Financial fraud is becoming an increasingly pressing problem and over the last couple of years we have seen more and more cases coming to light. Hackers have been able to steal the financial identities of millions of innocent people. But the large majority of frauds happen through human error and, in most cases, the card holder has been tricked or misled into using the card somewhere they shouldn’t or handing over card details by mistake. It’s important to know how to protect against this, and that using your card provides an additional degree of protection that you won’t have if you pay in a different way.
What is Card fraud?
Essentially, card fraud is any instance when your card has been used by someone else without your permission. The purpose of the fraud could be to either obtain goods or services without paying for them or to get hold of funds from an account. Common causes of card fraud include:
Phishing – where you are sent an email from a hacker that includes a link to a malicious website, to malware that will send certain information from your machine on to a hacker. Phishing emails may also request account details and passwords that give a cyber criminal access to your account and may be so convincing that they appear to be from your bank or credit card company.
Restaurants and shops – your card payment is taken out of your line of sight and the card is passed through a modified reader that collects the card data.
ATMs – a card skimmer is installed over the cash point that sends data via Bluetooth (or simply collects it) to a nearby laptop.
Between January and June 2014, fraud losses on cards in the UK totalled £247.6 million, which was a rise of 15% on the year before. Hacking and scamming is big business for cyber criminals and as we put more and more of our information into the digital world we become ever more vulnerable. So, what can you do?
How to Protect Yourself
There are a few basic steps that everyone can take to help protect against credit card fraud:
Don’t use public computers. It’s easy enough to log into a site online in a shared computer space and then simply forget to log out – this is the easiest way to get caught out.
Monitor your accounts. Check your bank statements, look out for transactions you don’t recognise and set up fraud protection and alerts so that you can take action as quickly as possible if something unusual occurs. And keep an eye on your credit file.
Don’t respond to emails. Emails asking for your personal details, that is. Most banks and financial organisations simply won’t send you an email requesting details and you can always check the true sender by hovering the cursor over the email sender address – it may say “HSBC” but the cursor may reveal something far more suspicious.
If it seems to good to be true, it probably is. If you’re told you’ve won a sum of money, a prize or a holiday and all you have to do is provide your bank details to get it then be very suspicious indeed. Luck is one thing but if you didn’t enter a lottery draw/competition/prize giving then there’s no way you could have won.
And finally, use your cards. When you use a card (debit or credit), rather than cash or a cheque, you are protected against fraud and if it happens to you then you will not suffer any financial loss as a result. So, if you have used your card in an ATM machine that you didn’t realise was skimming card details then you will benefit from fraud protection. The only caveat is if you have acted fraudulently or without reasonable care – for example giving your PIN to someone else – in which case the protection won’t apply. It’s a relatively easy and stress free process to make use of this fraud protection:
Contact your card issuer and let them know what has happened. It will then be up to them to call the police, not you.
Your card issuer will then most likely stop your card so that it cannot be used further and will investigate the fraudulent transactions.
You will be sent a new card with different details and the money or credit that you have lost will be returned to your account.
The scammer who took your card will have to throw the useless plastic away as it no longer provides them with any funds.
Are you a Victim? Then Report It
If you do become the victim of card fraud then you should also consider reporting it to ActionFraud. In a previous blog post we went into detail about how to do this. By reporting your incident you not only help yourself but you help the authorities clamp down on the problem that could affect others.
Alex Hartley is a keen advocate of improving personal finance skills. She's worked at Solution Loans since 2014 and written hundreds of articles about how people can manage their money better. Her interest in personal finance goes way back to...Read more about Alex Hartley