Last year across the U.S., there were 11,571,900 victims of credit card fraud. The average loss per victim was $4,930.
In 2013, the total loss due to credit card fraud was $21 billion. This is a huge increase over 2010, when the loss amounted to $13.2 million. There are principally two reasons why the numbers have jumped despite efforts by banks and credit card companies to improve security.
The first is that consumers are not well-informed about how their sensitive information is stolen, and the second is that thieves are stealing information in such a slick way that consumers only become aware of a theft when they see the losses on their credit card statements.
The consumers’ naïve perspective
Consumers with credit or debit cards often assume they are safe from fraud if they are careful not to lose the card or allow strangers to glance at their card numbers. Unfortunately, this is a naïve approach to protection, because thieves can now steal your credit or debit card numbers without your knowledge.
They use various hi-tech methods to get your numbers, passwords, and PIN. While there various ways they can do this, three particularly effective schemes involve the use of ATM skimmers, public Wi-Fi access, and phishing to steal sensitive information.
ATMs or point-of-sale terminals may contain a skimming device that records your personal identification number (PIN). These devices may be added to the PIN pad or slot where you swipe, place, or insert your card.
If the pad has scuff marks, glue, or loose bits of material or paint, a skimming device may have been attached to it. Usually, these are ATMs outside of bank premises and in remote locations.
Public Wi-Fi access
It may seem like the height of convenience to be able to check your bank account balance when you go to a coffee shop or gift store that has Wi-Fi access. Unfortunately, hackers may be able to read passwords and other online transactions when you are at such locations. The only way to avoid this is to avoid checking your online balances while you’re shopping in public.
Information on HTTPS websites is not secure either. The riskiest places to check your account balances or gain access to other financially sensitive websites are coffee shops and hotel lobbies where there’s a public network.
While many people have become familiar with phishing scams that show up in their email inboxes when they use their computers, the bad news is that phishing has now spread to mobile devices. It’s now possible to get a text message on your smartphone that asks you to check your card account.
This kind of message can appear to have been sent by your bank or credit card company. You may also get the message while surfing Twitter, Facebook, or another social media network accessible from your smartphone.
The best precaution is to assume all unsolicited messages — via a call, email, text, or your favorite social media platform — are suspect. Phishing can come from any of them.