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 e-mails
– 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 e-mail
• 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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