As EMV chip cards make it harder for fraudsters to reuse data stolen from a credit card’s magnetic stripe at a retail point of sale, thieves are turning to application fraud. That’s where a criminal applies for credit cards or other loans using your personal information, which is usually stolen online.
A study by Javelin Strategy & Research shows credit card application fraud exploded in 2015 — around the same time chip cards hit the market.
“So if you’re a criminal whose entire business has been predicated for five, 10, 20 years on reusing mag stripe data — that business is evaporating in front of your eyes, so you’re going to need to get new cards and this is how you do it,” says Al Pascual, head of fraud and security at Javelin Strategy & Research.
Pascual expects application fraud to double every year, as more corporate data breaches feed the dark web all the personal information needed to fraudulently apply for credit cards.
Steps to protect your identity
1. Beware of what you share on social media.
Cody Gredler with identity protection firm CSID, says it’s more important than ever to keep your private information private, especially on social media – one of the places you’re most vulnerable. “Say your maiden name is even in the name of your profile, or there is information about where you graduated from college or your kids’ names or where they go to school. All of that is the sort of information hackers can use to complete the piece of the puzzle when it comes to identity theft,” says Gredler.
2. Use different, complex passwords for each account.
Another important step in protecting your identity: Make your passwords long, complex, and different for each account, something too few of us do. A secure password should contain upper- and lower-case letters, numbers, symbols, and be at least eight characters long.
3. Check your credit report regularly at AnnualCreditReport.com or My.CreditCards.com.
Check your credit report regularly for signs of accounts you didn’t open or amounts you didn’t charge. You can get one free copy from each of the three major credit bureaus every year at AnnualCreditReport.com. You can also get a free credit report from our service, My.CreditCards.com.
4. Update software on computer and phone.
Install updates for your computer software and phone apps. Updates are meant to fix vulnerabilities developers continue to find.
5. Be aware of where you click.
Also, be aware of what you’re downloading and what you’re clicking on. With more than 150 million phishing emails sent daily, there is ample opportunity for fraudsters to trick you. “Criminals are becoming a little bit wiser now. Emails can masquerade as something from your boss or something from trusted sources, so really be aware on what you’re clicking on,” says Gredler.
6. Use a credit monitoring service.
Finally, for peace of mind, you can use a credit monitoring service. Not only will you get alerts about suspicious activity, but if your identity is stolen, the service can help you restore it.
So remember, while chip cards can help prevent some fraud, criminals are always looking to stay in business. Try not to help them succeed.