Fraudulent credit charges are fairly common, and surprisingly most consumers report having seen at least one fraudulent charge show up on a bank account or credit card statement.  First of all, let’s examine how fraudulent charges end up on your credit account in the first place, then we’ll address the steps you should take should you notice any of these charges on your account.

 

1.     Counterfeit Credit Cards.   The most common fraudulent credit card activity is due to fraudsters fabricating a credit card and loading the magnetic strip with your credit card information that they picked up from a variety of shady sources.  The most common source thieves use to copy your card information comes from skimmers which are hard to detect devices that are placed over gas station credit card payment slots or ATM machines that record card information when customers unknowingly run the card through the skimmer.  In the United States alone, the U.S. Secret Service estimates that $1 billion a year is lost from skimming.

 

2.     Lost or Stolen Cards.  Far less technical, when someone loses or has their card, wallet, or purse stolen, a slew on unauthorized charges will often follow.  The best way to prevent this kind of credit card abuse is to promptly report your card as stolen to your issuer.

 

3.      Credit Card Number Theft.  This year alone a half a dozen news stories have reported that hackers have accessed and stolen credit card information stored by various retailers and banks.   Representing 10% of all fraudulent charges, even without the card, the credit card number alone is enough to be used illegally.

 

4.      Stolen Mail & Identity Theft.  A number of desperados will still risk the wrath of the US Postal service by redirecting the delivery of a new card into their own pocket.  7% of fraudulent credit card charges are a result of mail theft, leaving the boldest, but perhaps less intelligen thieves to apply for a credit card using the identity of someone else. 

Luckily, consumers have the credit card companies protection when unauthorized charges are made on their credit cards.  Not only will the cards do everything in their power to chase down the thugs taking a free ride on your credit, but in the U.S., cardholders are protected from unauthorized transactions on their credit card accounts, and will have the charges refunded.

 

1. First, call the issuing bank or credit union immediately. Act fast – if you don’t  report the loss right away, you may end up with some liability if someone uses your card for a shopping spree permission. Once reported, you know for sure that you are not liable for any further charges on the account

 

2. If you want to be absolutely sure you document your reporting your cards as stolen you can follow up in writing. Send your bank or credit union a letter telling them when and how your credit card was lost or stolen.

 

3. Use your online banking service to review the charges on your account.  Your monthly statements should be reviewed to ensure you haven’t fallen victim to any unauthorized charges.

 

4. Check your credit report regularly, and make sure there aren’t any unauthorized accounts that have been opened in your name.  Although you won't be liable for reported fraudulent charges on your credit card, the credit bureaus may not be as easy to convince that proplems with your credit accounts weren’t your fault.   To order a copy, contact:

 

◦       Experian www.experian.com 
Phone: 1.888.EXPERIAN

◦       Equifax www.equifax.com 
Phone: 1.800.685.1111

◦       TransUnion www.transunion.com 
Phone: 1.800.916.8800