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What is credit card fraud and how can I prevent it?

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Credit cards are a useful tool in your wallet, but according to Which?, credit card fraud accounts for 39% of identity fraud cases in the UK. Make sure you’re not one of them by finding out exactly what credit card fraud is and how to prevent it. 

What is credit card fraud?

Credit card fraud is any kind of theft or fraud that involves a credit card. The aim of credit card fraud is to purchase goods without paying, or to steal money from someone else’s credit account.

What are the types of credit card fraud?

You can break down the various types of credit card fraud into four main areas:

  1. Lost or stolen cards are used without their owner’s permission.
  2. Credit cards are ‘skimmed’. This is when the card is cloned or copied with a special swipe machine to make a duplicate of the card.
  3. Card details – card number, card holder name, date of birth and address - are stolen, often from online databases or through email scams, then sold and used on the internet, or over the phone. This is often called ‘card-not-present’ fraud.
  4. Committing fraudulent applications in someone else’s name for a new credit card, without that person knowing.

Who is responsible for credit card fraud?

If you’ve been the victim of credit card fraud, you normally won’t be liable for unauthorised payments on the card during the fraud. This is because you’re covered under the Consumer Credit Act 1974. 

The Act means you can claim back the money you lost due to fraud.

There are two circumstances that would mean you would not get all the money back though. 

  1. If your card was lost or stolen, you are liable for the first £50. If you report your card missing quickly you’ll often have this fee waived.
  2. If you were behaving negligently – not paying enough attention to the security of your card and its details.

Here are some examples of when your bank might say you were negligent and wouldn’t reimburse your money:

  • It’s been 13 months or more since the fraudulent activity happened on your card.
  • Your card provider can prove you authorised the transaction.
  • You acted fraudulently – like pretending a payment wasn’t you when actually you know it was.
  • You didn’t protect your card details, PIN or password – for example writing your PIN down on some paper that lives in your wallet with your card.

How to detect credit card fraud

Detecting credit card fraud will take you a few minutes every few days. It might feel like a hassle, but not noticing someone is using your credit card details could land you with a hefty bill. 

  • Check your bank statements regularly, every few days. If there’s a charge on your statement you don’t recognise, call up your card provider and question it.
  • Check your credit report regularly, at least once a month. This will tell you if someone has applied for credit cards pretending to be you. Get in touch with Equifax Experian or TransUnion to get a report and to report any problems.
  • If you receive post you’re not expecting, get in touch with whoever sent it to you. 
  • Or, if you’re not receiving post you’re expecting, get in touch with whoever was meant to send it in case it’s being intercepted and stolen.
  • Set up alerts from your bank for payments made using your card. This means you’ll get sent something like a text message whenever your card is used.
  • If your credit card is declined check with your card provider. This could mean you’ve had a number of high-value payments on your card without you knowing. 
  • Your credit card provider tells you that you’ve reached your credit card limit. Just like with a credit card being declined, it could mean someone has been using your card details without you knowing. 

Victim of credit card fraud - what to do?

  1. Contact your credit card company. This will help to make sure that you’ll be reimbursed for the fraudulent charges on your card.
  2. Report the activity to Action Fraud using their online fraud reporting tool or by calling 0300 123 2040.
  3. Change your passwords and PINs. You might think that only one credit card has been hacked, but you might not know how they got the details to use that card, so other services you use could also be in danger of being used fraudulently.

After these three steps, you’ll need to see if there are any other signs of fraud. 

This means going through your bank and credit card statements for the last few months, as well as getting a copy of your credit file. This will help you to see if anyone has used your identity to apply for credit cards or loans without you knowing. 

How to report credit card fraud

You should report any fraud on your credit card by:

  1. Calling your credit card provider and explaining what’s happened. Normally you’ll be reimbursed for any charges you weren’t responsible for if you report fraud quickly.
  2. Use Action Fraud’s online tool to report the crime, or call them on 0300 123 2040.
  3. You can also report financial scams, such as investment fraud, to the Financial Conduct Authority (FCA)
  4. You should also contact credit reference agencies: TransUnion (Opens in a new window) Equifax Experian - if someone has applied for a credit card in your name. 
  5. Contact the Royal Mail Customer Enquiry Number on 03457 740 740 if you think your post is being stolen or redirected without your permission.
  6. Contact the issuing organisations for any lost documents like passports or driving licenses.

How to prevent and avoid credit card fraud

There are lots of things you can do to help you lower the likelihood of becoming a risk of credit card fraud.

  • Don’t let your card go out of your sight when you’re paying for things – you won’t know if it’s being copied or tampered with.
  • Be careful if someone contacts you when you’ve not asked to be contacted. That means steering clear of any unexpected phone calls, letters, emails or people knocking on your door.
  • Don’t give out personal information or login details like your PIN or passwords.
  • Chop up old credit cards, making sure you cut through the chip and magnetic strip.
  • Make sure you keep your computer and mobile phone software up-to-date. 
  • Always use strong passwords and don’t use the same password for multiple accounts. You should also change your passwords regularly.
  • Double check that companies you’re dealing with are legitimate before making payments. 
  • Don’t use public Wi-Fi for transactions. It’s much safer to use connections at home where they’re not used by many people every day. The data internet connection on your phone is often more secure than the one in the coffee shop or restaurant as well.
  • Use secure websites. You can spot more secure sites by looking at the start of the web address. Those that start ‘https’ are more secure than the ones that start ‘http’. 
  • Always log out of your bank account and website accounts, especially when you’re using a public computer.
  • Keep track of your post. If you’re expecting a statement or official document and it doesn’t arrive, speak to the organisation who sent it to you. 
  • Redirect your post when you move, otherwise your letters won’t reach you.
  • You could also use a call blocking service like the Telephone Preference Service (Opens in a new window). This should stop cold-callers, but not scam callers, because they’re not signed up to the guidelines. This means that any unexpected call will almost certainly be from scammers -and you don’t want to deal with them.
  • Don’t throw letters in the bin as they’re easy for people to fish out and use to steal your identity. Use a special confidential bin, or use a shredder.
  • Be careful what you share on social media. Remember, posts are often accessible by anyone, from anywhere, so if there’s personal information like your date of birth posted, it could be the missing piece for someone looking to impersonate you.
  • When using financial services company, check the FCA register of regulated companies (Opens in a new window). If they’re not on it, don’t use that company.
  • For non-financial service companies, check Companies House to find out their background, or search for reviews (Opens in a new window)
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