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How to Prevent Credit Card Fraud

What is credit card fraud? It is the use of your credit card by someone else without your permission or when you grant permission against your own will. Credit card fraud is prevalent nowadays because almost everybody has one. However, it doesn't mean you can't prevent it.

Credit card fraud occurs when someone else unlawfully utilizes your credit card to make unauthorized purchases. The merchant will then release the merchandise that has been purchased with the credit card but payment will not go through or become reclaimed. Those who make regular purchases online should be especially wary of credit card fraud since most cases occur for Internet transactions.

Types of Credit Card Fraud

Credit card fraud can actually occur in several ways. First and probably most common is when a credit card is stolen. It may take some time before the credit card owner realizes that the card is lost and reports it for cancellation. During this time, whoever has found the card will be able to make unauthorized purchases without your knowledge. There are many instances wherein the identity of the credit card holder is not checked anymore making credit card very easy in this case.

Another type of credit card fraud occurs when the employee of a merchant will copy or note down pertinent credit card information. This practice is called skimming and usually happens when a restaurant or bar takes your credit card for verification of the transaction. Since you are unable to see what transpires, the employee will take this chance to get the necessary information, usually with a magnetic stripe reader so that your PIN code can be obtained.

Account takeover is another kind of credit card fraud. The fraud takes place by contacting credit card companies and requesting that the address be changed and new PIN mailers be sent to them.

Credit Card Fraud Investigation

The United States Secret Service is in charge of investigations of credit card fraud, but only for purchases more than two thousand dollars. Because of this, most of the fraudsters actually limit their purchases below this amount so that they can fall under the radar. Together with Secret Service, cases of credit card fraud can be reported to the Federal Trade Commission. Although there is no assurance that an investigation will be carried out since the same restriction on the minimum amount applies, it may still be to your advantage to notify the proper authorities.

Credit Card Fraud Prevention

There are several things that you can do so that you can avoid falling victim to credit card fraud. First of all, you need to ensure that your credit cards are always kept in a safe place. If you have the chance to apply for a credit card with a photo, you should by all means take advantage of this added security that credit card companies provide.

Unless you were the one who placed the call, then you should not give your credit card numbers to total strangers. Always check the monthly billing statements from credit card companies and verify if there are any purchases that you did not make. When choosing between credit or debit options, always go for the former as this will be safer in terms of protecting your PIN number. Finally keep all your receipts, since these will contain your credit card number.