How to Avoid Credit Card Fraud
By Jill Terry
Though there's no foolproof way to stop this or any other
kind of crime, there are steps you can take to prevent yourself
from becoming a target for credit card fraud.
Technology has expanded the possibilities of credit card fraud,
making the old rules about ripping up receipt carbons seem
not only quaint, but downright outdated.
Here are 15 rules you should follow to reduce your risk of
credit card fraud:
When You Use a Physical Card:
- Never sign a blank charge slip.
It's the equivalent of signing a blank check. You may think
that by entering the tip amount in a restaurant, the cashier
will add up the tip and cost of the meal. It should happen
but sometimes doesn't. Play it safe--make the total amount
clear, and don't trust anyone else to do it for you.
- Don't sign your cards.
Next time you receive a new credit card, after signing
the back of it, write "see photo ID" also on the signature
line. Credit card companies ask you to sign it so that merchants
can compare the signature on the card to the signature on
the receipt. "See photo ID" is an additional way for a merchant to confirm
that you are who your card says you are.
- Never write your ATM PIN number on the back of your
If the card is stolen, the thief now has instant access
to use your card at the nearest ATM.
- Keep as few cards in your possession as possible.
Do you need to carry more than one or two credit cards?
Probably not. Carry as few cards as possible to reduce your
overall risk in the event that your purse or wallet is stolen.
Moreover, in the event that you become the victim of identity
fraud, you have less to fix if you have limited credit.
- Don't carry your life history with you.
Unless you're headed to City Hall for a marriage license,
you don't need to keep your social security card, birth
certificate, passport, or other official documents with
you. If they're stolen, you've just made it much easier
for the thief to commit identity fraud.
When You Charge by Mail, Phone, or on the Internet:
- Never use a Web site that doesn't use SSL (secure socket
layer) technology to conduct credit card transactions.
SSL assures you that confidential information like names
and credit card numbers are transmitted in an encrypted
manner so they can't be read as they travel across communication
lines. Look for names like VeriSign or Thawte--common security
providers--indicating that encryption technology is in use.
If you are unsure as to a site's security, look to your
browser. Most browsers alert users when a page is a "secure"
page. Major retailers use such technology, but be careful
when you do business with smaller vendors who may not be
able to afford the technology.
- Don't disclose your credit card number to anyone who
There are exceptions, of course, but for the most part,
Macy's shouldn't be calling to confirm that their records
of your account number are correct. Nor is a trip to the
Bahamas yours just for giving a stranger on the phone your
name, address, and credit card number.
- Don't write your credit card number on the outside
of an envelope.
It's a mystery why certain banks and credit card companies
ask you to record this information on the outside of a payment
envelope that traverses the U.S. mail system. Would you
parade your social security number before a bunch of strangers?
Of course not, yet that's the equivalent of what credit
card companies are expecting you to do when they provide
a line on an envelope that begins with "account number."
- Deposit your mail in an official mailbox.
Many people leave their bill payments in their personal
mailboxes, relying on their mail carriers to pick them up
and forward them to their destinations. Scores of credit
card fraud cases start just this way. Mail thieves raid
entire neighborhoods, combing mailboxes for payment envelopes.
They steal the envelopes, thereby obtaining access not only
to your credit account numbers, but also your checking account
number and your signature.
- Place your catalog orders on a landline phone.
Cellular and cordless phones don't provide the privacy you
need--it's too easy to tap into conversations that use air
signals. Don't disclose anything over a cordless phone you
wouldn't want the world to know.
- Shred pre-approved credit card offers and credit card
Anything that has your name and a credit card number (or
the promise of one) on it can become the basis for credit
card fraud. Do yourself a favor and destroy the evidence.
- Check the accuracy of your credit card statements as
soon as you get them.
Immediately report anything that doesn't look right. Question
every charge that you either don't recall making or don't
have a receipt to support.
- Keep a list of all your credit card numbers and their
In case your cards are lost or stolen, you'll be able to
report it faster and more efficiently if you have this information
readily available to give to police and credit card companies.
- Call your creditors immediately if a billing statement
Late statements often indicate that someone has taken "ownership"
of your account and diverted your statements to a new address.
- Check your credit report annually.
If the report lists accounts you don't recognize or more
credit than you thought you had, you may be a victim of
credit card or identity fraud. Stay on top of your credit
situation by reviewing your credit report at least once
a year, preferably before you apply for credit.
If your credit or charge cards get lost or stolen, immediately
call the issuer(s). Many companies have toll free numbers
and round-the-clock service to respond to such emergencies.
By law, once you report the loss or theft, you have no further
responsibility for unauthorized charges. In any event, your
maximum liability under federal law is $50 per card.