How to Avoid Being the Victim of Identity Theft
Debit and Credit Card Fraud Prevention Methods
May 5, 2009
Identity theft has been on the rise for a number of years. The most popular financial crimes include debit and credit card fraud, non-delivery of items and auction fraud. Card Not Present (CNP) fraud has proven extremely popular as it is easy for a criminal to avoid detection.
Latest Debit and Credit Card Fraud Statistics
In 2009, the US-based Internet Crime Complaint Center stated that it had received 275,284 complaints. This represents an increase of 33.1 per cent compared to the previous 12 months. Of these complaints, 72,940 were referred on to federal, state and local law enforcement agencies. The total dollar loss from these illegal transactions amounted to $264.6 million or $931 per average complaint.
Ways to Prevent Identity Theft
- Shred credit card and bank statements. Consumers that throw out bank statements should always ensure that they are completely shredded. This prevents credit card fraud and identity theft as statements cannot be used as identification for merchants or credit applications.
- Order a credit report. Order a copy of a credit report from Experian, Equifax or TransUnion. Experian currently offers a customer the chance to see their credit report online for free for a period of 30 days. Scan the report for signs of identity theft.
- Offers of money. An email offering a large sum of money in return for personal bank details is a scam. Typical examples include lottery wins for tickets that were never purchased and offers to wire huge sums of money from abroad. These emails can easily be identified because of the use of poor English. The most telling sign is that people don't offer to send millions of dollars to someone they don't know, let alone trust.
- Phishing emails. A consumer receives an email purporting to be from financial institution. Avoid clicking on links contained in the email asking to 'update security information due to a breach'. The link may look official, but the web site address is bogus and information will be used to commence credit card fraud or full identity theft. Only log-in at the official bank web site.
- Avoid carrying a social security card. Carrying a social security card could easily lead to identity theft should a wallet or purse be stolen.
- Check bank statements. Thoroughly scan bank statements for transactions that appear unfamiliar. Whilst companies regularly use different names, a quick call to the bank can usually reveal the name of the company that has carried out the transaction.
What to do if Credit Card Fraud Takes Place
- Put a block on the card. Contact the financial institution and ask them to put a block on the card to prevent any further credit card fraud from taking place.
- Report identity theft to the police. Should a consumer be the victim of identity theft, the matter should be reported to the police. Whilst it is virtually impossible to prosecute the person behind credit card fraud, registering the complaint and receiving a crime number will help in terms of getting a personal credit report back in order.
- Chargeback to the merchant. A chargeback involves the merchant compensating the victim of credit card fraud or identity theft for any financial loss. The 'legitimate' cardholder will sign a declaration from the bank stating that they did not make the transaction.
The majority of credit reference agencies now offer a full service to help in the event of credit card theft or identity theft. All financial institutions also have a specialist department, although some are more helpful than others.
The majority of people will never be a victim of credit card fraud, let alone full identity theft. It remains sensible to take some simple precautions to avoid this unwelcome event from ever happening. Don't carry social security cards about, shred unwanted bank statements and avoid obvious online scams designed to part someone from their personal details.
Readers that found this article useful may also be interested in finding out more about critical illness insurance or life insurance to protect their families from the unexpected.
Sources
Internet Crime Complaint Center
Goodridge, Elisabeth. "Steps to Prevent Identity Theft, and What to Do if It Happens." New York Times.
 |
