Credit Repair

Make Sure You’re Not a Victim of Credit Card Fraud

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U.S. consumers and businesses love credit cards. It’s easy to understand why. Credit cards may offer rewards, provide extra protection on purchases and make it convenient to buy things without carrying around wallets full of cash.

In fact, credit card usage is so popular that in 2017, U.S. consumers and businesses made 40.8 billion credit card transactions with a total value of $3.6 trillion, according to the Federal Reserve Payments Study.

Of course, whenever there’s that much money at stake, thieves and fraudsters are never far behind. According to the FTC’s 2017 Consumer Sentinel Network Data Book, identity theft accounted for nearly 14% of all consumer complaints to the FTC in 2017, with credit card fraud being the most common type of identity theft reported.

Unfortunately, in our increasingly cashless society, credit card fraud is a part of life. However, there are many protections for consumers. And while you may not be able to avoid becoming a statistic altogether, you may be able to catch fraudulent transactions early and minimize the damage they’ll do. Here’s a look at how you can spot the signs that you have become a victim of credit card fraud.

Signs you’re a victim of credit card fraud

1. Charges you don’t recognize on your account

Whenever you pull up your account online or review your monthly credit card statement, look out for transactions you don’t remember making. If you notice any unauthorized charges, immediately contact your credit card company to dispute the charge.

Be especially wary of small transactions you don’t recognize. In the last few years, there’s been a significant increase in the amount of card testing fraud. That’s when thieves test stolen credit card numbers with small purchases that the cardholder might not notice. Then, they make a large-dollar purchase on the card.

Under the Fair Credit Billing Act (FCBA), your liability for fraudulent credit card charges is limited to a maximum of $50. What’s more, many credit card issuers have zero-liability policies, meaning you won’t be responsible for any fraudulent charges made on your account.

2. A lapse in monthly statements

Sometimes things get lost in the mail, but if your credit card statements go missing, it could be more than just a post office mishap.

Credit card thieves may change your address with the credit card company because they don’t want you to receive statements listing fraudulent charges or late notices when bills go unpaid.

Also look out for a change of address confirmation from the U.S. Postal Service. It’s easy for thieves to change your address with the post office. That’s why the post office sends a “Move Validation Letter” to both new and old addresses when a change of address form is filed.

If you receive a change of address confirmation that you didn’t request, call the post office and report the fraud.

3. Accounts on your credit report that you don’t recognize

You are entitled to receive a free credit report every 12 months from each of the three credit reporting bureaus (Equifax, Experian and TransUnion) from AnnualCreditReport.com. When you order your reports, review them to make sure you recognize all of the accounts on your report.

If there’s been a new hard credit inquiry on one of your reports, it could mean someone tried to open an account in your name. Sometimes, you might not recognize an account because a valid creditor reports to the credit bureau under a name that is different than the one you know them by. For example, a store card might appear under the name of the bank used to finance your account. But sometimes unfamiliar accounts are a sign that your identity has been stolen and used to open new credit in your name.

4. Your card is rejected when you try to use it

You offer to pick up the tab for lunch with friends, only to have your credit card declined. This can happen for a number of reasons (equipment malfunction or an expired card, just to name a couple), but your card can also be declined because fraudulent charges have maxed out your available credit.

If your credit card is declined, call the credit card company right away to ask why.

5. Your credit card issuer notifies you that you’ve exceeded your credit limit

Some credit card issuers will let you make charges on your account, even if you’ve exceeded your credit limit. When you swipe your card, it won’t be declined, but you may receive an email or text alert from your credit card company letting you know you’re over your limit. If you usually carry a balance well below your available limit, this is a red flag that someone’s been making unauthorized charges on your account.

6. You receive calls from collection agencies for accounts you didn’t open

Fraudsters can open credit accounts in your name and run up big balances. If they provided the creditor with an address different from your own, you might never receive a statement. However, when your account is turned over to a collection agency, bill collectors will work hard to track you down.

How to protect yourself from credit card fraud

You may not always be able to prevent credit card fraud, but you can minimize the chances of it happening to you. Here are a few tips from the Federal Trade Commission:

  • Don’t give out your credit card number over the phone or via email unless you’ve initiated the transaction with a company you know to be reputable.
  • Carry only the cards you need in your wallet or purse.
  • Keep an eye on your card when you hand it over at a restaurant or retailer. Make sure you get it back before you leave.
  • Double-check a credit card slip before signing to verify the total. If there are blank lines above the total (space to write in a tip, for example), write in your tip amount or draw a line through it. Never leave it blank. Save receipts to compare to your statements.
  • Open your bills and statements promptly or check them online. Make sure you recognize every purchase made — even low-dollar transactions. Report any questionable charges to the credit card company.
  • Call your credit card company to change your address when you move.

If your credit card company offers it, sign up for notifications of all charges via text or email so you’ll know right away if your card number has been used without permission rather than waiting for your monthly statement.

What to do if you’re a victim

If you discover your credit card number has been stolen, or unauthorized accounts have been set up using your name and Social Security number:

  • Call your bank and credit card companies right away. They may close your accounts, issue new cards and investigate any unauthorized transactions.
  • File a police report.
  • Report the theft to the Federal Trade Commission.
  • Call Equifax, Experian and TransUnion to place a fraud alert on your credit reports.
  • Place a freeze on your credit report, which will stop anyone from being able to open new credit accounts in your name.
  • Consider enrolling in credit report monitoring or identity theft protection service. There are free monitoring services, such as My LendingTree. Equifax, Experian, TransUnion and several third parties offer credit monitoring services for a monthly fee. These services watch your credit report and alert you to any changes.

Bottom line

Credit card fraud isn’t just an inconvenience. Thieves could open new credit accounts in your name and max out your cards. If you don’t spot that early enough, payments will go missing and the accounts could eventually be referred to collection agencies — all of which can wreak havoc on your credit score.

Learn to recognize signs of credit card fraud and take proactive steps to prevent becoming a victim. Even with the best precautions in place, credit card fraud can happen. But the sooner you realize it’s happening, the faster you can act to limit the damage and start getting it resolved. And every little bit helps when it comes to keeping your credit secure.

 

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