The Ultimate Guide to Credit Card Fraud Prevention

This entry is part 1 of 5 in the series Credit Card Fraud Prevention

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According to the Bureau of Justice, credit card fraud is the most common type of identity theft.


A study done by researchers at The University of Chapman revealed that identity theft is the crime that the majority American’s believe they are most likely to become the victims of.


Most everyone has a credit or debit card these days, and credit card fraud is a crime that knows no bounds. You cannot avoid credit card fraud simply by avoiding the bad neighborhoods or selectively choosing your social circle. It is a crime that can happen to almost anyone at anytime.


Don’t become a victim. Protect yourself by educating yourself and becoming a savvy consumer.


The following is a list of methods thieves use to steal your data. It includes the most common types of credit card theft, but it is hardly complete. There are many ways a thief can steal your data and they’re developing new strategies all the time. At the bottom of this post, you’ll find a list of links with more detailed information about how to protect yourself.




Skimming is when your card information is stolen during a transaction.


Skimming Methods
A waitress or bartender takes a photo of your credit card when you pay for your meal or drink order.


• A call center employee records your information separately for their personal use. (This method allows the thief to acquire much more sensitive information than just your credit card number. A skilled and charismatic con artist could steal your entire identity this way.)


• The use of duplicate card readers—devices and/or cameras, attached to an ATM or a gas pump, record your card information as you swipe it.


A note about chip embedded cards.
Last year, the United States finally caught up with rest of the developed world and began the transitions to chip embedded credit and debit cards. The chip makes the cards much more difficult to skim. They are not impossible to skim, just more difficult. As a result of the increased difficulty, it is being predicted that online credit card fraud will increase with the switch to chips.


A note about radio frequency and “electronic pick-pocketing”.
(Since the chip card law went into effect, fewer and fewer cards come with RFID, but there are still a few out there.)

The following article from explains that while thieves may be able to acquire your account number by scanning it’s RFID chip, this is usually not enough information with which to use your credit card. In addition, newer RFID-embedded cards feature more security measures making it even more difficult for a thief to steal your credit card information this way. The point is, that this is an unlikely method successful thieves employ.


Still, it’s better to be safe rather than sorry, right? Especially when RFID blocking sleeves are so cheap.


Theft of the Card Itself


Unfortunately, cards are most often stolen by friends and family members – people you trust. You didn’t think twice about leaving your purse in the living room with you grandson. Not until a day later, when you received a call from a Walmart manager informing you that they had your grandson and your credit card. (This only happens when the manager is nice enough not to call the police. Let’s just be grateful it wasn’t worse; it certainly could have been.)


Internet Hacking and Phishing


As the internet continues to grow and develop, more people and more people are using it to pay bills and shop online. You can’t use cash online; you have to use a credit or debit card.


When compared to other methods, the internet presents thieves with the most lucrative, attractive, and anonymous opportunities to steal your data. Therefore, if your credit card number is going to be stolen, there is a likely chance that it will be the result of online activity. The more you use the internet, the higher your risk.


Credit card thieves love the internet and there are several ways they use it to steal your information. I highlight a few of the most common methods below.


Hacking and Phishing Methods


• Hacking into massive online databases. Companies store your information, along with the information of millions of others in these databases. These databases are irresistible targets for thieves and it can take months before anyone even becomes aware of a breach. It’s safer and far more lucrative for a thief to hack into a database than it is to skim a card or pickpocket a person.

• Setting up an online store with the intent to collect credit card information. With a little know-how, a thief can set up an online store in just a few hours, maybe less. Be wary of sites offering products for much lower prices than you can find elsewhere. If it sounds too good to be true, it probably is.

• Infecting your computer with malware. The term malware is short for malicious software, and includes all types of viruses, spyware, adware, etc. There are a number of ways you can get malware on your computer.

The top 4 ways are:

• viewing and downloading pornography,
• clicking links or attachments in spam emails,
• pirating materials, such as movies, software, and music,
• a direct install by the perpetrator themselves. (This last one happens most often on shared computers, such as those at the library.)


Do not make the mistake of thinking that just because you don’t shop online, that you are not at risk. Brick and mortar companies still use electronic networks and databases to process transactions and store information. So, even if you do not conduct online transactions you are still at risk of becoming the victim of online credit card theft.


After your information is stolen, rather than being used right away, it is most often listed for sale on the black market. This helps prevent the criminals from getting caught. Sometimes the information is sold multiple times before it gets to its final user. This process could take months, and it makes it very difficult for a victim to pinpoint when and where their information may have been compromised.


In 2014, Dr. Thomas Holt and Dr. Olga Smirnova, published a paper about the market for stolen data. The study reported the average black market price for credit card accounts was approximately $66. That is how much a thief is willing to pay for your information.


Once they have your information, it’s off to the races! Or to the local Best Buy. Most thieves take your card and go on a shopping spree. They almost always make large purchases quickly, because they know the card may soon be deactivated and they don’t want to run the risk of getting caught. They’ll buy things like computers, TVs, and even gift cards. Most of the time, they’ll resell these things so they can have cash instead. Ever wonder why some things are dramatically cheaper on EBay? Theft is why and this is one way they do it.


Another potential use for your information is to use it to acquire even more information about you. Once they have enough, they can use it to assume your identity. With your identity, thieves can open up new credit accounts, take out loans, receive government assistance, commit tax or employment fraud, rent a house, open up utility accounts, and sign other types of financial contracts.


This is identity theft at its worst, and it’s no doubt something we all desire to prevent.


The government actively pursues these criminals and their methods, businesses invest billions of dollars in security software and equipment, government websites, news outlets, and blogs everywhere are full of warnings and advice about how to protect your personal information, and individuals go to great lengths to follow this advice and pass it around. All this, just to stay one step ahead of any would-be thief.


Identity theft is a crime that results in the least change in behavior from its victims. Fool me once, shame on you. Fool me twice shame on me. It seems that people are too arrogant to believe that could happen even once let alone twice.


But it can, and it does.


Whether or not you’ve been a victim, it’s in your best interest to behave in such a way that protects you and thwarts potential thieves.


A savvy consumer takes several takes several steps to help ensure the safety of their information.


Below, I’ve compiled a comprehensive set of lists about how you can protect yourself against credit card fraud. Just follow the links below.


24 Tips to Protect Yourself From ONLINE Credit Card Thieves


15 Tips to Protect Yourself From OFFLINE Credit Card Thieves


14 Additional Tips to Protect Yourself from Credit Card Thieves


12 Things to Do If Your Credit Card is Stolen


The Ultimate Guide to Credit Fraud Prevention


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