While credit card fraud is a form of identity theft, not all identity theft is credit card fraud. It just so happens that identity theft involving credit cards is the type you are most likely to hear about on a regular basis. This type of theft usually occurs in one of two ways: the thief can physically steal a person’s credit card number and then use it to make transactions that do not require photo ID, whether it’s because the purchase is for a small amount, it’s somewhere like a gas pump where there is no clerk present or it is transacted by a clerk who just doesn’t follow procedure by asking to see identification.
The second way is through phishing scams, in which a thief sets up a bogus website and the consumer is fooled into typing in his or her credit card information. In this case, the person simply gets the credit card number and security code and the consumer’s contact information, but this is enough for even less experienced thieves to change the address on the account and likely open a new one in his or her name.
While the thief is not completely taking over the victim’s financial life. For example, he or she is not using the victim’s Social Security number, this is still identity theft. By using a credit card in someone else’s name, they are pretending to be that person, whether or not that is the actual intent. The damage from simple credit card fraud can be severe, especially if the thief opens many credit cards or has one or more with a very high limit.
To help prevent credit card fraud, you should be very careful where you enter your credit card information on the Web. Watch out for emails that purport to be from a respected institution but have links that look suspicious. Also, if you’re making a credit card purchase online, be sure you’re buying from a legitimate website. Check for the https in the address bar and an icon that looks like a padlock. Keep your antivirus up to date, and beware of sites that it tags as suspicious.
If your credit card is lost or stolen, report it by calling the number on the back of your card as soon as possible. Don’t wait, thinking you may have simply misplaced it. There’s usually no charge for a replacement card, so no harm no foul.
Identity theft protection plans can also help, since you will be notified if someone opens a fraudulent account in your name instead of finding out somewhere down the road. Many of these services also scour the black market internet where identity thieves buy and sell your information like credit card numbers and bank accounts. See the Dateline NBC special with Chris Hanson on our homepage for some riveting examples.
Posted below for your convenience. Our favorite quote: Its a thieves market!