CONSUMER ACTION - Credit Card Fraud Training Credit Card Fraud An Educational Partnership of...

CONSUMER ACTION - Credit Card Fraud Trainingwww.consumer-action.org

Credit Card Fraud

An Educational Partnership of Consumer Action and Chase

©2009


Overview of Topics

•Recognizing types of Credit Card Fraud•Protecting yourself from fraud•Steps to take when fraud strikes•Resources & referrals


Credit Card Fraud

• Unauthorized charges to your credit card

• Counterfeit cards


Credit card fraud can occur when

• cards are lost or stolen• mail is diverted by criminals• employees of a business steal

customer information


Why does credit card fraud matter?

• The Federal Trade Commission estimates that 10 million people are victimized by credit card theft each year

• Credit card companies lose close to $50 billion dollars per year because of fraud

• These costs “trickle down” in higher interest rates and fees for all consumers


The bottom line...

• All cardholders pay for credit card fraud losses– Victims spend time and money to

repair the damage– Credit card issuers charge higher

fees and interest rates to cover their losses


ID Theft

• Identity theft is the use of someone’s personal information, such as their Social Security number or date of birth, to commit financial fraud


ID thieves harmvictims by:

• using their names and other personal information to open new credit accounts

• accessing existing credit and bank accounts to make unauthorized purchases

• Victims of ID theft are not held liable for losses, but it takes time and effort for victims to prove fraud and clean up the chaos


Forms of Fraud

• Dumpster Diving– Stealing credit card information

from discarded receipts or account statements in people’s trash

– Shred unwanted documents that contain Social Security numbers, bank and credit card information and other sensitive financial information


Skimming

• When dishonest employees make illegal copies of credit or debit cards using a “skimmer” device that captures credit card numbers and other account information– The stolen credit information is

used to make purchases by phone and internet, or to make counterfeit cards


Phishing

• Phishing is a financial crime that starts with massive numbers of deceptive spam e-mails– These e-mails look like they come

from your bank– But they are just a trick to get

account numbers and passwords


Security Codes

• Credit card companies use security codes to help prevent unauthorized or fraudulent use by phone and online – These numbers help ensure that

you have the card — not just the account number

• Merchants are prohibited from keeping or storing any security codes after transactions are completed


Security Codes

• Security codes for Visa, MasterCard and Discover cards are the 3 digits located on the back of the card in the signature box.

• Security codes for American Express are 4 digits long, printed on the front of the card above the right side of the main credit card number.


New Cards

• For added protection, credit card issuers ask you to call from home to activate new credit cards

• As soon as you receive your new card, sign the back of it with a permanent black ink pen


Should you write “Ask for ID”?

• Writing “Ask for ID” in the signature space may not be a good idea as your transactions might not go through if the card isn’t signed

• Consider signing your card and also writing “Ask for ID”


In case your card is lost or stolen

• Record all your account numbers and company contact information and keep the record in a secure place

• That way you can easily find whom to call to report the loss


Protect your PIN

• Never write down your personal identification number (PIN)

• Never give your PIN to anyone


Protect your account numbers

• Never write your credit card number on post cards or on the outside of envelopes

• Never provide your card number on the phone, unless you know it’s a legitimate, reputable business

• Never give your account number to anyone who calls you on the phone or sends you an e-mail

• If you let others use your card, you are responsible for charges


Billing Statements

• Review credit card statements closely on the day they arrive– Report any questionable charges to

your card issuer immediately• A missing credit card statement may

indicate stolen mail– Contact your card issuer right away

if your bill doesn’t arrive around the usual date


Online account access

• If you have a computer, consider signing up for online account access

• This way you can track your account activity between statements


Liability

• Fraud victims are not generally required to pay for unauthorized charges

• Victims may be liable for up to $50 of the loss, depending on the circumstances


Protect your wallet or purse

• Keep a close eye on your belongings• Never carry all your credit cards• Bring only the 1 or 2 cards you might

need• Carry your credit cards separate from

your wallet• If your wallet or purse is lost or

stolen, call your credit card issuers immediately


Watch your credit card

• Watch closely when store or restaurant employees handle your card to make sure they are not copying or “Skimming” your credit card number

• After you make a purchase and your card is handed back to you, make sure the card is yours.


Take precautions

• Notify your credit card company if you are going to be traveling away from home to prevent any inconvenience if your issuer should block your account from being used in a different city

• Notify your credit card company if you are going to make any unusually large purchases so that your account is not flagged for possible fraud


Safeguard your mail

• Notify the post office and your credit card company immediately if you change your address

• Lock your mailbox. Never leave mail in an unlocked mail box or apartment building lobby

• Put your return address on out-going mail

• Shred unwanted credit card solicitations before discarding


Internet Safeguards

• If you bank online, don’t use “automatic sign on” for bank or credit card sites

• Avoid providing your credit card number to websites offering “free access”

• Install a firewall in your computer to prevent unauthorized access from hackers


Reporting creditcard fraud

• To report credit card fraud– Call your card company

immediately about• Lost or stolen cards or PIN numbers• Unauthorized charges on your

statement

– Request a fraud affidavit– Get a police report if necessary


The Fair Credit Billing Act

• is a federal law that gives you the right to resolve billing errors, including unauthorized charges– If something goes wrong, you have the

right to dispute the charge– To dispute billing errors on your

statement, contact your card issuer within 60 days from the statement date or you lose your right to file a dispute

• Note: There is no time limit for reporting fraudulent charges.


Disputing charges

• Always dispute billing errors in writing. You can call your card company and follow up with a letter.– Describe the dispute in a few

sentences– Send it to the correct address for

billing disputes – Do not include your dispute letter

with your bill payment


Helpful resourcesto know about


Free Credit Reports

• Online:www.annualcreditreport.com

• Phone:1-877-322-8228

• By mail:Annual Credit ReportP.O. Box 105281 Atlanta, GA 30348-5281


Federal Trade Commission (FTC)

• The FTC offers free publications on credit cards, billing rights and how to avoid credit card fraud

www.ftc.gov/consumer


The National Fraud Information Center

• The National Fraud Information Center, a project of the National Consumers League, offers advice and prevention tips

www.fraud.org1-800-867-7060


Your State Attorney General’s Office

• The National Association of Attorney General web sitewww.naag.org

• Check the phone directory to find your state office


Questions and Answers


Consumer Action

• Visit our web site: www.consumer-action.org• E-mail: [email protected]• Call: 415-777-9635

This presentation was created by Consumer Actionin partnership with Chase.

© Consumer Action 2009

CONSUMER ACTION - Credit Card Fraud Training Credit Card Fraud An Educational Partnership of...

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