How to Avoid Credit Card Fraud

So how does credit card fraud happen? That was my question last Friday. I did a little research on the internet, and now I think I?m pretty clear as to what happened. More on that later. First, some tips for you to think about…

The obvious ways:

Purse Theft: Your purse/wallet is stolen and the thief obtains your credit cards. This is a no-brainer: keep an eye on your stuff. Don?t place your purse on the floor or hang it from the back of your chair at a restaurant. Just search for ?purse stealing? on YouTube or check out these amazing videos and see just how easy it is.
Mail Theft: Your new credit card or credit card statement or payment is stolen from your mailbox. This can be prevented by purchasing a security locking mailbox (see comments below for one option). Also consider paying cards online or taking check payments directly to the post office. It also helps to request paperless statements and to access your accounts online. If you’re traveling, have the post office hold your mail until you return.
Trash Theft: The thief can get your card number after rummaging through your trash and finding receipts or statements with your number on them. Shred or rip up all receipts or paper statements before tossing them out. And register for online statements.
Phone Scams: You may receive a phone call where you?re asked to provide your credit card info to qualify for a prize or some kind of discount. Or, the person may pose as a bank employee notifying you that your card is being reviewed for suspicious activity and the bank needs to verify your info. In case of the first call, simply say that you are not interested and hang up. In case of the second call, tell them you can?t talk now, hang up, and immediately call the phone number printed on the back of your credit card to see what’s up.
Unsecure Websites: Secure websites send your card info via encryption and secure identification of a network server. If you enter your card info on a website that is not secure, it can be up for grabs by someone else. Always check for https:// rather than http:// preceding the name of the website you?re on before entering your card info.


Phishing: This is a scam where you receive an email claiming to be from your bank, which warns you of suspicious activity on your card, asking you to login to the website to confirm your card info, using the link they provide you. Don?t click on the link. Enter the bank?s website manually, then look for the https:// rather than http://.

The not-so-obvious ways (at least, not to me):

Number Theft: A store or restaurant employee can copy down your info directly from your card or off the store?s copy of the receipt. This can also happen when using your card over the phone. This one is hard to beat. If you?re really concerned about fraud, then pay with cash at stores or restaurants. Avoid using your card over the phone.
Memory Games: Someone standing next to you in line at a store can memorize your credit card number and PIN. Okay, this is a stretch, but it could happen. Try to cover your card info and shield the keypad as you punch in your PIN at a store. Also, pay attention if someone is standing too close. It may be for a reason.
Cell Phone Snapshot: An employee can use a personal cell phone to snap photos of your card for later use. This is another hard one. If you?re really concerned about fraud, pay with cash at restaurants, where servers often take your card away to swipe it. When paying at a store, keep your eye on the employee.


Card Swapping: A restaurant or store employee might hand you a different card after you made a purchase, retaining yours for future use. Take a good look at the card that is handed back to you and make sure it’s yours. It only takes a moment.

The ?high tech? ways:

Card Tumbling: Programmers can run an algorithm to generate a sequence of numbers. Each number is tumbled (similar to how a locksmith works) until a correct sequence finally falls into place. There?s not much you can do about this one, sorry. But it?s could happen.
Employees with Skimmers: If you pay with a credit card at a restaurant or store, the person who processes your card may swipe it through the machine, then run it a second time through a magnetic reader that will store your information, making it available for use at a later time. If paying with your card at a store, keep an eye on how the employee uses it. If paying at a restaurant where they take your card away to swipe it? if you?re really concerned about fraud, get up and pay the cashier directly.
ATM/Gas Pump Skimmers: These are similar devices to the ones above, and can be implanted on gas pumps and ATMs for storing your card info. Check out this photo for an example, or google ?ATM skimmers? and look at the image results.
Spyware: This can be used to record your key strokes or capture screenshots and send the info to a specified email address, allowing thieves to record your credit card information as you type it into a website and conveniently receive it themselves. One example: ActualSpy. It?s also worth investing in an excellent internet security software such as Kaspersky Internet Security for your own computer. Avoid using shared computers or a public wifi connection to access your bank accounts and for making payments online.

Other recommendations I discovered:

Please Activate: Leave the sticker on your cards. I read about an instance where all of a woman’s cards were stolen from her wallet except the card she had activated, but had forgotten to remove the sticker from. This happened to her twice.
Use a Sharpy: Use a permanent marker to sign your cards. This way, your signature can’t be erased to add a new one.
Go Paperless: I said this before, but I’m going to say it again. Cancel paper statements and request online statements. Plus, it’s more eco. Do you really need the paper?
Security Cameras: Look for these when making a payment with a credit card. Did you know that PCI, the security standards council, requires merchants who swipe credit cards to have security cameras directed at card processing areas? Not all businesses comply.
Tip Fraud: If you’re charging your meal but tipping in cash at a restaurant, cross out or put zeros in the tip field. Servers can add a little extra tip for themselves if you don’t.

So what I think happened was that my number was stolen in a store or restaurant on my last trip to the US. This is a card that I?ve had for years and used pretty much exclusively online, on my own computer (with Kaspersky). On this trip, I used this card in stores and restaurants on a few occasions, so for the first time in years it was in the hands of employees.

I?m seriously considering emailing or calling all the places where I used the card to alert a manager that an employee of theirs might be involved in credit card fraud. If it happened at my company, I?d want to know.

Do you have any additional tips on avoiding credit card fraud?