What is credit card theft?
Credit card theft is a widespread problem and happens in a variety of ways. In the past, thieves would most frequently steal credit card statements from cardholders’ mailboxes. They would then use the credit card numbers to run up charges or to make unauthorized withdrawals. Even the best credit card is compromisable.
According to the Insurance Information Institute, an estimated 16.7 million people and businesses fall victim to card fraud every year.
What are the most common types of credit card fraud?
Since the introduction of EMV chipped cards, the primary method of credit card fraud has changed. The principal way in which thieves commit fraud is to open new accounts in the names of their victims.
Thieves may purchase identifying information from the dark web and use it to apply for credit cards. They then either run up the balances on the cards that they receive or use them to withdraw money up to the credit limit.
Other standard methods of credit card theft include stealing transaction data from online transactions and then using the stolen credit card numbers and CVV codes to make purchases online. Thieves also continue to use card skimmers to take data from cards when swiped at non-EMV enabled card terminals such as at gasoline pumps.
How do people commit credit card theft?
Some of the other ways that thieves commit card fraud and theft might include the following:
- Installing card skimmers on ATMs to steal the card data from the magnetic strips
- Opening credit cards in the names of other people
- Stealing the physical credit cards
- Store employees copying receipts to steal the credit card numbers
- Hackers stealing card information when an online transaction goes through
- Taking over the credit card accounts
- Phishing schemes
- Repeated billing
- employee credit card theft
- Credit card identity theft
How likely are you to have your credit card information stolen?
Credit card theft statistics are frightening. In the U.S., 46 percent of Americans report that they have been the victims of card fraud in the past five years. Of the estimated 17.6 million identity theft victims in the U.S. each year, 86 percent report that they are the victims of card theft or fraud.
You have a relatively strong likelihood that you will have your credit card information stolen at some point in time. There are some kinds of credit card theft protection that you can implement to lessen your risks. If you learn that someone stole your credit card information, it is vital for you to act quickly to minimize your losses.
What are the signs that you are a victim of credit card theft?
There are many warning signs that you might be the victim of credit card fraud, including the following:
- Strange accounts on your credit reports
- Unexpected charges on your credit card bills
- Card statements stop arriving in your mail
- Credit card is unexpectedly frozen
- You receive credit cards that you did not apply for
- Someone denies your application for credit without explanation
- You get notified of a request for credit is rejected when you haven’t asked for one
- Your passwords and other information change and you didn’t change them
- Debt collectors begin trying to collect debts from you that you did not incur
A few ways that you can catch card fraud early so that you can minimize the damage, including the following:
- Check your credit card account frequently for unauthorized charges
- Sign up for a credit monitoring service
- Set up online alerts for when your information has is changed, or someone has submitted a credit application in your name
- Monitor your accounts online instead of waiting for your statements to catch card fraud earlier
- Avoid responding to offers that seem too good to be true
What should you do if you think you are a victim of card fraud?
There are several steps for credit card theft protection that you can take if you believe that you have been the victim of credit card fraud. If you discover the signs that you are the victim of card theft or fraud, you should do the following:
- Call the credit card company immediately
- Change your pins and online passwords
- Monitor your accounts closely and consider placing security alerts on your credit reports
- Get copies of your credit reports from the big three credit reporting agencies, including Experian, TransUnion, and Equifax
- Contact any companies listed as your creditors for accounts that you did not open, and notify them of the fraud
- Report the theft to the police and the Federal Trade Commission
Is it considered credit card fraud if you lend your card to someone?
It is not against the law to lend your credit card to someone else or to borrow another person’s credit card with permission. However, it is not a good idea to either give your card to another person or to borrow someone else’s card.
If you loan your card to a friend or family member, he or she may use it to spend more money than you authorized. Convincing your card company that your friend or family member paid more than you agreed can be difficult, and you may be stuck with the charges. If you borrow someone else’s card, you run the risk that the person will claim that you stole it and made unauthorized purchases. It is best to avoid both of these scenarios.
Credit card theft protection
Implementing tools with methods for credit card theft protection can help you to prevent yourself from becoming a victim of card fraud in the first place. Using techniques for card theft protection requires you to know how credit card thieves work and how to catch card theft.
What are some standard techniques used by credit card thieves?
Today, cards with chips are nearly ubiquitous. There are EMV chip and pin cards used at EMV chip-enabled card terminals. You might also have seen people with chipped cards who can wave the cards in front of the terminals for the information to be read.
These contactless cards contain RFID chips. RFID chips emit a radio frequency that can be read by the terminals. There are RFID chip readers that thieves can use by getting the reader within a centimeter or two away from the cards. Thieves may be able to secretly touch the outside of a pocket or a wallet to read the information from RFID cards and to commit RFID credit card theft.
While it is possible for thieves to steal your information in this way, it is unknown how frequently it occurs. If you are concerned about RFID card theft, you can carry your card in an RFID-blocking wallet. The wallet blocks the radio signal so that no one can read it.
Can you get your money back from credit card theft?
If someone stole your credit card number or credit card, it is possible for you to get most of your money back. In some cases, you may be liable for $50 of the unauthorized charges. However, most banks will reduce your liability to zero.
If you notice unauthorized charges on your credit card statement, you must notify your credit card issuer no later than 60 days after issuing the statement to you. After you report the suspected fraud, the card issuer or bank has 30 days to respond. It can then investigate the charges, and the investigation process can take up to 90 days.
While you are waiting for the investigation to conclude, you will still be responsible for paying your credit card bill for the valid charges. If your bank or card issuer determines that the charges were not fraudulent, you will be responsible for repaying them as well.
How can you protect yourself from credit card theft?
The simplest way that you can enjoy credit card theft protection is to protect your card numbers. You can have credit card theft protection by taking the following steps:
- Only carry the card or cards that you will use during a day
- Keep your card in a wallet or small purse close to your body
- Leave credit cards that you will not be using at home
- Avoid leaving your card sitting out for long, and shield it with your body so no one can photograph it
- Put your credit card back in your wallet or purse immediately after you make a purchase
- Shred documents and statements with your credit card numbers on them and don’t throw them in the trash
- Draw lines through blank lines on credit card receipts
- Do not give your credit card number to solicitors who call you
- Do not click on links in emails that appear to be from your bank or credit card company
- Only enter your card numbers on secure online websites
- Report missing cards immediately
- Choose strong passwords and change them regularly
- Check for card skimmers at gasoline pumps and ATMs
Do police investigate credit card theft?
The police will investigate reports of card theft, including business credit card theft and business debit card theft. You must first file a police report before the police will begin investigating card theft.
A police investigation into allegations of card fraud can be lengthy. They can be lengthy because the state must have probable cause to believe that a crime has been committed before making an arrest. After charging someone, the prosecutor’s office will continue investigating because it will have the burden to prove that the defendant committed the crime beyond a reasonable doubt.
Both federal and state laws may apply to an incident of card fraud. If the amount is small, the prosecution is likely to stay in state court. When the amount involved was large and the fraud was committed in a manner that implicated interstate commerce, the offense becomes prosecutable in federal court.
How long do you go to jail for credit card theft?
If you commit credit card fraud, the sentence that you might face upon a conviction will depend on several factors. The punishment for card theft varies from state to state because credit card theft laws differ by state.
Some states treat card fraud as a misdemeanor offense if the amount is relatively small. In others, card fraud is treated as a felony offense regardless of the amount that was involved.
A first-time offense credit card theft prosecuted as a misdemeanor may result in minimal jail sentences, fines, probation, and restitution. Those prosecuted as felony offenses could result in prison sentences of multiple years. Finally, the potential punishment for credit card theft in federal court may be more severe.
Business cards and card fraud
Card theft is not just a problem for consumers. Businesses are also frequent victims of credit card fraud. In addition to the other examples of credit card fraud previously described, companies may also be the victims of employee card theft.
The problem of business credit card theft
Businesses may be the victims of both internal and external fraud schemes. Employee credit card theft may occur when an employee has access to the company’s card and uses it to make unauthorized purchases or to access funds from the credit line. According to a study by Hiscox, 10.7 percent of business fraud schemes involve employee credit card theft and fraud.
In addition to employee credit card theft, businesses must also guard against external fraud schemes. They must protect themselves from people who are attempting to make fraudulent purchases with other people’s cards as well as to prevent scammers from gaining access to their business credit card data.
Business credit cards vs. business debit cards
Business credit cards and business debit cards both have their pros and cons. A business credit card may give businesses access to funds when they do not have the money available to pay for necessary purchases in full. They can pay for the investments in installments over time, but they assess interest.
Business debit cards have the advantage of not increasing a business’s debt. A transaction completed with the card is subtracted from the business’s existing funds so that the business owners may have better control over their budgets.
Business debit card theft
Business debit card theft is also a real problem. Businesses need to understand their risks and take steps to mitigate them. Companies can use a fraud calculator to understand the areas of risk that they have.
After using the fraud calculator, businesses can then take steps to protect their credit and debit card information. Also, the calculator might reveal other areas that need to be addressed to defend against the various credit card fraud techniques.
What are the pros and cons of business credit vs. business debit cards from a security standpoint?
In general, the best credit cards are more secure than debit cards because different laws apply. When a credit card is used to make unauthorized purchases, the credit card company must work to get its own money back. By contrast, when your debit card is stolen or compromised, you will be put in the position of fighting to get your own money back.
Business debit cards may have some additional features to help to prevent fraud, however. Some business debit cards allow business owners to restrict how much money is available on each card. Business owners may also be able to set total transaction limits by the day or to limit their use to single purchases. Some cards can also use merchant category codes to restrict card usage to certain types of transactions or preferred vendors. These features might help to prevent fraud from occurring in the first place.
Employee credit card theft and how to handle it
If you discover that your business has been the victim of employee credit card theft, you should take a few steps. Talk to the employee to get his or her story. Immediately turn off his or her card.
Gather your records, and don’t hesitate to file a police report. If you do not make a report, you will be unlikely to recover the money stolen from you. Contact your bank immediately to report the theft, and follow through with anything that you are asked to do.
The benefits of business Visa® debit cards
The Bento for Business Visa® debit cards come with a variety of features that make them an excellent choice for controlling expenses and preventing fraud. The company focuses on providing solutions to businesses of all sizes so that they can track their expenses, control how employees spend their money and help prevent unauthorized purchases and other types of fraud.
The cards come with built-in features that business owners can use to restrict the use of the cards by when they work, where they can are useable, how much is spendable in total, by the day, and the categories of purchases that are allowed. Business owners can turn individual cards off or on instantly from their smartphones at any time without having to worry about retrieving the cards or going through the card issuer.
Bento has earned top reviews from leading business publications such as the Wall Street Journal and Forbes. The company has also received hundreds of favorable reviews from its customers on third-party review sites such as TrustPilot and Capterra.
Bento for Business Visa® debit cards give you access to a single platform you can use for managing business spending and fraud prevention. The cards are designed to work for all different kinds of business. To learn more, contact us today by calling 866-220-8455. You can also sign up now to begin your 60-day free trial.