Javelin Strategy & Research is a California-based company that issues a comprehensive annual report about identity fraud. The results of the latest report reveal that more than 13 million consumers were harmed by identity theft last year and 88% of that activity involved existing financial accounts such as credit cards.
What can you do to avoid becoming one of this year’s credit card scam statistics? First of all, don’t post confidential information on social media. That is one of the biggest concerns of risk managers within the credit card industry because it is hard to control the kind of information that consumers are willing to share. Thieves constantly troll the internet and compile those bits and pieces of data, allowing them to construct a credit profile on you.
Beware of the $9.84 Scam
One of the most important lessons for 2014 can be learned from a scheme that is the current hot topic discussed by leading consumer protection advocates and law enforcement agencies. The so-called “$9.84 scam” earned its name because thieves only stole $9.84 at a time but stayed beneath the radar long enough to make off with millions.
The way this particular rip-off works is that credit card thieves play the “long game” versus trying to exploit you for big one-off profit that will trigger an immediate investigation. They quietly siphon off small amounts at a time, typically less than $10.
The $9.84 ploy succeeded, for instance, by listing the rather insignificant charge in a mundane way that is meant to never arouse suspicion or catch your attention, such as a “customer service charge” or “account maintenance fee.” Oftentimes couples are targeted with shared or joint accounts with the theory that one account holder will brush the charge off as something their significant other bought. A crime ring can conduct thousands of these scams simultaneously every month and make off with massive amounts of undetected funds.
Line Item Awareness is the Solution
The good news is that this kind of fraud is easy to protect against; you just need to read your credit card and bank statements line-by-line. That may seem tedious, but it’s the key to avoiding this kind of popular scam and only takes a few minutes per month. Even relatively small charges that lack justification may be your only clue to the fact that you are being robbed by a sophisticated international crime syndicate.
This type of scam is expected to become rampant in 2014 because millions of consumers have had their credit card data stolen during recent and massive data breaches. By hacking into retail store chain databases and other treasure troves of financial information, criminals made off with lots of valuable credit card numbers. Read your monthly statements carefully, and then shred them promptly.
Plastic With Protection
Credit card hackers are ramping up their efforts to exploit the older technology while there is still a window of opportunity. Fortunately some banks in the USA are responding and plan to convert to a pin-and-chip credit cards within the next two or three years, If you’re in the market for a credit card you might want to shop at a bank that already has these cards available. Those include Citi, Chase, USAA, and Bank of America. You may also want to call your credit card issuer and ask for a chip-enabled card to replace your old one. Some card companies have them, but haven’t created them on a mass scale yet. They will, however, issue them upon request if they do offer them.
If you are able to get a chip-enabled credit card, it’s a good idea to carry one of each. Like most new technology, it takes a little while for everyone to get on the same page and to iron out any issues. These new pin-and-chip cards may not work all across the United States, however, because the card readers merchants use are meant for a magnetic strip enabled card.
As far as bank safety measures go, last year’s Javelin Strategy & Research report – which involved statistics from 2012 – credited Bank of America for having the best all-around security, and gave high marks to USAA for having robust theft prevention systems in place. Wells Fargo was the top ranked bank in terms of alerting consumers to suspicious activity in their accounts.