Fraud and Scam Awareness: Credit Fraud and Identity Theft
Forgers falsify personal documents for many reasons: to defraud businesses and individuals, to hide employment or citizenship status, or even to commit a violent crime. Most forgers limit their crimes to stealing non-voided checks or credit card slips from mailboxes and garbage.
But credit card forgery has become the most common crime. The cost of credit card fraud is over a billion dollars each year. There can be a lot of effort that goes into creating false identification to match stolen checks and credit card numbers. False identification can also be used to apply for credit at stores or even to drive new cars off dealer lots. However, most forgers typically rely on the sense of urgency, or long lines, to simply hurry clerks into accepting their stolen checks and bogus credit cards.
Forgers’ efforts result in an increased cost of retail goods for all of us. Forgers are easy to foil, if you make sure to destroy the following before throwing it away: checks, deposit slips, identification, personal information, credit card numbers, and other important documents. Many dumb crooks will use their own ID cards and accounts to help them cash bad checks. These crooks are easy to catch, but only informed consumers can foil the better ID forgers.
Forms of credit fraud
While theft is the most obvious form of credit and charge card fraud, fraud occurs in other ways, as well. Thieves can use your card number (without holding the actual card) in a variety of ways:
- A "friend" may borrow your card for an agreed purpose, and then make additional
unauthorized purchases
- A lover or friend may ask you to cosign or complete a
credit application for his/her use, only to leave you responsible for the charges after
the relationship ends (yes, this is a common and willful form of credit theft)
- Card slips and billing statements can be used to make unauthorized charges on your
card. Such charges include: long distance calls, catalog purchases, Internet services,
phone-sex charges, and other purchases
- Dishonest clerks can use card imprints
to increase their tips, cover personal store purchases, and even pocket money from cash
registers
- Internet retailers have increased or even repeated billing charges
despite the consumer’s authorization for a single transaction
- Kids use stolen or traded credit card numbers to purchase on-line Internet
services—while being protected from prosecution by the use of an anonymous eMail
provider
- Large forgery operations have even applied real card numbers and names
to credit card "blanks"
- People get letters which describe free vacations or
other prizes available by calling an out-of-state number—of course, a credit card
number is necessary to pay some excuse for a fee
Guard against credit fraud
Here are some suggested precautions you can take to help protect yourself against credit and charge card fraud. You should also instruct any other person who is authorized to use your account to take the same precautions.
- Avoid signing a blank receipt, whenever possible
- Carry your cards separately from your wallet, and carry only the cards you use
- Destroy pre-approved credit offers that you don’t want
- Don’t write your Social Security number on checks to merchants
- Draw a line through blank spaces above the total when you sign card receipts
- If you have questions about a company, check with your local consumer protection
office or the Better Business Bureau before making a purchase
- Keep a record of credit card numbers, their expiration dates, and the phone number
and address for each issuing company in a secure place
- Keep your card in view, if possible, after you give it to a clerk
- Never cosign or complete a credit application for someone else’s use unless you
are directly related to the applicant—hey, if someone can’t get credit, maybe there’s a
good reason
- Never give your number over the phone unless you are initiating a
transaction with a company which you know is reputable
- Never leave your cards, receipts, billing statements, or credit applications lying
around
- Never lend a credit card to someone other than an authorized user on your account
- Never put your card number on a postcard or on the outside of an envelope
- Notify card companies and financial institutions, in advance, if you change your
address
- Open billing statements promptly and reconcile your charges each month
(just as you should your checking account)
- Quickly report any questionable charges to the card issuer
- Request credit reports, up to once per year, to look for unauthorized use of your
credit identity
- Retrieve your card promptly after use
- Save your card receipts to compare with billing statements
- Sign credit cards as soon as they arrive
- Try to block other people’s view of your card when you use your card at phone booths
or in shops
- Use a post office box if you are concerned about the security of your
mailbox
- Void or destroy all carbons and incorrect receipts
- When you mail in payments to a financial institution, make sure you use their post
office box (when possible)
If your cards are lost or stolen
If your credit or charge cards are lost or stolen, call the issuer(s) immediately. Most card companies have toll-free, 24-hour numbers for reporting lost cards. By law, once you report the loss, you have no further liability for unauthorized charges. Your maximum liability under federal law is $50 per card.
If you suspect credit fraud
If you suspect someone has illegally used your credit identity or credit accounts, call the credit issuer immediately. Many card issuers list their numbers on billing statements and on the backs of credit cards. You should follow up by sending a letter—keep a copy for yourself. You may have to sign a statement (under oath) that you did not make the purchase or credit request in question.
The Federal Trade Commission has more information about your credit rights and have released a
booklet containing information on how to prevent identity theft and what to do if
you've been a victim.