5 Surprising Things About Credit Card Fraud
June 20, 2010
Given the tough economy, it's probably not surprising that credit card fraud is on the rise.
The number and magnitude of identity fraud cases rose in 2009 over 2008, with more than 11 million victims reporting the crime and annual fraud costs totaling $54 billion last year, according to Javelin Strategy and Research in San Francisco.
Moreover, the Identity Theft Resource Center predicts the rise in fraud cases will continue for at least two more years as high unemployment lingers.
But here are five facts about credit fraud that might surprise you:
1. The credit card fraudster could be someone you know.
Identity theft victims knew personally the folks who misused their financial information, such as credit card numbers, in 16% of all ID theft cases, and 6% of victims reported a family member or relative as the thief, according to Federal Trade Commission survey reports.
2. Writing "check ID" on your credit card doesn't protect you.
You might have heard that writing "check ID" on the back of your credit card in lieu of your signature will encourage merchants to ensure that the person using the card is really you. But unsigned credit cards, including those that say "check ID," are considered invalid. Your signature helps merchants verify your identity.
3. Tech-savvy young people are slower to detect credit card fraud.
You'd think tech-savvy young adults would be quick to detect credit card fraud, given all the capability today to monitor accounts online and set up automatic e-mail and text message transaction alerts. (For more about transaction alerts, read Oversee Your Checking Account Using Transaction Alerts.) But young people ages 18 to 24 are the slowest of any adult age group to detect identity fraud, according to Javelin Strategy & Research.
4. Small-business owners are more likely to be victims.
Small-business owners are one-and-a-half times more likely than other adults to be victims of identity fraud, Javelin says. This is probably because they use credit cards and other bank accounts for both their business and personal lives.
5. Low-tech thievery still thrives.
Despite all we hear about high-tech methods to steal credit card numbers, such as skimming scams and computer hacking, low-tech methods continue to be a big threat. Identity Theft Resource Center executive director Jay Foley predicts many first-time scammers will resort to such low-tech methods as swiping credit card information from trash cans to steal account information, as well as sending phishing e-mails or posting phony ads on Craigslist.
Protect Your Credit Card Account
If you've been the target of credit card fraud, consult the step-by-step response plan, Identity Theft: What to Do if Your Identity Is Stolen.
Protect your credit cards accounts and your credit history by monitoring your account activity frequently online, checking your credit reports annually to make sure no fraudulent accounts have been opened in your name, shredding credit card offers before throwing them away, and never giving out your credit card number in response to unsolicited e-mails, text messages, or phone calls.