How Credit Card Fraud Works

Paying with a credit card should not be an experience that leaves you with apprehension. However, more and more Americans are finding themselves caught up in a credit card dispute after becoming victims of credit card fraud. Often times a simple transaction is responsible for a crime that can potentially turn a credit card holder’s life completely upside down and leave them vulnerable to the most common forms of identity theft.

What is Credit Card Fraud or Identity Theft?

According to statistics, one person every four seconds reports a credit card dispute after becoming the victim of credit card fraud. Credit card fraud or identity theft is the stealing of an individual’s identity by a fraudulent entity to use for various purposes including purchasing items, obtaining cash or assuming a false identity in the commission of a crime.

All a criminal needs to steal an identity is a name, social security number and date of birth. With as little as these vital pieces of information an identity thief is able to get a loan, have access to or open up a bank account in a person’s name, lease or buy a car, get insurance, purchase flights or merchandise over the phone or Internet, or worse case scenario, use a stolen identity in the commission of a crime.

This information can be obtained from a mailbox, trash can, change of address request or a receipt from a hotel, restaurant or retail outlet. This exposure of information can lead to many forms of identity theft leaving individuals to fight their credit card dispute with a maze of phone calls to law enforcement and financial institutions. Armed with this information, any person with criminal intent can be well on their way to purchasing goods or services without the knowledge of the cardholder until they receive their credit card statement.

What Are The Most Popular Venues for Credit Card Fraud?

According to several studies involving identity theft, opportunists steal credit card data from the hospitality industry more than any other venue. This means every time you check into a hotel with a credit card you may be leaving yourself vulnerable to having your identity stolen and becoming involved in a lengthy credit card dispute.

Out of the 218 credit card fraud investigations from 24 countries studied, 38 percent of the thefts occurred at hotels. After the fraud was committed, victims did not realize the theft had taken place for an average of 156 days after the incident occurred.

The most targeted industries for credit card fraud include the following:

  • Hospitality industry
  • Financial service companies
  • Retail stores
  • Food and beverage outlets
  • Business services
  • Technology
  • E-commerce
  • Travel
  • Education
  • Manufacturing

Credit card information is often obtained through the following means:

  • Fraudulent Web Sites
  • Fraudulent charities
  • Pick Pocketing
  • Phishing
  • Credit Card Swapping at ATM Machines
  • Skimming

What Should I Do If I Suspect I Have Been A Victim of Credit Card Fraud?

  • If you are a victim of identity theft, you should alert you bank as soon as possible.
  • Finding the transaction numbers of the suspicious purchases will serve to avoid problems with your credit card dispute.
  • Call the police and file a criminal report.
  • Contact the toll-free fraud number for one of the three major consumer reporting companies to place a fraud alert on your credit card.

How Do I Avoid Credit Card Fraud?

  • Destroy any credit card that has expired.
  • Immediately put you signature on new cards.
  • Don’t keep your PIN in your purse or wallet.
  • Use caution when giving information to websites or unknown individuals.
  • Verify transactions with receipts.
  • Fill in all lines of credit card receipts.

Credit Card Dispute can be a frustrating and time consuming process. However by taking a few precautions you can protect yourself from credit card fraud while keeping your identity safe.

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