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How to report credit card fraud

If you suspect you're a victim of fraud, here's what to do

Summary

Credit card fraud is shifting online during the pandemic as consumers do more of their shopping from home. Here’s how to detect and report fraud before it does real harm.

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Online credit card fraud is rising during the pandemic, as more people shop online. “Fraudsters adjust to the temporary new normal,” says Eva Velasquez, president and CEO of the nonprofit Identity Theft Resource Center.

Credit card fraud is the most common type of identity theft now – and it can cause problems for you if you don’t catch it fast. If you suspect you’re a victim of credit card fraud, here’s what to do.

What is credit card fraud?

Maybe you first heard of credit card fraud after a major breach, during which fraudsters accessed millions of credit card accounts at retail checkout. That kind of point-of-sale fraud was greatly reduced in the U.S. with the introduction of chip technology in credit cards. EMV (or chip) cards create a new transaction code each time a card is used, making them far more difficult to hack than older cards with magnetic stripes.

But cyber thieves can still get their hands on your information by buying batches of credit card numbers, details and personal information on the dark web. Criminals access that information during a data breach, then sell it to other criminals. Or you may inadvertently provide the bad guys with the information yourself, by trying to make a purchase on a fake shopping website or a donation to a fake charity.

Types of credit card fraud

The two most common types of credit card fraud are account takeover fraud and new account fraud. Fraud can also take place when someone clones your credit card or uses your card number to purchase something online or over the phone.

Account takeover fraud

Account takeover fraud happens when fraudsters use your credit card number to purchase items, so they can get the merchandise while you get the bills. Thieves buy lists of credit card numbers on the dark web. The information may include card numbers, expiration dates and security codes.

Fraudsters will buy up thousands of credit card numbers and then open up Netflix and similar accounts to test if the information they received works, says Tina Eide, senior vice president of global fraud and credit bust out risk management for American Express. If the small transaction goes through, they’ll then use the card to purchase bigger-ticket items.

New account fraud

You also may fall victim to new account fraud, in which the criminals open up new accounts in your name. Account takeover fraud is “by far more prevalent, because it’s easier to perpetrate,” says John Breyault, vice president of public policy, telecommunications and fraud at the National Consumers League.

Cloned cards and card-not-present fraud

Another type of fraud involves cloned cards and happens when criminals produce a replica of your card and use it to purchase goods. More common now is card-not-present fraud, which happens when someone gets your card number and uses it to buy things online or over the phone, situations in which just a credit card number is required.

How to report credit card fraud

Check accounts and change passwords

Before you do anything, log into your credit card account and check for suspicious charges. Have specifics ready before you report. Change the password associated with the account immediately, in case someone managed to hack your account online.

Call your credit card company

If you don’t recognize a charge on your account, contact your credit card issuer immediately. “The faster you identify something, the easier it is to help fix the situation,” says Jeff Arevalo, a financial expert at GreenPath, a credit counseling service.

If you spot fraudulent activity on your credit card, you should call the phone number on the back of your card to alert your financial institution. Do the same if you’ve been sent a phishing email or text and clicked the link that was included.

The most important thing, Breyault says, is to “dispute anything that looks unusual, quickly.”

Notify credit bureaus

With new account fraud, you’re likely to be unaware that a new credit card has been opened in your name. In that case, the crooks can run up credit card debt, and it can impact your credit report and credit score until you dispute the charges and it has been resolved.

You can order one free copy of your credit report from each of the three credit bureaus – Experian, Equifax and TransUnion – each year at AnnualCreditReport.com. Then look for any new accounts that might have been opened in your name.

Notify the police

You also might want to notify local police if you are a victim to fraud, Breyault says, especially if your actual credit card was stolen. You also might notify your state attorney general’s office, the Fraud.org website Breyault’s organization operates, or the FBI’s Internet Crime Complaint Center.

How to protect yourself from credit card fraud

If you’re shopping online, experts urge you to exercise caution when dealing with merchants you haven’t used before, especially if the prices look too good to be true. Velasquez recommends doing a Google search before making a purchase, to see if there are any complaints about the merchant, using sites such as Yelp or the Better Business Bureau.

If the website looks suspicious, or you spot misspellings, be particularly wary, Arevalo says: “Go with your gut.”

Review your statements

With all the threats out there, it’s important to keep an eye on your credit card accounts. Arevalo recommends that you regularly check your card transactions to make sure charges are accurate.

Review your credit card statements and call your issuer if any transaction looks unfamiliar. If you sign up for online statements and go paperless, it will keep crooks from getting their hands on your discarded statements.

Set up fraud alerts

If you believe you’re the victim of fraud, you can put a fraud alert on your credit report, Arevalo says. You just have to contact one of the three main credit bureaus and they will notify the other two. With a fraud alert, it’s harder for someone to open new credit in your name.

You can also set up an extra layer of protection by establishing real-time alerts for your credit card charges. You may be able to select from a variety of alerts, such as all card transactions, card-not-present transactions or transactions over a certain dollar amount. “We encourage people to set [the amount] very low,” Velasquez says, which can allow you to catch potential fraud early on.

Set up virtual account numbers

If your card issuer offers them, request a virtual credit card, which is good for a certain amount of time or for a particular merchant. That way if the number is compromised, the potential damage is minimized.

If you are shopping in person, consider using a mobile wallet. If you put your card information on your mobile device, you can use that to make payments. An encryption system substitutes a one-time digital token for your card information.

Check your credit reports

It’s important to check your credit report regularly. Federal law allows you to obtain one free copy of your credit report from each of the three main credit bureaus – Experian, Equifax and TransUnion – each year. But because of the pandemic you can receive one free credit report each week.

You can order the report at AnnualCreditReport.com, complete the Annual Credit Report request form, or call 1-877-322-8228.

Bottom line

While there is no foolproof way to protect yourself from credit card fraud, taking certain steps to prevent it – and then reporting it quickly – can go a long way to keeping you safe. Credit card fraud “continues to be a growing problem,” Velasquez says. Fraudsters are drawn to it “because the opportunity exists.”

Editorial Disclaimer

The editorial content on this page is based solely on the objective assessment of our writers and is not driven by advertising dollars. It has not been provided or commissioned by the credit card issuers. However, we may receive compensation when you click on links to products from our partners.

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