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Preventing Credit Card Fraud

By: Edward Mellett - Updated: 25 Nov 2012 | comments*Discuss
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Credit card theft and identity fraud is a growing problem affecting both financial service providers and their clients – you! Having your identity stolen can have serious consequences that can take months or even years to sort out, costing financial service firms and their insurers many thousands of pounds.

If someone has stolen a credit card, or has obtained enough information about you to start applying for new loans and credit cards, your credit score is going to be adversely effected. If this is not rectified, you will find it difficult to apply for credit in the future, may have trouble opening accounts and making investments and you will probably have difficulty getting a job (some employers regularly make credit checks as part of the interviewing process).

Things like house loans, vehicle financing and University loans will also be affected. In some cases, identity fraud victims may even be arrested for crimes they haven’t committed, because someone else is has completely stolen their identity and is living under their name as well!

How to prevent Credit Card fraud

There are a few things you can do to help prevent personal identity theft. After reading your post or sorting out old bills and bank statements, don’t just throw documents out in the rubbish. Receipts, utility bills, bank statements, loan statements and credit card offers and statements should also be completely destroyed before they leave your house. Otherwise, once these items are out of your sight, literally anyone could get hold of them. Criminals search through rubbish late at night in the hope they will come across valuable personal information, and they don’t need much to make your life a misery!

Buy a paper shredder and destroy everything you are throwing away to eliminate even the slightest possibility of someone finding out personal information. Alternatively, burn your paperwork, but make sure every page of written material is thoroughly cooked! When getting rid of credit cards themselves, use your shredder (if it can cope with plastic) or cut them into small pieces, making sure to split the signature strip, 16 digit number and chip, if there is one.

Trust No One!

When paying by credit card, never let your plastic out of your sight! Not long ago, when restaurants did not have mobile credit card machines, customers were forced to hand over their plastic to staff who would take it far, far away. Unscrupulous staff were then able to copy down details from cards, without the customer having any knowledge. To prevent this, make sure that your cards never leave your sight. If staff need to swipe your plastic in another room, go with them. After all, it’s your card, your cash and your identity at stake.

Don’t Rely on Staff Diligence!

Victims of card crime cannot rely on store staff to prevent criminals using their cards. Nowadays most staff are too rushed to properly check signatures when making card purchases, and even if a customer is challenged, they can always say their signature is not the same as usual because of a bruised hand, or something similar.

As for Chip and Pin, most stores will still allow customers to sign for credit card purchases if they cannot produce or remember their number, particularly for small purchases.

Further Precautions

The best safety measures you can take are to check your bills and statements on a regular basis or as soon as you receive them. Look for any purchases that you did not make, and call the credit card company immediately if you notice something you are suspicious of. If fraudsters are caught early, the repercussions will be much less for you, and your credit card company.

What to do When your Cards are Stolen

If you have lost a credit card, or it has been stolen, report the situation to your credit card company and the police immediately. The credit card company will put a hold on the account to prevent any purchases from going through and they can also track the location where someone has attempted to use the card.

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