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Guarding Against Credit Fraud

Tue, 06/03/2014 - 1:24pm | by Guest Author

Reportedly, what could be one of the largest credit card-fraud cases ever brought by the U.S. Department of Justice was revealed this past month as 18 defendants were charged with bank fraud conspiracy in a federal complaint in Newark, New Jersey, reported.

According to court records, the grand scheme involved three basic steps: the defendants allegedly created thousands of fake identities, inflated the credit histories of those fictitious consumers and then racked up charges on fraudulently obtained credit cards. The scam involved more than 25,000 fraudulent credit cards.

For consumers, credit fraud is the ultimate nightmare. And there's nothing you can do to guarantee that you'll never be a victim, you can decrease the chance of credit fraud by safeguarding your cards with the following information.

The Consumer Information

One of the best ways is to subscribe to an identity protection service like LifeLock, for example, that monitors and reports any attempts at unauthorized use of your name or your credit. It’s an inexpensive, highly effective way to shield you from fraud. Another effective way to protect yourself is to use credit cards — rather than your debit card — for transactions.

According to, Visa, MasterCard, American Express and Discover all offer blanket $0 fraud liability guarantees. That means if unauthorized transactions are made with your card, you won't have to pay a penny because the card network has it covered. By contrast, coverage for unauthorized debit card and prepaid card transactions depends on whether a signature or a personal identification number was used to verify the transaction.

More Advice

Some cards offer liability protection — others don’t. More advice: keep an eye on your credit card every time you use it, and make sure you get it back from a restaurant server or merchant as quickly as possible. Don't give out your account number over the phone unless you initiate the call and you know the company is reputable. Never respond to emails that request credit card information via email and don't ever respond to emails that ask you to go to a website to verify personal (and credit card) information. These are called 'phishing' scams.

Never provide your credit card information on a website that's not a secure site. Shred all credit card applications you receive. Don't write your PIN number on your credit card or have it anywhere near your card (in the event that your wallet gets stolen). Never leave your card or receipts unsecured, simply lying around.

Shield your credit card number so that others around you can't copy it or capture it on a mobile camera. Keep a list in a secure place with all of your account numbers and expiration dates, as well as the phone number and address of each bank that has issued your credit card. Keep this list updated each time you get a new credit card. Finally, only carry credit cards that you absolutely need. Avoid having credit cards that you don't need. 

Though it may sound paranoid, open bills promptly and make sure there are no bogus charges. Save your receipts so you can compare them with your monthly bills.       

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