Credit Card Fraud Up Close

We live in a fast paced world, dependent upon electronic spending, it can be easy to lose track of how many charges you rack up on your credit card each monthly. But simply paying your bill blindly, without scrutinizing each transaction, might be leaving you vulnerable to identity theft.  In many cases, identity thieves will only charge one or two items to a stolen credit card at a given time so that those charges might easily blend in with the legitimate charges appearing on someone’s credit card bill. Keeping good track of credit card purchases is essential to protecting yourself from becoming a victim of identity theft and credit card fraud.  

The Fair Credit Reporting Act was established to help protect consumers from being responsible for fraudulent charges made to their credit cards. Under this act you would only be responsible for up to $50 worth of the fraudulent charges (per stolen card), which is a significant benefit considering many thieves aim to purchase big ticket items worth upwards of $1,000. If you think you have been a victim of credit card fraud, and you want to seek protection under the Fair Credit Billing Act there are several specific steps you must follow: 

1. Write the creditor at the address found under "billing inquiries." The letter should contain your name, address, account number, and the description of your billing error. It should also include copies of your police report and any other documents that support your case.

2. Make sure the letter is received within 60 days of the first bill that contained the error. Make sure you know when to expect your statements so you can be on the alert if the thief changed your billing address and you don’t receive the bill.

3. Send your letter by certified mail to ensure delivery, and request a return receipt for yourself. 

4. Keep a copy of your dispute letter and any other documents related to the matter. The creditor is required to acknowledge your dispute within 30 days after receiving your letter and will resolve the dispute within two billing cycles or 90 days. 

Identity theft is the fastest growing crime in America, and over 9 million people fall victim to it each year. Credit card theft is one of the easiest forms of the crime to commit, and even novice thieves don’t seem to have a problem successfully pulling it off.  For instance, all you have to do to put yourself at risk is eat in a restaurant and pay with a credit card. Waiters and waitresses are usually prime targets for identity thieves—not to have their identities stolen, but to be approached about stealing the identities of restaurant patrons and selling them to professional thieves.  This form of the crime is usually referred to as skimming. Your waiter will take your card back to his register where he’ll swipe it once for your meal, and a second time onto a magnetic card reader. Later, he makes a copy of that card and sells it to someone else. It's that easy for you identity to be stolen.
 

Because it’s so easy for your identity to be stolen, you really have two options when it comes to protecting yourself: 1) Use cash and not credit or 2) Keep close track of all of your credit card purchases each month. It’s a good idea to record all of your credit card receipts in a ledger similar to the one you use for your checking account so that you can reconcile your ledger and your credit card bill each month. This eliminates having to ask, “Now, did I really buy that this month?” Memories aren’t reliable, and you can easily trick yourself into believing you purchased something you truly didn’t.  

Even if you believe that your particular case has been isolated to one credit card, for identity theft protection it is still a good idea to alert all three credit bureaus (Experian, Trans Union and Equifax) and ask them to place a security freeze on your credit. That way, thieves cannot take the information they currently have about you and open new credit in your name.  Credit card theft is one of the most common forms of identity theft. Protect yourself, and protect your family. Watch your bills closely, and when possible use cash just to be safe.