Pro Tips On How To Avoid Credit Card Fraud

Pro Tips On How To Avoid Credit Card Fraud

Credit card criminals are getting smarter, and you could be their next victim. More than half a billion pesos were lost due to fraudulent credit card transactions in the Philippines and at least 80,000 cases online have not been reported to the police in 2017.  

Besides the rising number of fraud cases, the variety of credit card scams are increasing as well. If there’s one thing that this tells us is that using a credit card responsibly doesn’t just end with how you’re spending.  

Traditionally, thieves use to steal credit cards but today’s scammers lurking in cyberspace are much more creative. From phishing attacks to taking advantage of users on public wi-fi hot spots, you can unknowingly find yourself falling victim to a credit card scam. In today’s information age, our credit card information has become more at risk for theft than it has ever been. 

Following are simple steps you can take to protect yourself.

1. Protect your information

An individual’s personal information can be another man’s treasure – literally. There’s a handful of stuff that anyone could easily do with your personal information, from the possibility of accessing your online accounts (what’s your first pet’s name?) to stealing your identity and using it to apply for different financial products.  That’s why it’s never safe to be too open about your own personal information especially in social media. 

Application fraud - what is it?
This is a form of identity theft where the fraudster will apply for a credit card under your name.  For this reason, banks require original documentation only and they will often telephone employers to confirm identity. They will usually first steal supporting documents, which are then used to substantiate their fraudulent application. Criminals frequently forge documents and provide false telephone numbers for places of employment.

What to do next?

  1. Notify your bank about the said fraud immediately by appearing personally in their office or branch.
  2. Close any questionable accounts that were opened under your name. 
  3. Work with your bank to update your security verification information. 
  4. Report the incident to the National Bureau of Investigation (NBI) through the following channels.
    Phone: 521-9208, local extensions 3429 (Chief) and 3497 (Staff)
  5. File a police report to obtain documentation of the said incident, which you can present to any parties where your identity was used and possibly exploited.

2. Protect your card

There are two types of credit card fraud that’s common today – credit card skimming and lost or stolen card fraud. These two types of credit card fraud are done differently, but they involve physical access to your card.

Card skimming - what is it?
A common form of credit card fraud, this involves electronically stealing credit card imprints with a machine that collects data from a credit or debit card’s magnetic strip. A device is placed on the magnetic strip of the card.  Often, credit card thieves install this device on credit card terminals or ATM card slots, thus capturing a card’s electronic information when used on it.  Once the card information is collected by the card imprint, it is then used to clone a credit card.

What to do next?

  1. Keep track of your credit card purchases. Check your transaction history and make sure you get a notification on your phone for all purchases made using your credit card.
  2. Contact your bank or credit card provider to block the credit card that was cloned. 
  3. Request for a replacement credit card. 
  4. File a dispute for any unauthorized transactions.
Lost or stolen card fraud - what is it?
This basic form of credit card fraud is still around, especially with the growing popularity of contactless payment features (like Visa payWave). It gets riskier for cards that are not chip and pin ready because anyone who gets hold of the card can easily make a transaction without you knowing it. Banks’ immediate measure to prevent unauthorized transactions on lost and stolen cards is to block it right away and replace it with a new card.  From the name itself, it’s either the card got stolen or you lost it yourself. Either way, the credit card will be in someone else’s hand.

What to do next?

  1. Review your credit or debit card purchases. Check your transaction history and make sure you get a notification on your phone for all purchases made using your credit card.
  2. Contact your bank or credit card provider to block the credit card that was lost or stolen. 
  3. Request for a replacement credit card.
  4. File a dispute for any unauthorized transactions.

3. Secure your card information 

This is the number one reason to keep your credit card information private. If somebody gets a hold of the expiry date and number of your card, CNP fraud can easily be committed against you.

CNP fraud - what is it?
Credit card thieves can steal credit card or account numbers from victims either by directly stealing your card’s information you unknowingly expose to them, or by phishing information from you through phone calls, emails, or malicious websites. Fortunately, most banks now require verification codes when doing online transactions with your credit card.

What to do next?

  1. Contact your bank and block the affected credit or debit card.
  2. Change your log-in credentials for your online banking, email address, and other accounts stolen. 
  3. Monitor the transactions on your card.
  4. File a dispute for any unauthorized transactions.

Security features that your credit card should have

In order to keep your credit card away from those pesky unauthorized purchases, make sure that you get these security features on your credit card.

Counterfeit defense

Just like paper money, credit cards are a target for counterfeiters. Criminals can skim the magnetic stripe from your card, copy it onto a blank card, then add a name and card number with an embossing machine to create a rough fake with your account information on it. 

Physical security features such as the signature panel, verification number, and holographic watermarks all add to the visual complexity of cards, and the EMV chip is much more secure than magnetic stripes. 

Liability protection

All banks are mandated by law to extend such benefits to all their account holders. The extent of coverage, however, may vary from one bank to the other and customers must be prepared to go through the bank’s dispute process which is needed to verify claims and ensure victims are fairly compensated.  Banks with higher coverage and more responsive fraud management will definitely gain their customers’ confidence.

Usage Monitoring

It shouldn’t be a surprise to anyone at this point that banks extensively monitor your purchases. All the data your card provider collects on you allows them to monitor your account for fraud quite effectively. 

Building a profile of your credit card spending habits will help them spot anything out of the ordinary in the transactions. 

Credit card features that can minimize fraud

When choosing a credit card, you should look beyond its perks and credit-related features. Nowadays, when choosing a credit card, you should not just focus on the rewards aspect but also its security features. Most banks in the country have rolled them out in the past few years, and for safety measures, you should update your card too by contacting your bank to make sure it’s packed with the added layer of security necessary today. 

1. EMV technology

EMV chip technology is becoming the global standard for credit card and debit card payments as it plays a big part in reducing credit card fraud that results from criminals using counterfeit, lost or stolen cards. 

With this chip technology, credit cards are inserted into the credit card terminal instead of swiped. Upon approval of the transaction, you will be requested to sign on the charge slips to complete the purchase transaction. If the terminal being used does not have a slot for a smart chip, your credit card may still be swiped.

In some countries, this type of card will require a pin instead of a signature, making it more difficult for criminals or thieves from using your card for any purchases. 

2. A one-time pin (OTP)

This is one of the major security features that come with EMV chip credit cards. Not only will it prevent your card from being cloned, but it will also require authentication of your online transaction before any payment goes through.  

When you make a purchase online, a one -time pin (OTP) will be sent to the registered number for authentication. The OTP is needed to complete payments made online, and each transaction will generate a unique OTP which you need to input on the payment gateway page.

3. Two-way SMS

A feature that sends an SMS whenever a transaction is made with your credit card. It will contain the amount of purchase, the date and time, and your credit card’s last 4 digits.  Usually, the SMS will ask you to reply “1” if the transaction was made by you or “2” if the transaction was not made by you. Not only will this let you keep track of your spending, but also immediately notify you of any unauthorized transaction.

4. Credit card protection insurance

This serves as a form of insurance for credit card holders that will reimburse the amount of the unauthorized purchases or charges due to card loss or identity theft. All credit cardholders are entitled to this and the typical coverage are as follows:

  • Up to ₱200,000 annual coverage per card in case of unauthorized transactions arising from card loss with ₱40,000 claim limit per unauthorized transaction.
    For your information
    The unauthorized transaction should occur within 48 hours prior to reporting to your bank for the transaction to be covered.
  • Up to ₱200,000 annual coverage per card in case of fraudulent transactions due to identity theft with ₱40,000 claim limit per unauthorized transaction.
    For your information
    The identity theft incident must be reported within 30 days from the statement date for the transaction to be covered.

If you’re a victim of credit card fraud, contact your bank immediately in order to get ahead of the thief or criminal using your card before they incur any or more damage. With more technology at our disposal, it also means more opportunities for thieves to steal credit card information from unsuspecting victims so a credit card with top-of-the-line security features is what every smart consumer needs to help manage their personal finances daily.

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