Preventing credit card fraud – everything you need to know

In line with the growing popularity of cashless payments, the rate of credit card fraud has also increased in the UK. In the last quarter of 2021 alone, the rate rose 42%, reaching a five-year high. Expectations are that this number will continue to grow.

Luckily, there are some preventative measures anyone can take to ensure their bank account stays safe from fraudsters.

To help you protect your funds, we’ve compiled everything you need to know to avoid falling foul of credit card fraud in this blog post.

What is credit card fraud?

Credit card fraud refers to any type of fraudulent activity involving a credit card. Most bank policies, as well as federal law, guarantee little to no liability for a person whose card details have been stolen. Nonetheless, victims go through a series of troubles, from discovering and reporting the fraud to worrying about their money and waiting for a replacement card. In some cases, it can even affect a person’s credit report.

Crimes related to credit cards can be divided into several areas:

• Making purchases using the lost/stolen credit card
• Selling personal and bank details to another party
• Making ‘card-not-present’ transactions
• Cloning the credit card with a special swipe machine
• Applying for another payment card without the owner’s knowledge

How credit card fraud can happen

Fraudsters can be very cunning and resourceful in their attempts to steal sensitive information. Most common methods of committing credit card fraud include:

• Skimming: Fraudsters can create a duplicate, or the so-called cloning, of your payment card either by stealing your card number or using a special skimming machine. Such devices can be attached to ATMs, most often unattended ones.

• Phishing: This is the act of tricking card owners into revealing personal information and card details. This can happen through emails, texts, phone calls, and postal mail, which are made to look like they are coming from reputable organisations. Avoiding phishing attacks can be easier than you might think – make sure to familiarise yourself with different tricks that will help you acknowledge potential attacks.

• Website spoofing: Another scamming method involves the creation of fake banking websites. They are specifically designed to mislead visitors into believing that the page is legitimate and enter sensitive information, which will then be stolen.

Ways to prevent credit card fraud

While anyone can fall victim to fraudsters, there are a few things you can implement in your daily life to increase the chance of protecting yourself and your funds.

To help you out, below we’ve put together a few important credit card fraud protection measures to keep in mind.

Never leave your card out of your sight

Look after your credit card at all times. Don’t trust it to other people and don’t leave it in a visible place, because you never know where malicious people may be lurking, waiting for the opportunity to steal your card or its details.

Keep your PIN and passwords secretive

Don’t share your PIN with anyone, don’t keep it written on your phone, computer or in your wallet, and make sure you are not using an easy-to-guess PIN, such as the date of your birth. The same goes for your passwords.

Be cautious of scam emails and calls

Always double-check if the organisation that has contacted you is legitimate. Pay attention to any typos in the name of the company or suspicious attachments to an email. Banks and payment service providers would never ask you to share your PIN, especially over the phone or an email.

Destroy old cards and documents with sensitive information

Use a special confidential bin or a shredder to destroy letters, statements, cash machine receipts and any documents that contain personal information. When you need to dispose of an old card, cut through its chip and magnetic strip before throwing it away.

Be careful when using cash machines

Fraudsters can attach skimming devices or hidden cameras to ATMs, so avoid using cash machines that are unattended or that appear to be tampered with. Also, make sure to shield your PIN with your free hand or your wallet while entering it to prevent prying eyes from seeing it.

How to know you are a credit card fraud victim

Detecting credit card fraud at a very early stage is of significant importance to avoid any damage to your funds and credit report. Here are the signs to watch out for:

• Your card is declined when you try to make a purchase
• You receive a notification from your bank that you have exceeded your card limit
• Your bank statement shows purchases you don’t remember making
• You are not receiving mail that you should be
• The credit reporting agency you use informs you that a card application has been submitted on your behalf

Pro tip: Set up your mobile phone to receive alerts every time a payment is made with your card. This way, you will be able to immediately detect a fraudulent purchase and contact your bank.

Reporting credit card fraud in the UK

If you believe that you are a victim of credit card fraud, notify your bank immediately. You must act as quickly as possible to ensure that you are not held liable for the fraudulent activity and that you receive a reimbursement for any payments and charges that you did not initiate.

Additionally, change your PIN and passwords as soon as possible. Fraudsters can use your stolen card details to access more of your information and hack into other accounts of yours.

You can also report the crime to Action Fraud by visiting their website or calling 0300 123 2040. If you want to check whether someone has applied for a credit card on your behalf, use credit reference agencies, such as Equifax, TransUnion and Experian. In case you have been contacted by an illegitimate firm or individual attempting to initiate a financial fraud, report it to the Financial Conduct Authority (FCA).

Punishment for credit card fraud

The sentence for credit card scams can vary, depending on the severity of the crime and the consequences. This is because each case is regarded independently. A typical case that goes to court and ends in a conviction can result in 4 to 5 years of prison time. The factors taken into account by the court to determine the sentence include previous convictions, the degree of genuine remorse of the defendant and their level of willingness to cooperate with the investigation.

Additional restrictions and requirements, known as ancillary orders, can also be added to the sentence. Ancillary orders can include restraint orders, compensation for loss, freezing of assets and preventing application for credits, mortgages and loans. Partial payment of investigation costs can also be sought from the defendant.

Conclusion

Taking advantage of modern technology, fraudsters have become more creative than ever, resulting in an increasing rate of scams related to credit cards. If you fall victim to such fraud, usually you qualify for zero liability, but you need to contact your payment service provider as soon as you notice any suspicious activity in your bank account.

To avoid having your personal and bank details stolen in the first place always keep your payment cards in your sight, don’t share your PIN with anyone, monitor your financial statements regularly and stay alert for phishing emails and calls.

Disclaimer: Please be aware that the contents of this article and the myPOS Blog, in general, should not be interpreted as legal, monetary, tax, or any other kind of professional advice. You should always seek to consult with a professional before taking action, since the particulars of your situation may materially differ from other cases.