Credit card fraud isn’t what it used to be.
In the old days, a fraudster trying to commit credit card fraud had to go through the trouble of obtaining a physical copy of the card, perhaps chancing upon a lost card or else skillfully pilfering one from your pocket.
After that, they’d have to brave the traffic, inconsiderate drivers, and nonstop radio commercials to make it to the local shopping mall before they even had a chance to make a buck off their fraudulent charges.
Not so today. With the rapid rise of digital commerce zipping along a constantly connected global network, credit card criminals don’t need your physical card to do harm anymore.
All they need today is the data on your card. And they’re getting more and more clever in how they try to obtain it.
Be aware of the methods fraudsters employ
You may recognize some of these methods used to gain access to your sensitive information:
- Phishing emails designed to ferret out personal information by enticing you to take action, such as by offering prizes or threatening would-be penalty like a subscription cancellation. These often urge you to respond on a quick timeline by inputting sensitive login credentials, in order to get you to act immediately before thinking better of it.
- Fraudulent robocalls, supposedly from official organizations such as the IRS. These often request that you call back quickly to provide information in order to avoid (threatened, falsely) legal recourse.
- Credit card skimming at ATMs, or installing a device into the ATM’s card-reading hardware itself to passively steal sensitive data from any card that uses it.
- Trap Wi-fi hotspots set up nearby reputable businesses, camouflaged to appear as though they belong to the business themselves. These are designed to coax you into logging into a fraudster’s nefarious network in order to capture any sensitive data you input while browsing, including passwords, email content, and even your credit card information, should you make a purchase while connected to the network.
How prevalent is credit card fraud?
Given all these new and sophisticated measures fraudsters are using to get their hands on our information, just how prevalent is credit card fraud these days?
It unfortunately happens frequently, and the needle is moving in the wrong direction.
The Identity Theft Resource Center (ITRC), which has been tracking security breaches of all kinds since 2005, reveals in their latest comprehensive report that data breach incidents in the U.S. hit a new record high last year of 1,579 breaches.
This figure, the report shows, represents a dramatic increase (44.7 percent) over the figures reported for 2016, which were record highs at the time.
The silver lining, if you can call it one, is that only about 20% of these breaches included credit or debit card information.
The ITRC defines a data breach as “an incident in which an individual name plus a Social Security number, driver’s license number, medical record or financial record (credit/debit cards included) is potentially put at risk because of exposure.”
That means this figure also included theft of Social Security Numbers, identity theft, tax-related fraud, and other types of related criminal mischief.
Yet, the reality remains sobering as the numbers climb. Last year the number of breaches that exposed credit or debit card information nearly doubled from the previous year, increasing 88% up to 14.2 million.
And credit card fraud leapfrogged employment or tax related fraud to become the most common form of identity theft, totaling more than 133,000 reports just last year, per the Federal Trade Commission.
All together, activity resulting from this fraud cost consumers more than $744 million last year alone. At the individual level, the median cost paid by innocent, well-meaning victims was $450. Imagine what you would do with $450. Now, imagine that being stripped away from you.
The ongoing personal cost of being defrauded
Becoming a victim of fraud can cause ripple effects beyond the sheer financial toll, throughout the victim’s life. As part of their reporting, the ITRC conducts Aftermath Studies that aim to shed light on fraud’s true impact on victims’ lives.
Their 2017 findings are devastating to grasp: more than 53% of victims experienced a sense of powerlessness or helplessness, and more than 75% of victims were severely distressed over the misuse of their personal information, with 7% reporting suicidal feelings due to the impact of the fraud.
A significant number of victims were forced to borrow money from family or friends, or sell their possessions to pay for expenses.
What’s worse, these problems rarely go away quickly. Nearly 62% of respondents had not yet resolved their identity theft case after more than five years.
The statistics are harrowing. The reality is almost incomprehensible.
How can you protect yourself?
One of the best ways to protect yourself from fraud loss is to take preventative measures and stay vigilant.
Medical professionals will tell you that it is significantly easier and more effective to prevent an injury from occurring than it is to treat it once you’ve been afflicted.
For example, there’s no doubt it takes a little extra time and effort to consciously think about practicing good posture each time you’re about to lift something heavy. But picture the work and stress you’d go through to rehabilitate an injured back.
Considering the potential alternative, the thoughtfulness doesn’t seem so bad, does it? Likewise with protecting your data.
Taking defensive measures ahead of time is the most effective strategy to keep yourself out of harm’s way, and catching fraudulent behavior soon after it happens helps reduce your potential loss significantly.
Here’s some good news.
Unitus has just launched an app for free to all members which gives you more control of your credit card data. It allows you both to take proactive measures against fraud, as well as to react quickly and respond firmly to any suspicious behavior.
- Enable or disable your card. Turn your card on or off instantly. If you lose your card, turn it off. When you find it, turn it on. Gain complete control over your card.
- Protect your card. Use your phone’s GPS to limit transactions within a certain geographical range.
- Monitor your card. Get notified of any card activity via text, email or push notifications.
- Restrict your card. Track spending and help prevent fraud by allowing transactions up to a certain amount. You can update limits at any time.
- Lock down your card. Use Fingerprint and Face ID Authentication, man added layer of security when accessing the app. Available on select mobile phone models and operating systems.
Other ways to protect yourself every day from credit card fraud
Unitus Card Guard will help you defend against and respond to credit card fraud. Outside of the digital world, there are more things you can do to protect yourself.
Consider this advice from our Card Services team here at Unitus:
- Never give out your account number or sensitive personal info over the phone unless you have initiated the call and you know you are speaking with a reputable organization. If someone calls you and asks you that information, your red flags should go up immediately.
- Likewise with emails – never answer an email requesting your account information. Leave the email alone, and call the company itself to find out if the request is legitimate.
- Keep your contact information up to date with your financial institution (such as home address, phone number, and email address). This ensures you can be contacted quickly if necessary to mitigate fraud losses, and limits the risk that you’ll miss an important communication falling into the wrong hands due to an incorrect address.
- Monitor your credit reports, your statements and your account activity regularly.
- Before you give your credit card number over the phone in a public place, take a good look around to see who may hear you and be extremely careful – you never know who could eavesdrop. Same for making a credit card transaction over a public wi-fi network. If you can, do your browsing and fill up your cart – then wait till you get home (or to a secure, non-publicly available Wi-Fi network) to complete the purchase.
One more thing
In 2016 alone, $21 billion in tax refunds was stolen from the American population as a result of identity theft.
Given the severity of the theft and sheer volume of personal information stolen, the financial ramifications could last for years.
To combat this, our friends at The Simple Dollar have created this guide to help any members who have fallen victim to identity theft this tax season, as well as anyone looking to prevent it from happening to them in the future.
It covers everything from:
- Recognizing tell-tale signs you’ve been victimized
- Taking steps to properly notify the IRS and FTC
- Rebuilding your finances and credit
- Reducing your risk of falling victim to identity theft
If you’re interested, here’s that link again. It is worth investing a few minutes to stay secure, prosperous, and growing!
Posted by: Dorothy Kehl
About the author: Dorothy has been the Card Services Manager at Unitus for more than 20 years. A native of North Carolina and an active advocate for humane societies, she is most at home when she is on the open road traveling with her husband Craig and her two dogs.