Summary: Understanding the differences between credit and identity theft is confusing. Credit card theft can be isolated events, or it can be the first sign of identity theft. Spotting the difference early will save you money and headaches later. This article will answer questions like what is credit card fraud? But we go a step further to teach you how to prevent identity theft.
Identity Theft vs Credit Card Theft—How Are They Different?
Differences in identity theft vs credit card theft can be hard to discern but they are not the same. They are both forms of data theft, but identity theft is far more serious and difficult to handle than credit card fraud.
So, what is credit card fraud? It is what happens when someone steals your card or credit card number. One second you are at the bank withdrawing money, the next you are at home frantically searching for your card, while a thief is out buying laptops and other electronics with it. This is a type of identity theft, but should not be confused with full-blown identity theft, which involves much more than fraudulent charges. According to a Bureau of Justice Statistics report, as many as 8.6 million Americans ages 16 or older were victims of credit card fraud in 2015. If the thief at the electronic store stole your identity completely, not only could he go on a shopping spree, he could open new accounts in your name, receive medical care while pretending to be you, get a job as you, or even mar your criminal record.
How to Prevent Credit Card Theft
Wonder how to get away with credit card fraud? It happens when you make seemingly innocent mistakes. To prevent becoming a victim of credit card frauds, what to do is this:
- Do not share credit card information with anyone: It seems self-explanatory, but it’s necessary to reiterate. Do not share credit card information with friends or family. Even if they are trustworthy, you never know what they accidently leave behind for a stranger to pick up.
- Regularly check your credit card reports: Check these carefully and regularly, and watch for any drastic charges in score or unauthorized purchases. We explain how to do this below.
- Strongly secure accounts: Passwords are your first line of defense against fraudulent activity. To ensure that they are as strong as possible, use capital and lower-case letters, numbers and symbols. To keep your passwords in order, use a password manager. Additionally, use two-factor authentication whenever possible. It creates a second wall of protection on certain accounts, so they’re harder to access with a password alone.
- Know who you give your information to: When sharing your credit card information online, it is important to know who you are giving it to. One of the most common ways to become a victim of credit card theft is through unverified, insecure payments online. Make sure the website you are visiting is secure before inputting payment information. This information is often found in the top left corner of your browser’s address bar.
Don’t become a victim and then start wondering, what is credit card fraud? Actively take steps to prevent it.
How to Prevent Identity Theft
Here are four key points you need to know if you want to remain abreast as to how to prevent identity theft:
- Shred documents: Shred personal documents before discarding them, even junk mail from credit card companies. A paper shredder that cross-cuts documents into pieces is better than one that shreds paper into strips that can be taped back together.
- Use protective software: Use anti-virus software on your computer and make sure it is consistently updated to prevent attacks. Don’t download anything from an unknown or untrustworthy source.
- Do not give personal information via e–mail: Legitimate companies will not ask for personal information over e-mail. Do not send information via e-mail to anyone you don’t know. If an e-mail seems suspicious, contact the company in question.
- Erase old devices: Erase your personal information from old computers and cell phones when you get a new one. You never know where a device will end up when you discard it, or who will have access to any information left behind. Reformat and clean hard drives.
How to Recover from Credit Card Theft
If you are a victim of credit card frauds, what to do is this:
- Call up the credit card company. Explain that there is fraudulent activity on your account and which charges are unauthorized. By law, you can only be responsible for up to $50 of fraudulent charges on a credit card account. Debit accounts may be different, so make sure you report suspicious activity in a timely manner once you discover it.
- Make sure you are issued a new card. A new card should be issued to you. Make sure you reset all passwords, login IDs and PINS associated with your account.
How to Recover from Identity Theft
If you’re a victim of identity theft, immediately follow these steps:
- Call companies to inform them of fraudulence. Ask them to freeze your accounts and change your login information, passwords and PINS.
- Place a free fraud alert and get your credit reports. Contact either Experian, TransUnion or Equifax to do this. Whichever company you choose will tell the other two. This alert makes it harder to open an account in your name, and requires your identity be verified before a card is issued.
- Report the theft to the Federal Trade Commission (FTC.) You can report identity theft to the FTC by phone or online. Based on the information you provide an Identity Theft Report Recovery Plan will be created for you.
- File a report with your local police department. When you have your FTC Identity Theft Report, take it to the local police department with a valid photo ID, proof of your address and proof of the theft (IRS notices or bills etc.) to file a police report. Be sure to ask for a copy of the report as you may need it in the future!
- Close new accounts. When you have the FTC report, close new accounts and explain that your identity has been stolen. Ask for a letter to confirm that you are not responsible for the fraudulent charges and they have been removed from your credit report. Keep this letter!
- Remove fraudulent charges from other accounts. Call the fraud department of the companies responsible for your other accounts. Explain that your identity was stolen and tell them which charges are unauthorized. Ask them to clear these charges from your account and send a letter to confirm that they’ve done this. Keep a record of that call and letter when it comes!
- Write to each of the three bureaus mentioned above. Include a copy of your identity theft report and proof of your identity with your letter. Explain which information on your credit report is fraudulent and request that it be blocked, as is your right.
- Additional steps may need to be taken depending on the severity of the situation. Visit https://www.identitytheft.gov/Steps for more information.
Credit Card Fraud – Protection Services
Here is a list of ID theft protection services offering extensive coverage on credit card fraud:
ID Watchdog rovides advanced identity monitoring of millions of records, internet black market surveillance, email and SMS notifications when changes are detected, identity restoration services, credit report monitoring, and National Provider Identifier (NPI) alerts for healthcare providers. All of these services are available for $14.95/mo. To receive your credit report and score get a Platinum plan for $19.95/mo. This is our recommended service based on support/services offered and affordability.
IdentityForce provides customers with many different types of monitoring including Advanced Fraud Monitoring, Credit Report Monitoring, Identity Monitoring and more. It will alert you if there is a change of activity on your account that seems suspicious based on parameters determined by you, or when any other aspect of your identity is at risk through monitoring address changes and court records, among other things. IdentityForce gives you access to your credit report and score, and can help you remove your name from the most fraudulent marketing databases. If you are a victim of identity theft, they offer services like fully managed restoration so you experience minimal emotional distress. The UltraSecure plan is $17.95/mo. and includes a 14-day free trial. An UltraSeure plan with added credit monitoring is $23.95/mo.
IDShield provides customers with consultations from licensed private investigators to help you learn how to detect all types of fraud and keep yourself safe. They offer different types of monitoring like identity, credit, credit score and court records. You are alerted when suspicious activity occurs. In addition, they offer privacy monitoring that includes watching the use of your name, date of birth, e-mail addresses, social media accounts and more. They also watch global black market and P2P sharing sites. An individual plan is $9.95/mo. with the option to add legal, small business, and commercial driver services. Family plans start at $19.95/mo. for two adults and 1-8 children.
Dashlane is a password manager that offers additional features. It has an autofill feature to complete forms instantly, eliminating the need for you to store personal information in an unsecure browser. The password generator will create a strong, secure, unique password for each of your accounts without requiring you to remember it. The digital wallet is the best way to ensure that only you see your personal information. Dashlane saves your payment details, making online checkout a breeze. Security alerts on all your devices inform you if one of your accounts is compromised. Basic Dashlane is free but there are tiered plans that offer more features. One year is $39.99, three is $99.99 and five is $149.99.
Privacy Guard provides identity theft protection, identity fraud support services, credit card protection, credit reports and scores, and identity theft education. They offer a “trial” period of $1 a day for 14 days with the option to cancel, and then charge $19.99/mo. Pricing information and details about devices are not easily accessed on the website.
Even if a predator thinks they’ve figured out how to get away with credit card fraud, these companies are steps ahead. They’ve figured out how to prevent identity theft of all kinds.