Acquiring and maintaining a good credit rating often requires sacrifice and excellent planning, and healthy credit is an achievement most people cherish. Yet too often, good people with good credit lose it all in a matter of minutes or with a click of the mouse. The culprit? Fraud.
Vigilance and knowledge are the weapons of choice when defending your sensitive personal information from those who would seek to hijack it for nefarious purposes. While new frauds are evolving every day, most of them generally will utilize some component(s) of the five most prevalent types of fraud. These common types are all absolute credit killers, and they are as follows:
1. Use of Stolen, Lost or Altered Credit Cards
Thieves can steal your credit cards from your purse, your back pocket or your home. Some may simply happen upon your cards if you lose them, and then seize the opportunity that presents itself. There are also those who will intercept new cards before they ever reach your house, then simply call the appropriate credit card companies and have the bills redirected to another address. In the meantime, they rack up thousands of dollars’ worth of charges. Another way that thieves will use your cards is to take the information from them and create counterfeit cards.
2. Fraudulent Credit Card Applications
Thieves don’t actually need your credit card to make purchases in your name, purchases that will inevitably affect your credit rating. One extremely prevalent type of fraud involves criminals stealing your personal information — often from documents they find in the trash — and then applying for credit cards using your name and financial information. By the time the creditors track you down, the damage is already done.
Phishing is one of the trickiest types of fraud ever perpetrated. With this, criminals set up a website that looks exactly like your bank or credit card company’s website. Then they send you an email alerting you to a security breach. They provide a link to their site so that you can verify your personal information. Once you do this, they have your information, your PINs, everything they need to clean you out — and they do.
Skimming happens when you make a legitimate purchase at a retail outlet using your credit card and an unscrupulous employee takes your information off the card and then uses it later to make purchases for themselves.
5. Card Not Present
While most Internet retailers are honest, some are not. If you make a purchase online with a credit card, some retailers may add extra fees to the bill they send to the credit card company — fees that you in fact were not aware of and didn’t agree to. Also, some Internet fraudsters will ask for your credit card information for your purchase and then use that same information to buy items for their business or personal use.
Incidents of credit card fraud and identity theft continue to increase. Knowledge of the most common types of fraud alerts you to what to look for. Yet, that is only half of your arsenal. The second half is vigilance. Monitor your bank and credit card statements monthly. Question every suspicious charge or withdrawal. Be hyperaware and do what is necessary to protect yourself and prevent criminals from killing your credit rating.