What is Credit Fraud?
Credit card fraud takes many forms, but only a few are commonly known to the public. Understanding these fraud types can help you avoid becoming a victim.
Fraud via Identity Theft
Identity theft is when someone fraudulently uses another person’s identifying information to purchase goods and services on credit.
Credit Card Fraud
This occurs when someone uses your credit card without authorization to make purchases, and the bank does not own the charge, meaning the criminal is taking advantage of your financial resources.
How Criminals Steal Your Data
Below are several methods criminals use to access your personal information:
- Lost or Stolen Cards:
If you lose your card or forget where you placed it, someone else might find it and use it for fraudulent purchases. - Theft of Mail Pieces:
Criminals may illegally access personal mail to retrieve sensitive information. - Shoulder Surfing:
Criminals stand behind you as you enter personal information, such as PINs or passwords, to collect the data. - Garbage Digging:
Criminals may go through trash to find personal information or documents that can help them steal your identity. - Scam Emails:
Fraudulent emails (also known as SPAM) can be used to gather information about you or directly steal your data. - Fake Phone Calls:
Fraudulent calls made to collect personal information, such as account numbers or passwords. - Personnel Record Access:
Accessing company staff records to gather confidential information for fraudulent activities.
The Signs of Credit Fraud
Here are a few signs that may indicate you are a victim of credit card fraud:
- Mysterious Accounts:
Unauthorized credit inquiries or new accounts appearing on your credit report. - Unexpected Transactions:
Transactions for items you don’t recognize, showing up in your credit statements. - Strange Bills:
Bills from unfamiliar companies or individuals. - Debt Collection Calls:
Calls from creditors or collection agencies that are unfamiliar to you.
How to Deal with a Credit Fraud Situation
If you suspect you’re a victim of credit fraud, follow these immediate steps:
- Take Action:
Place a 90-day fraud alert on your credit file. This alert serves as a warning to credit companies that fraud may have occurred. This is typically followed by an investigation period. - Contact Your Creditors:
If someone has opened accounts in your name without your consent, contact the affected companies or financial institutions directly. - Document Everything:
Keep detailed records of every interaction with creditors, including names, departments, phone numbers, and dates. - Understand the Process:
Different creditors have different processes for handling fraud claims. Make sure you understand the required steps and ask for proof that the debt is not yours. - Follow-up:
Ensure that all requested documentation and evidence has been received and follow up with calls or letters to verify. - Review Your Reports Regularly:
Even after resolving the issue, continue checking your credit reports every few months to ensure no further fraud has occurred. At least review them once a year. - Keep Records:
Keep all letters and notes organized and accessible for future reference. - Police Report:
If you have substantial evidence of fraud, consider making an official police report. This can help if you need to file a complaint or pursue legal action.
Remain Watchful!
Credit fraud is a serious issue, but with proactive measures, you can protect yourself from its devastating effects. Stay vigilant and monitor your accounts, keeping an eye on any suspicious activity. Educate yourself about how fraud works, and always act quickly if you suspect you’re a victim.
