Why Should I Worry About Credit Fraud?

Be afraid about credit fraud or identity theft. Be very afraid.

You may think it’s not your problem, so why worry about it? Right? Wrong… credit theft affects us all. How? Because whenever a credit fraud occurs, the thousands of dollars charged are dismissed, which can cost the card hold issuers having to “eat” the losses. This can result in higher fee and a rise in interest rates for your credit card.

Credit Theft Is a Rapidly Growing Problem

The Public Interest Research Group and the Privacy Rights Clearinghous both report that credit theft is a rapidly growing problem. Some credit bureau statistics even show that about one of every nine Americans have already been victims of identity theft.

Credit fraud can take several forms –– from the emotional pain and suffering caused by a stolen credit card to the surprise and shock of a pirated credit card account. In both cases, the problem can be solved by contacting your credit bureau to report a stolen card or an account that suddenly shows charges caused by unauthorized activity.
 
How Credit Fraud Can Occur Without Your Knowledge

More often these days, a credit theft on a particular account can occur while the credit card is still in your wallet. All a credit thief needs is your account number, account name, expiration date and/or your billing address.

Then, they can contact your credit card company, ask for a duplicate card, have it sent to a new address, and they’re in business to start charging anything they want –– until you realize what’s happening. This could take up to a month when you get your next statement or a few days, if you’re vigilant about checking your account activity online for charges and cash advances. But in the worse case scenario, a credit fraud thief can make a minimum payment on a new account billed to another address, and rack up even more debt.

Here are a few possible ways credit fraud can occur if someone:

• Collects your credit card number by a phone solicitation from what you think is a reputable company.
• Gets your number through Internet scams for credit theft or identity theft, such as sales offerings for a variety of goods and services.
• Steals your mail or trash with a “pre-approved card” offer.
• Copies your account number when you’re not aware of it, or has a dishonest employee in a restaurant or retail store share it.
• Gathers receipts from your trash, AKA “dumpster diving” –– this is a method sometimes used by private investigators, as well as credit theft rings.
• Rents an apartment or takes a job in your name.

Further Steps to Take to Minimize Credit Fraud Costs

• Combat credit theft by getting a free credit report at least once annually from one of the three major agencies to track your credit report and credit card activity.
  – Equifax 1-800-525-6285;
  – Experian 1-888-397-3742; and
  – Trans Union 1-800-680-7289.

• Treat your credit cards like money to keep them safe.
• Carry only one or two credit cards at a time in your wallet to minimize identity theft.
• Cut down the number of cards you use annually to a handful.
• Combat credit fraud by calling the Customer Service number for your credit card company if a bill is late to arrive at your address; ask if it’s possibly been redirected to a new address.
• Spend enough time reviewing your statement to ensure your credit card charges are correct.
• Contact your card issuer as soon as possible to report billing mistakes, lost or stolen credit cards.
• Be proactive in minimizing the information that can be stolen through credit theft –– don’t have a stack of credit cards, your Social Security card, passport or birth certificate in your wallet.
• Activate and sign your new credit cards they day they arrive.
• List your credit card account numbers and their individual expiration dates to quickly notify creditors if one is lost, stolen or the victim of identity theft.
• Don’t ever give a phone solicitor your credit card number –– only provide it by phone if you made the phone call.
• Instantly shred any pre-approved credit bureau card offers before throwing them in the trash, as well as anything else that may show your credit card information—from receipts to itineraries.