10 Tips On Avoiding Credit Card Fraud

Plastic has become the new cash, with the combined value of transactions made on charge, credit, debit and store cards reaching a whopping £470 billion in 2005 – a figure that is set to rise to an estimated £639 billion by 2010 (Credit Action, 2006).

As increasing numbers of people use their cards to pay their bills, buy clothes or do their shopping online, over the phone or using chip and pin, incidences of credit card fraud have also risen. According to Apacs, the payment industry body, plastic card fraud losses accounted for more than £4 million in 2005. On top of this, the sense of violation felt by victims of fraud, as well as the inconvenience and frustration of waiting for cards to be replaced and funds to be reversed is immense.

But you don’t have to miss out on the convenience of cards to avoid fraud. There are a number of steps that you can take to protect yourself, and you can start by reading our 10 step guide to avoiding credit card fraud.

1. Keep your personal details secret

The key when it comes to avoiding credit card fraud is to ensure that your personal details are as well kept as possible. This means that you should never tell anyone else your PINs or your passwords. Similarly, you shouldn’t write any private financial information down. If you have trouble remembering PINs, change them to something more memorable but try to avoid using easily identifiable, obvious numbers like birthdays.

2. Cover your tracks

You should always destroy, and shred whenever possible, any documents and receipts that contain personal financial information when getting rid of them. Don’t just throw them out with the rest of your rubbish or in bins in the street.

3. Get extra protection

If you use MasterCard or Visa you can register for their online protection schemes, MasterCard SecureCode and Verified by Visa. It doesn’t cost you anything, and once you have registered, your individual password will have to be entered as well as the normal card details in order to complete any online transactions.

Check with your bank to see if they offer any similar schemes with their debit cards, or visit the Mastercard (see useful links) website for more details on SecureCode or the Visa website to register for Verified by Visa (see useful links).

4. Protect your PC

Having up-to-date and reliable anti virus and firewall software is essential when protecting yourself from online fraud. Using a phishing filter can also help to protect your transactions by checking each website against phishers who attempt to fraudulently acquire information such as passwords and credit card details. Anti virus software also protects you from Trojan viruses that attempt to capture sensitive information as it’s entered into a website. But remember to regularly update your virus definitions so that you’re always protected against emerging threats.

Some internet providers offer free anti virus and firewall software as part of their packages. Go to BroadbandChoices (see useful links) and do a search to see if your provider offers this, otherwise, good anti viruses such as Norton or McAfee can be bought online and easily installed for around £40.

Visit Broadband Choices to find out more about Online Security

5. Beware of cold callers

Your bank would never call you out of the blue asking for passwords and other personal information, so remember the basic rule here: if you didn’t instigate the call you should never divulge financial information, PIN numbers or passwords over the phone.

6. Stay secure online

You should never follow a link from an email and enter any financial details or passwords. Always log in for your internet banking or online shopping sites by typing the address into your browser.

Phishing emails, as they’re known, claim to be from your bank, or something like Ebay or Paypal, and ask you to verify you account details. But these organizations would never ask you to do this via email and advise customers to delete any such emails.

You should also be careful about the sites that you use and try to only use secure sites. Look out for the locked padlock or unbroken key symbols in your browser window.

7. Be cautious in shops too

It’s not just online or on the phone that you can be vulnerable to fraud. If you’re using chip and pin you should always use your spare hand to shield the keypad from prying eyes or hidden cameras.

And always be careful and vigilant at cash points too – shield the keypad from people queuing along side or behind you and never use a cash point if it looks like it has been tampered with.

8. Be vigilant

You need to take the time to go over your credit and debit card statements to make sure that you haven’t been the victim of fraud. It’s not just huge amounts of money that goes missing from people’s accounts; often small amounts are filtered off as people are less likely to notice. You should also file and keep your statements until you’re sure that you no longer need them, at which point you need to destroy them.

9. Cover yourself

The increasing rise in fraud, phishing and identity theft has led to the emergence of a new type of insurance; identity theft cover. An array of banks on the high street are now offering cover in case someone steals your identity and obtains credit or opens bank accounts pretending to be you. As far fetched as it might sound, identity fraud is on the increase but you can avoid it by taking the above steps. And if you’re still concerned you could insure yourself against it.

However you should note that the press has made much about these policies praying on people’s fears since banks already refund any money lost in the case of identity fraud. However it can offer help in rectifying your credit rating and paying any solicitors fees needed to clear your name.

10. If you do experience fraud…

Contact your bank immediately. The emergency 24 hour number will be on your last statement and the sooner you report it to your bank, the sooner your funds will be returned. You will also need to cancel your card and get a new one which can take a few weeks.

It’s a good idea to try to find out how the money left your account so that you can be extra careful next time. Banks are committed to looking after your money and will refund you as long as you took reasonable care – such as the steps above – not to leave yourself open to fraud. They investigate all cases and you won’t get your money back if they find that you have given out your personal details such as PINs and passwords, or that you didn’t report a lost card immediately.

For more information and advice on avoiding credit card fraud contact your local bank or visit the CardWatch website.