Fraud is becoming an increasingly dangerous phenomenon in the consumer world and a growing number of people are falling victim to scams, whether over the interest or in person.
However, credit cards offer some of the best protection available to prevent you becoming a victim of such frauds as well as providing some of the best cover if you do find that you have been scammed.
Credit card fraud
While many people will be aware of the threat of credit card fraud over the internet, they may have forgotten that having a card stolen is just as serious a threat. There are a few simple steps which can be taken to tackle the potential problems that arise out of having your card stolen so that you can limit the damage done to your bank account.
First of all, it is important to note that a UK credit card holder will not be held financially liable for fraud on their card. However, while you will generally only be liable for up to £50 of the amount fraudulently taken from your account, in certain circumstances this limit can be waived. This is usually only in rare cases where the card holder is found to have acted fraudulently or without reasonable care.
Therefore, it is important to take certain precautions to avoid the accusation that you have not acted with reasonable care.
Pin problems
One of the most obvious ways to do this is to keep your pin number in a safe place if you have it written down at all and not with your card.
Another important thing to do is to protect your credit card details by preventing others from discovering your pin number. This not only means ensuring nobody can see what numbers you are typing when using it in a store, but also never giving out such information to anyone, particularly over the telephone.
It is also crucial that you regularly check your statements for any transactions you do not recognise as your own, because if you rarely check such statements it will be difficult to remember what each transaction represents. The internet makes checking your statements much easier as you can do it at your own convenience and do not need to wait for the monthly printout from you card provider. This can help to tackle card fraud by making you aware of it as soon as it occurs.
Signatures
Today, with the advent of chip and pin, only a handful of stores still require a signature. However, this does not mean that a signature on the back of a card is now useless. It is still important for you to sign the back of your credit card, not least because it will be easier to prove it is yours should you lose it. Some places still accept signatures rather than pin numbers, meaning that if you do not sign your card and it gets stolen, you could be making the criminal's life much easier.
Internet use
The biggest area of concern for most credit card users these days is using their card over the internet. This is because of the many scare stories which you may hear about how people have become the victims of card crime over the internet. So-called 'phishing' scams, where crooks take credit card details when you enter them into what you believe to be a genuine website, have become particularly prevalent, but there are ways to reduce the threat of falling prey to such scams.
It is always important when online to check a website's security. This can be done by checking that the security icon is always showing when entering credit card details into a website. This icon can be found on the bottom right-hand side of the webpage and will take the form of either an unbroken key or locked padlock.
Another important thing to look out for is the webpage's address, as this can provide an indication as to whether the website is a scam or not. The first thing to check is that the website address corresponds to the website you expect to be purchasing from even if the main screen looks identical it may be a scammer at a different address who has managed to reroute you. Further, the beginning of the retailer's address will always change from http to https when you are making a purchase using a secure connection. If this does not change then it may be worth checking with the company as soon as possible and keeping a close eye on your credit card for the following days and weeks.
Security settings
It is vital to check the security settings of your internet browser. The most popular ones, such as Microsoft Explorer, Mozilla Firefox and Opera, all have built-in security filters which can be set at different levels by the user themselves. Therefore, it is necessary for those planning to use their credit cards to purchase goods on the internet to check that their browser is on the highest security setting, so that the danger of becoming the victim of fraudulent activity is kept to a minimum.
It is also important to recognise that financial institutions and retailers are always looking to improve the security features on their websites so as to provide customers with a safe way to use their sites. For example, an increasing number of specialised information is now required of consumers when looking to log in to their bank account, such as an identification number, date of birth and a personal pin number, among other details. This multi-faceted approach is aimed at making it more difficult for hackers to figure out how to use a person's credit card online even if they have the card in front of them.
Identity fraud
Criminals can piece together enough information about you to be able to act as you and commit crimes such as fraud, theft or deception. Credit card details are always a key part of the identity fraudster's arsenal and as such it is imperative that you do not provide any opportunity for such information to become available.
Therefore, card holders should always remember not to leave their credit card bills lying around. For example, it can be easy to forget a credit card bill after paying for a meal in a restaurant, but leaving it on the table could allow a fraudster access to useful information contained on that receipt. Even throwing away credit card bills and statements in the bin can be dangerous, as this would allow anyone going through your rubbish access to a wide range of financial information.
As a result, the best thing to do with credit card information that you plan to throw out is to make sure it is shredded or ripped up first. This will make it far more difficult for a fraudster to piece together enough information to carry out an identity fraud.
Credit card insurance
As more people carry credit cards with them every day, so the danger of having them stolen or losing them has increased. As a result, credit card insurance has been developed to reduce the stress of losing your cards. Once registering with them, a credit card protection firm will cancel all your cards immediately when you call them to tell of the loss, theft or fraudulent use.
Although this might not be so useful for someone with only one card, the scheme can prove highly efficient where several cards are involved, because this means only one phone call can result in fraudulent on all cards being prevented almost immediately, rather than the consumer having to phone around all their card companies.
This can also prove useful if the loss or theft occurs when on holiday, as the insurer will provide cash advances to cover reasonable costs, such as hotel bills, which will not need to be repaid until your return.
Any fraudulent actions carried out on your card will also be covered and paid out by the credit card insurance company.
Chip and pin
Chip and Pin is part of a Europe wide initiative to cut card fraud. Recently trialled in the UK, Chip and Pin was seen to provide a safer card payment method. You simply enter your pin into a keypad - just as you would at a cash machine - instead of signing a bill. The idea with Chip & Pin is that signatures are sometimes easy to forge, while Chip & Pin technology is extremely difficult to crack. Many banks are now issuing chip and pin cards. If you don't know your pin number, your bank should be able to issue you with one. The good news is that you will be able to use chip and pin technology abroad.
To compare credit cards from the UK's leading providers click here.
Author: KYM Editor
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