What does Credit Card Fraud Cost Us?

We all know that credit card fraud is a major concern, but precisely how much are the sticky fingers of thieves costing us each year? APACS surveys show that the problem is perhaps far more widespread than we imagine. The figures for credit card UK loss due to fraud in 2003 totaled £411.6 mn. APACS breaks the figures down into five separate categories. Below are the five categories, the amount of the loss and a few tips on how to avoid becoming a victim.

Counterfeit Cards - 128.8 mn
By far, the greatest category of credit card loss is in the area of counterfeit cards. Thieves who get hold of your credit card details - account number, expiry date and the like - and make a copy of your card. They can then use your card at any merchant. This is the type of fraud that Chip & PIN is designed to combat. By requiring you to enter a PIN when you use your card at the till, credit card companies are making it far more difficult for counterfeiters to get away with your money. Still, thieves who make off with your name, account number and expiry date can use your card in places that don't yet have Chip & PIN machines.

To safeguard your accounts, apply for a credit card that uses Chip & PIN, and never share your PIN with anyone. Shred credit card receipts and bills before tossing them in the bin, and never let a cashier walk off with your credit card.

Card-not-present - 109.6 mn
The second largest category of fraud is in card-not-present transaction - those purchases made by mail, over the telephone or on the internet. The only thing a thief needs in this case is your credit card account number and your name and address. Thieves pick up those personal details by going through your trash bin, skimming the card details on a mag strip reader, or through 'social engineering' - they ask you for them.

Keep your credit card information safe. In addition to the tips above, be wary of giving out your credit card account number to anyone. When you shop online, make a point of shopping at merchants who do not store your credit card numbers between purchases. If you have the option, apply for a credit card with a low spending limit or for a prepaid credit card and use only that one for internet purchases.

Lost/stolen - 107.2 mn
Lost and stolen cards account for another ₤107.2 mn lost to fraud. If your purse or wallet is stolen, or you misplace your credit card, you are only liable for a small amount of the charges made to your card before you report it missing. However, the following steps are recommended if your credit cards are lost or stolen:

• Notify the card issuer immediately that your card is lost.
• Cancel any accounts that are linked to the lost credit cards and apply for a new credit card account.
• Watch your post carefully until the new card and PIN arrive. Credit card thieves often follow up a stolen card by watching for the replacement card to arrive and stealing that to activate it.
• Check your credit reports to be sure that no one opens other accounts in your name (with all your identification, it's an easy thing to do)

Mail non-receipt - 41.0 mn
About ₤41 mn in fraud is accounted for purchases made on credit cards that were never received by their intended users. They may be stolen out of post boxes, or diverted in some other way. The best defense against this type of credit card fraud is to make sure that your mail is delivered to a locked post box, and to keep a watch over it if you're expecting a card to be delivered. Make note of the date when you apply for a credit card, and ask when you can expect a response to your application so that you're not surprised when an account statement arrives with your name on it.

If the first you learn of it is when you receive an account statement from the issuing company, contact them immediately to cancel the card and request a replacement.

Identity theft - 25.0 mn
While identity theft represents the lowest proportion of credit card fraud, it is the fastest growing portion, jumping from ₤16 mn to ₤25 mn in the course of one year. The best defenses against identity theft are safeguarding your personal information and vigilantly checking your credit report as often as you can. Identity theft is particularly insidious because the victim often has no idea at all that they've been victimised. Using your personal information and a false address, a thief will apply for several credit cards -  in your name. Often the first hint that victims have is when they apply for a credit card themselves, or attempt to get a mortgage and find that their credit is completely ruined.

The best way to prevent identity theft is to be very careful where you enter your personal information. You can also request to be notified whenever someone queries the credit bureaus for your account for a small fee. That will alert you immediately that someone is inquiring into your credit history and may save your credit from being irreparably damaged.

One way to be careful about your personal information is to always do business with a trusted site, especially when you apply for a credit card. After all, you're entering all the information that a thief needs to steal your identity. At www.moneyeverything.com, you can always be certain that you're dealing with reputable credit card companies.