The Insidious Market for Stolen Credit Cards

Thief stealing credit cardIdentity theft continues to escalate, confirmed by Javelin Strategy & Research with the release of their 2013 Identity Fraud Report. Their statistics show that victims of ID fraud increased by more than one million in 2012 with $21 billion lost to the thieves. One of the top ways your identity is compromised is when a thief gets hold of your credit card information either by illegally securing the actual card or the account number and necessary identification information.

How a Card is Stolen

Having an actual credit card stolen is generally a result of mishandling by the account holder. This can happen in a number of ways that make your card vulnerable. You could casually leave your wallet or purse in a public place, accidently drop the card in the mall, leave it at the cash register or lose it in some other way where an unscrupulous person picks it up or takes it from your wallet or purse.

Another risky area is your mailbox where a new or replacement card can easily be lifted. Outgoing mail is especially lucrative for thieves because it may include bills that are being paid by check or credit card. Credit card offers, bills, insurance statements, and other mail contain a wealth of information that can be used by a thief.

A common location for this type of theft is apartment complexes and housing where mailboxes are in one location.

How an Account Number is Compromised

It is much more common for a thief to gain access to your account number than the card itself by stealing it from personal paperwork or having your account breached through the multiple companies that handle the numbers.

Applications from mailboxes or trash can be filled out and redirected to a bogus address. A crook could file a simple change of address form with the post office or by contacting your creditors and have your personal mail sent to another address.

Credit card theft is often a team effort. Some thieves have an inside accomplice at a retail store or restaurant who swipes a customer’s credit card through a separate machine to steal the information. After accumulating a number of accounts, they sell the account information in bulk to other crooks for as little as $1 each.

High tech thievery occurs when a device is attached to legitimate consumer technology such as an ATM or gas station card reader with every keystroke recorded along with the account number.  Crooks also take advantage of unsecured technology and transactions made over public servers like those provided by libraries, schools, and coffee shops – a hackers dream to steal your credit card information.

How a Thief Uses a Credit Account

A crook has a number of ways to steal from your credit card account with the actual card. The simplest and quickest use is to present the card for purchases immediately by posing as the cardholder. In a perfect world, fraudulent on-site transactions like these would be impossible for a thief to accomplish, if retailers would insist that every person paying with credit provide their identity before approving a purchase – but that’s not the case for many shoppers.

Another common way to use a stolen credit card is ordering products over the phone or on the web. A popular purchase is prepaid or gift cards that can be paid for immediately and used at a later date. This crime requires no face-to-face interaction and is astonishingly easy to pull off and provides a sense of invincibility unless the thief gets too greedy. Merchandise bought with a stolen card will be shipped to an abandoned house or somewhere that the thief can get to without revealing his own identity. While major online retailers have put in place sophisticated security measures that require more sensitive details before a transaction is approved, there are hundreds of thousands of merchants who only require the information that can be found on the card and accessed through public online records.

Protecting against Credit Card Fraud

Common sense will win at the end of the day to safeguard your credit cards. This is a case when being overly protective is called for. Take the card you’re paying with personally to the cash register and observe the entire swipe, never allowing the card out of your sight. It is crucial to never lend a card to anyone and never keep it visible at the ATM or the store any longer than necessary.

Don’t allow your computer to store passwords and turn off auto-fill options. Maintain security software and anti-malware programs on all computers and be sure to keep them up-to-date. Shred all your personal documents before throwing them away to prevent them from falling into the wrong hands.

Check your monthly statements thoroughly for any new unauthorized transactions. Report any fraudulent transactions immediately to the credit card company and have the card cancelled. Procrastinate and you may be liable for more than the $50 maximum you are required to pay by law. While theft of credit cards may be on the rise, being diligent and you will make it harder for a crook to find you an easy target and hopefully move on.

Christopher Arthur is a blogger and regular contributor to ASAP Credit Card’s Credit Card Blog. He writes credit and debt related topics, but also enjoys sharing tips on frugal shopping and money saving tips. He strives to provide reputable educational resources to assist consumers with their finance and money management decisions.

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Posted on November 18, 2013 by in Credit Monitoring

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