again, but you might find an unauthorized charge occurring next month or next year.
Remember your best defense is to always be on offense. Set up notifications, check your accounts often, and consider using a free credit monitoring service.
Dealing with Growing Fraudulent Credit Card Activity
Now you can see why taking action to prevent credit card fraud isn’t a waste of your time.
With all of the data breaches, phishing scams, skimming activity, account takeovers, and with incidents of lost wallets or robbery and theft – there is a strong possibility your personal data has been exposed to criminals.
A 2017 Nilson Report shows credit card fraud losses topped $24 billion – up $2 billion from 2016.
Keeping track of your credit card use might seem like a lot of extra work, but hopefully, all of your efforts to protect yourself will pay off to keep your credit and identity safe in the end.
Vicki and Amy are authors of Estate Planning 101 – a Crash Course in Planning for the Unexpected -coming soon from Adams Media.