There are various types of credit card fraud, all of which have the same purpose: to get your account information and use it to make unauthorized purchases. Scammers have developed ways to do this using the telephone, Internet and fraudulent card readers. The Privacy Rights Clearinghouse says credit card fraud victims typically spend 600 hours or more undoing the damage.You can prevent this problem by knowing and avoiding the most common types of credit card fraud.
Phishing
Phishing refers to getting you to disclosed your credit card information to a criminal. You may receive an email stating it is from your bank and warning that your account has been frozen. You are instructed to click a link and enter your name, account number, validation code and other information to reinstate your charging privileges. The website may look legitimate, but it has nothing to do with your bank. This same scam is also done with text messages directing you to a website or telephone calls by criminals claiming to be bank employees.
Skimming
Fraudulent credit card readers, called skimmers, capture your information electronically so it can be used to make unauthorized purchases. Scammers may set up a skimmer at a gas station pump, automatic teller machine or anywhere else you might swipe your card. Store employees may also skim your card. For example, a restaurant server who takes your card to run it through for a legitimate charge may also run it through a skimmer when he is out of your sight. Jame Van Dyke, a financial consultant quoted in USA Today, says the data will be used to make fake credit cards.
Telemarketing
Telemarketers may try to get your credit card information for worthless products and services, the Federal Trade Commission warns. For example, you will be offered a supposedly free gift card and asked for your credit card number to pay a dollar or two for shipping. This enrolls you in a club with high monthly charges that is nearly impossible to cancel. Unscrupulous callers may also imply they are affiliated with your bank and offer to lower your interest rates. They will charge you hundreds of dollars and do nothing.
Checkout Counters
Criminals may observe your credit card number and expiration date while you are making a purchase at a checkout counter that requires you to swipe your card or hand it to the clerk. They can use this information to make online purchases through merchants that do not require the validation code. The scammers may even get your code if you turn your card over within their field of vision.
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