Credit card Guides

10 tips on avoiding credit card fraud

Updated: Tuesday 29 November, 2011

By Martin Fagan

Plastic has become the new cash, but to ensure you don't get caught out by credit card fraud, there are certain things that you need to be aware of.

As increasing numbers of people use their cards to pay their bills, buy clothes or do their shopping online, incidences of credit card fraud have also risen. According to Financial Fraud Action UK (www.financialfraudaction.org.uk), card fraud losses accounted for more than £365million in 2010.

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, can be immense.

But you shouldn’t let the fear of fraud put you off buying goods and services with your plastic. There are a number of steps that you can take to protect yourself, and you can start by following our top 10 tips on how to avoid credit card fraud.

• 1. Keep your personal details secret
• 2. Cover your tracks
• 3. Get extra protection
• 4. Protect your PC
• 5. Beware of cold callers
• 6. Stay secure online
• 7. Be cautious in shops too
• 8. Be vigilant
• 9. Cover yourself
• 10. If you do experience fraud…

1. Keep your personal details secret

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

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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.

After cheque stubs (which have your account number and sort code), arguably the biggest single threat to your card security is the payment counterfoil on the bottom of your statement. In an age where almost everybody pays their card by direct debit, the counterfoil is a hangover from the days when people paid their credit card over the counter at a bank. Before filing their card statement, many tear off the counterfoil and throw it away. But this slip has your card number and sometimes the date of expiration on it and is gold dust for potential fraudsters, so shred it.

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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, in order to complete any online transactions, your individual password or arandom selection of three characters from that password will have to be entered as well as the normal card details.

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

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4. Protect your PC

Having up to date and reliable antivirus 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.

Antivirus 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 this software so that you’re always protected against emerging threats.

Some internet providers offer free antivirus and firewall software as part of their packages. Go to Broadbandchoices.co.uk and do a search to see if your provider offers this. Otherwise, good antivirus software from internet security companies such as Norton or McAfee can be bought online and easily installed for around £40.

Find out more about online security with Broadbandchoices.co.uk.

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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’s or passwords over the phone.

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6. Stay secure online

You should never follow a link from an email and enter any financial details or passwords. Always login to 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 organisations would never ask you to do this via email and advise customers to delete any such emails and certainly not click on any links therein.

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.

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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 alongside or behind you and never use a cashpoint if it looks like it has been tampered with.

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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, preferably in a shredder.

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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.

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, such insurance can offer help in rectifying your credit rating and paying any solicitors fees needed to clear your name.

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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 pin’s 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 (www.cardwatch.org.uk).

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