Credit card fraud is big business for crooks. In 2021, the Federal Trade Commission (FTC) documented nearly 400,000 reports of credit card fraud, similar to the year prior, which saw a steep 45% increase from 2019.
The same data also revealed that credit card fraud was the number one form of identity theft in 2021. Credit card fraud can look like a criminal obtaining your card details and making unauthorized purchases, or worse, getting a hold of your personal information and opening accounts in your name.
These alarming statistics beg the important question: how can you protect yourself against credit card fraud? In this guide, we’ll review the ins and outs of credit card fraud protection so you can feel confident in your financial security.
Credit Card Fraud: Minimizing Your Risk
Although the chances of falling victim to credit card fraud always exist, you can significantly reduce your risk by having a plan and taking preventative measures.
Enable Transaction Alerts
Many financial institutions offer real-time alerts for transactions in addition to monthly statements. According to a 2021 study conducted by Security.org, 81% of credit card fraud victims without transaction notifications had to take additional steps to reconcile fraudulent charges. On the other hand, only 19% of victims with transactions enabled had to take these same supplemental measures.
In less than an hour, a fraudster can get a hold of your info and make dozens of transactions. By enabling transaction alerts, your financial institution can notify you immediately if one of your cards is used to make a purchase above your pre-specified threshold. You can also turn on alerts for international purchases or other types of unusual activity.
Sign Up For A Credit Monitoring Service
Credit monitoring services actively monitor your credit reports, making it easier to spot suspicious activity on your credit profile. These services will alert you to changes in your credit profile, allowing you to take action quickly if there is an issue. Most credit monitoring services offer paid subscription plans, however, some banks offer free credit monitoring within their platform.
The three major credit bureaus are Equifax, Experian, and TransUnion. Those who have previously fallen victim to identity theft or are otherwise at higher risk of credit card fraud should consider a service that monitors all three major bureaus.
Consider Freezing Your Credit
By placing a freeze on your credit, you can stop anyone (including yourself) from opening a credit account in your name. A credit freeze is an excellent practice if you have no intentions of opening a new credit card in the near future. You can temporarily remove the credit freeze at any time if you’d like to apply for a new card, loan, or other credit.
To freeze your credit, you’ll need to contact Equifax, Experian, and TransUnion.
Do Credit Cards Have Fraud Protection?
All credit cards provide fraud protection limiting consumer liability. Under the Fair Credit Billing Act (FCBA), consumers are protected against credit card fraud and can only be held liable for a maximum of $50 as long as they’ve reported the incident in a timely manner. However, many consumer card issuers provide zero-liability protection against fraudulent charges, meaning the consumer is not responsible for any unauthorized charges as long as they took reasonable care to protect their card.
What Does Credit Card Fraud Protection Look Like?
Credit card companies offer preliminary fraud prevention measures such as card locks, EMV chips, contactless cards, and algorithms blocking transactions outside of your typical spending habits.
Within online banking portals, features like automatic logout, multi-factor authentication, and SSL encryption are implemented. However, federal law still protects consumers if the fraudster is able to circumvent these systems.
Finding the Best Credit Card With Fraud Protection
The best credit card with fraud protection will promise $0 liability coverage. Many major credit card issuers offer this level of security and even those that don’t still cap your liability at $50.
It’s a good idea to look for a credit card with a seamless online banking portal, preferably a mobile app for on-the-go access. This way, you can quickly freeze your account if you notice something suspicious.
Other issuers offer credit monitoring services within their platform. It would be best to look for an issuer that allows you to track your credit through an app or, even better, notify you immediately of any changes.
After reporting fraud on your credit card, the card issuer is obligated acknowledge your claim within 30 days, and must fully resolve it within 90 days. When researching the best credit card with fraud protection, you should find out the average resolution time for fraud claims, as some banks can take up to the full 90 days to replace lost funds. You may want to choose an issuer that’s historically resolved fraud claims quickly.
Business Credit Card Fraud Protection: Is Your Business at Risk?
According to the 2022 AFP® Payments Fraud and Control Survey, 71% of organizations fell victim to payments fraud attempts and attacks in 2021. After a jump in payments fraud across businesses nationwide in 2020, some blamed the pandemic for the elevated nefarious activity, as pushing employees to work remotely may have opened some gaps in payment security.
CEO fraud, also known as Business Email Compromise (BEC), or CEO fraud phishing, is a popular type of fraud that utilizes social engineering to target corporations. Fraudsters will target employees via phishing emails in an attempt to defraud the company. They will often elicit account numbers, credit card details, or other confidential information to access a business’s finances.
Regardless of the cause or risk of payments fraud on a business, it’s essential to take preventative action against financial attacks. If you’re a business owner, you know how easy it can be to get caught up in the hustle and bustle and overlook some details. Without proper attention to your security practices, you put your business’ finances at risk.
When it comes to business credit card fraud protection, you should consider everything at risk—relationships with vendors, the trust you’ve worked hard to build with your clients, and the funds needed to operate your business smoothly.
How to Protect Your Business From Credit Card Fraud
- Regularly review statements and set up alerts if it’s reasonable
- Store card details in a secure location
- Be wary of doing business with unreputable sources
- Limit access to a few trusted members of your staff
- Safely store and share passwords (applications like 1Password can help you with both)
How Can You Protect Yourself Against Credit Card Fraud While Shopping Online?
With a massive shift toward e-commerce in recent years, and especially exacerbated by the pandemic in 2020, online credit card fraud is more of a growing concern than ever. By adhering to these best practices, you can protect yourself and your loved ones while making purchases online.
Authenticate Deals From Targeted Ads
If a targeted ad has done its job, it will direct you to a website you may not recognize. When you don’t recognize the business, it’s time to do your due diligence and verify its legitimacy. Knowing when a deal is “too good to be true” can save you from a lot of headaches. Don’t allow yourself to get so wrapped up in a great deal that you look past apparent inconsistencies.
We recommend doing a quick search of the brand name + “scam” to see what other consumers are saying about the company, if anything.
Use Privacy Virtual Cards
Privacy Virtual Cards offer a layer of protection between your sensitive information and the retailers you shop with. Rather than using your credit card, consider generating Virtual Card numbers by linking your checking account or debit card directly to Privacy.
Privacy was developed with online payment security in mind. Each card number you generate locks to the first merchant its used with. So, if your card details happen to be compromised through a merchant’s systems, any attempts to run it at another retailer will automatically decline. You can also pause, unpause, or close a Privacy Virtual Card at any time.
For retailers you never plan to transact with again, you can create Single-Use Cards that close after the first use. This way, that merchant (or any other merchant) can never authorize your card again.
Don’t Save Payment Methods to Retail Websites
We know how handy that “remember” your card number option can be when checking out on a website, but it’s not necessarily secure. Allowing online retailers to save your card details upon checkout can increase your risk of credit card fraud.
If a merchant’s systems become compromised, your card details may become exposed to criminals. There’s also the possibility of your account being taken over. Now would also be a good time to ensure you’re using strong, unique passwords as well as two-factor authentication when possible.
Connect Safely - When Utilizing Public WiFi
For many, connecting to a public WiFi network is done without a second thought. However, it can easily pose dangers to consumers. Fraudsters can easily penetrate even password-protected networks. Here are some helpful WiFi guidelines.
How to Protect Yourself on Public WiFi
- Ensure the online retailers you’re visiting use HTTPS
- Use a VPN to tunnel your data through an alternate server
- Avoid using public WiFi to shop online or switch to mobile data if you must enter sensitive data
- Disable automatic WiFi connectivity on your device
The Reality of Credit Card Fraud
The unfortunate reality is that every consumer is vulnerable to credit card fraud. Social engineering, the dark web, and card skimming are just a few tools used by fraudsters to commit these crimes.
After reviewing this guide and asking yourself, how can you protect yourself against credit card fraud?—you should have a better understanding of where you stand and what areas you can improve upon. Your accounts may never be foolproof from attacks, but you can take preventative action to protect your finances. And if all else fails, you are guarded to a large extent under federal law.