Credit Card Fraud
An Educational Partnership of
Consumer Action and Chase
CONSUMER ACTION - Credit Card Fraud Training
www.consumer-action.org
©2009
Overview of Topics
•Recognizing types of Credit Card
Fraud
•Protecting yourself from fraud
•Steps to take when fraud strikes
•Resources & referrals
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Credit Card Fraud
• Unauthorized charges to your credit card
• Counterfeit cards
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Credit card fraud can occur
when
• cards are lost or stolen
• mail is diverted by criminals
• employees of a business steal customer
information
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Why does credit card fraud
matter?
• The Federal Trade Commission estimates
that 10 million people are victimized by
credit card theft each year
• Credit card companies lose close to $50
billion dollars per year because of fraud
• These costs “trickle down” in higher
interest rates and fees for all consumers
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The bottom line...
• All cardholders pay for credit card fraud
losses
– Victims spend time and money to repair
the damage
– Credit card issuers charge higher fees
and interest rates to cover their losses
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ID Theft
• Identity theft is the use of someone’s
personal information, such as their Social
Security number or date of birth, to commit
financial fraud
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ID thieves harm
victims by:
• using their names and other personal
information to open new credit accounts
• accessing existing credit and bank accounts to
make unauthorized purchases
• Victims of ID theft are not held liable for losses,
but it takes time and effort for victims to prove
fraud and clean up the chaos
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Forms of Fraud
• Dumpster Diving
– Stealing credit card information from
discarded receipts or account
statements in people’s trash
– Shred unwanted documents that contain
Social Security numbers, bank and
credit card information and other
sensitive financial information
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Skimming
• When dishonest employees make illegal
copies of credit or debit cards using a
“skimmer” device that captures credit card
numbers and other account information
– The stolen credit information is used to
make purchases by phone and internet,
or to make counterfeit cards
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Phishing
• Phishing is a financial crime that starts with
massive numbers of deceptive spam emails
– These e-mails look like they come from
your bank
– But they are just a trick to get account
numbers and passwords
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Security Codes
• Credit card companies use security codes
to help prevent unauthorized or fraudulent
use by phone and online
– These numbers help ensure that you
have the card — not just the account
number
• Merchants are prohibited from keeping or
storing any security codes after
transactions are completed
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Security Codes
•
•
Security codes for Visa,
MasterCard and Discover
cards are the 3 digits
located on the back of
the card in the signature
box.
Security codes for
American Express are 4
digits long, printed on the
front of the card above
the right side of the main
credit card number.
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New Cards
• For added protection, credit card issuers
ask you to call from home to activate new
credit cards
• As soon as you receive your new card,
sign the back of it with a permanent black
ink pen
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Should you write
“Ask for ID”?
• Writing “Ask for ID” in the signature space
may not be a good idea as your
transactions might not go through if the
card isn’t signed
• Consider signing your card and also writing
“Ask for ID”
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In case your card is lost or
stolen
• Record all your account numbers and
company contact information and keep the
record in a secure place
• That way you can easily find whom to call
to report the loss
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Protect your PIN
• Never write down your personal
identification number (PIN)
• Never give your PIN to anyone
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Protect your account numbers
• Never write your credit card number on post
cards or on the outside of envelopes
• Never provide your card number on the phone,
unless you know it’s a legitimate, reputable
business
• Never give your account number to anyone
who calls you on the phone or sends you an email
• If you let others use your card, you are
responsible for charges
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Billing Statements
• Review credit card statements closely on
the day they arrive
– Report any questionable charges to
your card issuer immediately
• A missing credit card statement may
indicate stolen mail
– Contact your card issuer right away if
your bill doesn’t arrive around the usual
date
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Online account access
• If you have a computer, consider signing
up for online account access
• This way you can track your account
activity between statements
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Liability
• Fraud victims are not generally required to
pay for unauthorized charges
• Victims may be liable for up to $50 of the
loss, depending on the circumstances
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Protect your wallet or purse
•
•
•
•
Keep a close eye on your belongings
Never carry all your credit cards
Bring only the 1 or 2 cards you might need
Carry your credit cards separate from your
wallet
• If your wallet or purse is lost or stolen, call
your credit card issuers immediately
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Watch your credit card
• Watch closely when store or restaurant
employees handle your card to make sure
they are not copying or “Skimming” your
credit card number
• After you make a purchase and your card
is handed back to you, make sure the card
is yours.
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Take precautions
• Notify your credit card company if you are
going to be traveling away from home to
prevent any inconvenience if your issuer
should block your account from being used
in a different city
• Notify your credit card company if you are
going to make any unusually large
purchases so that your account is not
flagged for possible fraud
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Safeguard your mail
• Notify the post office and your credit card
company immediately if you change your
address
• Lock your mailbox. Never leave mail in an
unlocked mail box or apartment building
lobby
• Put your return address on out-going mail
• Shred unwanted credit card solicitations
before discarding
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Internet Safeguards
• If you bank online, don’t use “automatic
sign on” for bank or credit card sites
• Avoid providing your credit card number to
websites offering “free access”
• Install a firewall in your computer to
prevent unauthorized access from hackers
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Reporting credit
card fraud
• To report credit card fraud
– Call your card company immediately
about
• Lost or stolen cards or PIN numbers
• Unauthorized charges on your statement
– Request a fraud affidavit
– Get a police report if necessary
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The Fair Credit Billing Act
• is a federal law that gives you the right to resolve
billing errors, including unauthorized charges
– If something goes wrong, you have the right to
dispute the charge
– To dispute billing errors on your statement,
contact your card issuer within 60 days from the
statement date or you lose your right to file a
dispute
• Note: There is no time limit for reporting fraudulent
charges.
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Disputing charges
• Always dispute billing errors in writing. You
can call your card company and follow up
with a letter.
– Describe the dispute in a few sentences
– Send it to the correct address for billing
disputes
– Do not include your dispute letter with
your bill payment
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Helpful resources
to know about
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Free Credit Reports
• Online:
www.annualcreditreport.com
• Phone:
1-877-322-8228
• By mail:
Annual Credit Report
P.O. Box 105281
Atlanta, GA 30348-5281
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Federal Trade Commission
(FTC)
• The FTC offers free publications on credit
cards, billing rights and how to avoid credit
card fraud
www.ftc.gov/consumer
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The National Fraud
Information Center
• The National Fraud Information Center, a
project of the National Consumers
League, offers advice and prevention tips
www.fraud.org
1-800-867-7060
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Your State
Attorney General’s Office
• The National Association of Attorney
General web site
www.naag.org
• Check the phone directory to find your
state office
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Questions and Answers
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Consumer Action
• Visit our web site:
www.consumer-action.org
• E-mail:
info@consumer-action.org
• Call:
415-777-9635
This presentation was created by Consumer Action
in partnership with Chase.
© Consumer Action 2009
CONSUMER ACTION - Credit Card Fraud Training
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