Credit card fraud and identity theft are two of the growing and most serious crimes that today’s technology has helped to propagate. Since the Internet can now send data at faster rates than we ever thought possible, a crime such as credit card fraud can now create damage that’s twice as devastating. In just a few hours after a credit card’s details have been copied, the details can then be sold online for as little as $50. The moment a buyer pays for a stolen credit card’s details, the victim’s downward spiral into bad credit begins. All in a matter of a few hours.
On the other hand, Securosis insists that Credit Card Fraud is NOT Identity Theft:
“Identity theft is a serious crime with potentially severe repercussions for the victim. It’s when a bad guy uses your personal information [...] to use your identity for nefarious purposes. [...] Credit card fraud is serious, but not nearly as serious. That’s when someone steals your credit card number and uses it to make fraudulent purchases.”
Whether you’ll agree with HowStuffWorks’ or Securosis’ definition of the two terms isn’t important. What is more important is that both crimes victimize a person through the same means, and with a similar purpose: the data is obtained fraudulently, in a move akin to theft, and the reason why the crime is committed is so that the criminals can use money that is not theirs.
An ID thief can open new credit card accounts using the victim’s details. Then, as soon as those accounts are activated, the thief can then make transactions and won’t need to pay for them, because they’re not in his name anyway. In credit card fraud, the credit card thief does not need to steal another person’s SSN. All the thief needs is just the credit card itself. All the information the credit card thief needs is already stored in the credit card’s magnetic strip. For credit card thieves who operate a “skimming” operation, all they need to do is to swipe the card through their credit card skimmer, and they can then copy this information onto a fake new card.
Some credit card thieves don’t even use the stolen credit card themselves. They may sell the fake cards online in a credit card scam operation.
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What happens is that a skimmer records the credit card’s information. Remember that the skimmer is the gadget that lifts the credit card information off of the metallic strip. The skimmer can be deployed by a waiter in a restaurant. He or she may have the skimmer gadget hidden in a pants or apron pocket. When the customer hands over his credit card to pay, the waiter can then take the card and surreptitiously swipe it through the skimmer. In a matter of minutes, even seconds, the customer’s credit card information has been stolen.
After the credit card information has been lifted by the skimming device, the credit card thieves will then transfer the data to a counterfeit card with a magnetic stripe. This is practically a copy of the card they had skimmed. The credit card thieves can then sell the counterfeit cards on the black market.
Another way of reselling a stolen card is through just selling the credit card details. The numbers, especially if all the details had been jotted down, are good enough to make fraudulent transactions with it.
When these cards are used either by the credit card thieves themselves or their buyers, the victim then needs to deal with the losses. Even though the major credit cards are legally allowed to charge a credit card fraud victim only up to $50 of the fraudulent transactions, the victim would still need to chase down every transaction and dispute it with the creditors/sellers of the goods that were fraudulently obtained. This is why it is clear that the credit system is not yet equipped to handle the onslaught of credit card fraud and identity theft crimes.
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In the case of these two crimes, it is clear that only credit monitoring is the surest form of defense for it so far. In order to see how credit monitoring helps, we’ll give you a few hypothetical examples of how it works to protect you:
- When things get crazy at work and you have no time to check your accounts, credit monitoring will be able to catch those transactions you’ve never done and won’t ever do. Especially if all you can do at the end of the day would be to collapse, exhausted, into your bed.
- When you’re on vacation and will be unable to get to use a secure connection to check your online bank and other financial accounts, credit monitoring will be able to give you alerts via your smartphone.
- Since email is a little safer to access anywhere than an online financial account, it would be a relief to receive email alerts of transactions made on your account if ever any incident comes up.
Former credit card thief DanDeFilippi adamantly recommends a user to manually check their accounts once DAILY. Given that this man knows what it’s like to steal YOUR information, this advice is definitely reliable. However, what happens when you are on vacation, too busy, or otherwise indisposed? We’ve already illustrated how credit monitoring helps, especially in the cases of credit card fraud and identity theft. Protect yourself from these crimes. Monitor your accounts regularly, and get credit monitoring for that extra layer of protection and added peace of mind.
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