The chances that a fraudster will try to use your credit or debit card number this holiday season is on the rise. Fraud attempts online are expected to increase by 30% this holiday season from last year, according to e-payments company ACI Worldwide.
“Fraud is increasing at an alarming rate—due to a potent combination of data compromises, identity theft, account takeover and friendly fraud,” said Erika Dietrich, global director of payments risk, ACI Worldwide in a press release. “It is imperative that consumers protect themselves during the holiday shopping season, given this new landscape of persistent and systemic fraudulent activity.” Fortunately for you, there are steps you can take now to thwart fraud attempts as well as steps to mitigate damage if you become a victim.
What to do while shopping
Shopping smart with your cards can prevent future headaches. Here’s what you can do while shopping online.
- Check the security credentials of online retailers. ACI recommends finding the security icon or badge or badge at the bottom, right-hand corners of websites, showing the site has been verified by a third-party company. Other security measures include the little lock icon and and the word “Secure” next to the URL.
- If, available, use two-factor authentication while shopping online. This requires an extra verification step in addition to entering your username and password. Vary the email and password combinations you use with online merchants. These steps make it harder for fraudsters to take over your accounts.
- When mobile shopping, lock your phone and use a sophisticated password with at least eight random letters (capitalized and lowercase), numbers and symbols. If available, use authentication features like thumb print or facial recognition on your phone.
- Never give out payment information information via email or over the phone.
After you buy
Look out for unfamiliar purchases by scanning your debit and credit card transactions online every week. If more than one person is using a debit or credit card account, keep each other in the loop about recent purchases, so you don’t accidentally flag a legitimate purchase. To remember all of your purchases, have a record of receipts with totals to check against your online history. Also, sign up for automated alerts—either via email or text message—to see transactions in real time. Be especially wary of odd purchases made on Christmas Eve, Shipment Cut-off Day and Shipment Cutoff—Express, the days with the highest fraud attempt rates, according to ACI. Other hints of nefarious activity: Purchases of electronics and home goods—favorites among thieves—and transactions using the pick-up-in-store option.
You can also take some comfort in knowing that your bank is also watching your purchase history for any suspicious activity. Some have even infiltrated online criminal communities to help fight fraud. That’s because banks bear much of the loss burden, especially for credit card fraud.
If you’re a victim
Don’t panic if you find an odd purchase. Call your bank or credit card issuer to report the suspicious transaction or loss. You’ll be asked to confirm other recent transactions you’ve made, to confirm that no other fraudulent purchases have occurred. The bank or issuer will shut down your card, issue another account number and send you another card. The standard replacement time is five to seven business days. If that’s too inconvenient, ask for the new card to be expedited within a few days without charge.
The Federal Trade Commission also recommends to follow up your call with a letter to your bank with the account number, the date and time when you noticed the fraudulent activity, and when you first reported it.
For extra protection, contact the three major credit-reporting bureaus—Experian, Equifax and TransUnion—to place an alert on your credit report to help deter fraud attempts with other cards. This can be done online or over the phone. If your debit card number was used fraudulently, you can place an alert on your ChexSystems consumer report, a record of negative banking activity, if you have any.
You typically get a free credit or ChexSystems report when you place a fraud alert. It’s good idea to scan those as well for any unauthorized accounts in the rare case that the credit card fraud is a symptom of broader identity theft.
What’s your liability?
Fortunately, the law negates limits your liability from losses. If just your credit card number is stolen, and not your card, then you’re not liable for any unauthorized use. As for debit cards, you’re not liable for any fraudulent transactions as long as you report the suspicious activity within 60 days of your statement showing the fraudulent purchase being sent to you.