By now, just about everyone knows to guard the digits that are the keys to so many parts of our lives — Social Security numbers. checking account numbers and credit card numbers. But short of locking up a credit card as soon as you get it and never using it, there’s no way to be absolutely sure it will not be used fraudulently. After that, your best hope is to catch it quickly.
A credit card fraud victim, a woman we’ll call Shawn, recently discovered that digital alerts can save the day. She had her card set to send her an email notification if her Chase Visa was used for a purchase of $200 or more. She had those alerts set up for two uneventful years. And so when she learned on a recent night that $437 had been charged on her card. she immediately called Chase. It turned out the charge was for a Jet Ski rental, which made no sense to her, because it was after dark — about 9 p.m. — when the alert came through. But then she learned that the card was used for an in-person purchase at a beach in California, where it was close to 6 p.m. And yet her card was in her wallet.
She’s not sure what happened if or when the person who used her card number tried to return the watercraft. Nor does she know how or when her card data was taken. But this she knows: “I am very careful with my accounts.” If it could happen to her, it can happen to anyone. Because she reported the fraudulent use of her card so quickly, the charge was not approved (so the watercraft rental business became a victim as well).
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Keeping Tabs on Your Accounts
Credit and debit card cloning is becoming increasingly common, and while you can take precautions to try to avoid being a victim — Shawn has identity theft protection and a credit freeze — it’s impossible to entirely eliminate the risk. But you can limit the damage, as Shawn did, by setting alerts so that you get a text or email when your card is used to finance a purchase at or above an amount you choose. If it’s a card you rarely use, you might want to set up the alerts to let you know about any transaction. Some financial institutions now even offer the ability to switch a card on or off with a smartphone. (This is a new feature, and some banks and credit unions are working to develop their own.)
As a consumer, there are a few things you can do to protect yourself:
- Try to avoid letting your card out of your sight. If someone is able to get the binary code from the magnetic strip on the back, your information can be duplicated on another card.
- Check with your financial institution to see what kinds of alerts are offered, and sign up.
- Make a card with an EMV chip your preferred card. These are much harder to clone, says credit
card expert and Credit.com contributor Jason Steele.
- Look for skimmers. Those may be attached to ATMs or used by service providers who use handheld skimmers out of your sight (as in a restaurant). Warning: They can be hard to detect.
- Finally, monitor your credit card accounts. Daily is not too often. And, again, consider setting up text alerts or email notifications. (Large charges are not the only problem; some thieves use the cards for small charges that consumers are more likely to overlook.)
It’s worth doing because should you become a victim, it’s not over when you report the credit card fraud. You may have to spend time cleaning up your credit reports, or a low credit score resulting from fraud could keep you from getting a loan approved. (You can take a truly free look at your own credit data and monitor it on Credit.com .)
Dealing With Fraud After the Fact
As for Shawn, she closed that account to prevent further fraudulent transactions. Unfortunately, she’s had to deal with the effects following that action. She said she’s had phone calls from businesses where she had automatic payments tied to that credit card account, and she needed to give them a different account number because the charge didn’t go through. When she returned a purchase to a retailer, she realized crediting her account wouldn’t work, because that account was now closed.
The worst repercussion so far arrived recently in the form of a certified letter: Her home insurance had been canceled for non-payment. (It was not a warning letter, she said, and to her knowledge, the insurer did not call when the payment didn’t go through.) She’s working to straighten that out and make sure her home is insured.
And yet it could have been worse. Because of text alerts, the card was used fraudulently only once. There was far less to unwind than there would have been had the card been used more. And her credit was undamaged. But she’s telling her friends what happened … and thinking of lowering the threshold for her email alerts.
More on Identity Theft:
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Gerri Detweiler is Credit.com's Director of Consumer Education. She focuses on helping people understand their credit and debt, and writes about those issues, as well as financial legislation, budgeting, debt recovery and savings strategies. She is also the co-author of Debt Collection Answers: How to Use Debt Collection Laws to Protect Your Rights . and Reduce Stress: Real-Life Solutions for Solving Your Credit Crisis as well as host of TalkCreditRadio.com. More by Gerri Detweiler
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