Credit card fraud is one of the most frequent types of identity theft in the US. Prior to 2020’s unprecedented rise in fraud related to application for government benefits (likely as the result of COVID-19-related fraud), credit card fraud topped the list of identity theft types by a wide margin for multiple years in a row.
Key Points:
- US law protects you from significant financial damage resulting from credit card fraud.
- Act swiftly when you notice suspicious transactions on your credit card statements.
- Notify your credit card issuer and change the passwords/pins on all your credit cards.
- Contact the police, the FTC, and the credit bureaus to limit damage and accelerate recovery.
- Think twice before you share personal information online or in a live setting.
According to a report released in 2021 by the Federal Trade Commission, the number of reported incidents of credit card fraud in the US was an astounding 393,207, with 365,597 being new fraudulent accounts and 33,852 being fraud perpetrated with existing credit card accounts.
(Source: FTC)
According to the latest Nilson Report, worldwide losses to card fraud reached a staggering total of $28.65 billion and US card fraud losses accounted for 33.6% of those total losses. And the projection is that by 2027, card fraud losses will mount to $38.5 billion worldwide.
(Source: Nilson Report)
The more frequently we use credit cards, the more credit card fraud we invite, and the more money we collectively lose to fraudsters every year. Credit card fraud is not confined to one demographic, either. People of all ages across all states can fall victim to credit card fraud, as the following charts show:
(Source: FTC)
(Source: FTC)
All of these statistics reveal that it is not uncommon to become a victim of credit card fraud. The question is, what can you do if it happens to you?
Steps to Take If You Are a Victim of Credit Card Fraud
The good news is that most credit card issuers protect their customers through $0 liability policies concerning unauthorized charges. Even if your issuer doesn’t protect you this way, the Fair Credit Billing Act limits your liability for credit card fraud to $50.
While it may not cause you lasting financial harm if you notice the fraud and act quickly, credit card fraud can damage your credit score and temporarily upend your life.
Here’s what you should do if you find yourself in this situation.
1. Notify Your Credit Card Issuer
As soon as you notice dubious activity on your credit accounts, such as unauthorized, suspicious charges, let your credit card company know. Double-check first to make sure that the suspicious transactions are not the handiwork of a family member.
Besides suspicious transactions on your credit card statements, signs pointing to credit card fraud are:
- Calls from creditors you do not know
- Inability to access your accounts
- Inexplicable changes on your credit report, like new credit account additions, multiple hard inquiries, etc.
Fraudsters need time to max out your accounts and open new ones. By notifying your credit card company as soon as you notice something amiss, you deny criminals the opportunity to reach deeper into your pockets.
In response to your notification, the card issuer will close your credit card, send you a new one, and investigate the fraudulent activity.
2. Change the Passwords/PINs on Your Other Credit Cards
You can never be sure where the criminals who have managed to gain access to one of your credit cards got their information. They may well have compromised your other credit accounts as well.
To be on the safe side, change all your PINs and passwords to stop the criminals in their tracks.
Complete this step as soon as possible. Time is of the essence in this battle against financial crime. The sooner you act, the less damage the fraudsters will wreak on your credit accounts and credit score.
While you’re at it, change the passwords on your other essential online accounts as well.
3. Contact a Credit Bureau, the Police, and the FTC
Notifying the authorities of the ongoing criminal activity on your credit accounts is crucial. It will make it easier for you to mitigate any consequences of the fraud.
Contact a credit bureau (Equifax, TransUnion, or Experian) to request a fraud alert on your accounts or a credit freeze. Here’s why:
- The fraud alert requires additional proof of identity when someone tries to open a new credit account in your name.
- A credit freeze makes it impossible to open new accounts for its duration.
You need only contact one of the credit bureaus, as each bureau has to communicate any changes to the other bureaus. However, if you want to do it yourself, you can also contact all three major bureaus to make sure you head off any criminal activity in time.
The ramifications of identity theft can far exceed the confines of credit card fraud. Criminals may file fake tax returns in your name, provide your name in job applications and skip paying taxes, or commit a crime under your identity. They may even stick you with a criminal record.
Notify the police of the breach of your personal information as soon as possible to head off such problems.
If you report the theft to the Federal Trade Commission, that agency may provide you with a recovery plan, helping you set things straight with the police and credit bureaus.
4. Keep Your Eyes on Your Credit Reports and Credit Card Statements
Since you may never know how the thieves got their information about your identity, you can’t make an absolutely accurate guess as to the extent of the breach either.
Monitoring your credit card statements is a healthy habit.
Thus, caution requires you to keep a close eye on your credit card statements and credit reports for a few months after you first detect suspicious activity. Criminals may bide their time and wait until your vigilance wanes to make another move.
5. Exercise Caution with Online Shopping
Some online shopping sites save your credit card information to make future purchases easier for you. Whenever such sensitive information goes into a centralized database, you expose yourself to identity theft. Hackers may tap into such databases, exploiting the information themselves or making it available to other criminals.
Remove the credit cards from your online shopping accounts and change your passwords on these accounts as well. Taking a few extra steps at checkout to enter your credit card information each time may save you major trouble in the long run.
6. Only Share Personal Information with Trusted Parties
Do not fall for online scams looking to steal your personal information. If you need credit card help or credit card debt relief, only engage with trusted companies such as ClearOne Advantage. Because getting credit card help requires the sharing of sensitive financial information, be sure that you are dealing with a recognized, reputable debt settlement company. Look for companies with:
- High scores on sites like TrustPilot
- Accreditation with organizations such as Consumer Debt Relief Initiative (CDRI)
ClearOne Advantage checks all the boxes above, as our track record of resolving over $1 billion in debt for our clients illustrates. If you want help to deal with credit card debt, we’ve got you covered. Call 866-481-1597 to discuss the credit card debt relief options available to you with a Certified Debt Specialist, and get a free savings estimate.
The data and statistics referenced come from multiple credible resources that are cited throughout. ClearOne makes no representations or warranties regarding the accuracy of the information from these various resources and is providing the content for informational purposes only.
