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Protecting yourself from credit card fraud

25 January 2012

Having your credit card stolen or misused, along with identity theft, are ubiquitous and expensive problems, costing credit card companies $50+ billion dollars annually, not to mention the costs to you, the consumer. This post examines ways to protect ourselves against this type of fraud.

Skimming is making illegal and unauthorized copies of credit or bank cards using small reading devices that “skim” the information from the original. This can happen through dishonest business practices or, for example, when you give your credit card to someone to pay for goods or services, as when you give your card to a server at a restaurant. These skimming devices have been known to be disguised as cell phones, and even as a fake ATM machine.

The information can then be used to charge items or pay for things over the Internet. It’s a good idea to always watch carefully when you give your card to anyone, and especially when that individual must walk away from you in order to complete the transaction. Additionally, when you are handed back your card, make sure it is indeed your card, and ensure you get your card back after using an ATM.

Phishing is sending bulk fake emails to consumers hoping one or more of its recipients will fall for the phony bank emails, or other bogus “official” emails, and click on links to provide personal information. These scams largely succeed because they are very sophisticated, with logos or even URLs that are surprisingly similar to the real thing. I have received these myself, and have occasionally been amazed at the level of sophistication. In a successful scam, an unsuspecting victim clicks on the link and is taken to a fake website. The victim then unknowingly supplies his/her own personal information to the thieves. Banks will never ask for personal information in this way.

Be particularly cautious with your credit card numbers, bank numbers, and even your mother’s maiden name. Instead, if you receive a suspicious email, visit your bank or other institution in person, via the bank’s secure website, or call the institution directly.

At any rate, you should never send this type of information in an email because emails are generally not secure, and the information could be intercepted, although Google’s Gmail claims it is the first major email provider to offer default encryption:

Gmail is the first major web mail provider to offer default HTTPS access. This means that messages are encrypted during their transmission from your web browser to Google’s servers, which helps protect your data from being snooped by third parties if you’re using an unsecured Internet connection. Learn more.

If you go to your bank’s secure website, you will know it’s secure by seeing the little key lock icon in the top browser bar or lower-right-hand corner. Also, if you do bank online, do not use the automatic sign-in option, and that goes for any credit card site as well. Understand that secured, encrypted sites begin with “https” instead of just “http.”

The security code is a three- or four-digit number on the back of your card. Merchants may use this number to ensure the card is actually in your possession when you make purchases over the phone or Internet. Zealously protect this number as well, as if thieves make off with the other information, they won’t be able to use it without this security code. (Many merchants now also verify your mailing address and zip code, so make sure these are up to date.)

To protect new cards, make sure you phone in verification as soon as you receive a new card. Sign the back in black, permanent ink. Some folks have taken to writing “ask for ID” on the signature line, but credit card companies recommend against this as some merchants require a signature.

Record all the credit card information and keep in a secure place (not traveling with you!) in case there’s ever a problem. Keep copies of all receipts – both point-of-sale and ATM – to check against your monthly billing statement.

So what else can we do to protect ourselves? Of course always keep a close watch on all your belongings. Never travel with more credit cards than you will need. Do not travel with your Social Security card unless you’re going to need it. Keep your credit cards separate from your wallet. If you lose your wallet or purse, or it’s stolen, notify your bank and credit companies immediately (your liability for unauthorized purchases is limited to $50 per federal law, but you could lose that protection should you be negligent in reporting the card missing or stolen).

Notify the post office immediately if you are moving, and if you move, call all of your creditors to let them know. Always put your complete return address on outgoing bills, and never leave outgoing bills in a mailbox in front of your house – leave them at the post office or other secure mail box instead. Shred all credit and other solicitations before disposing of them, and know when your billing statements are due to arrive. Better yet, check to see if there’s an online billing statement option and choose that instead (be sure to go to the site directly to pay!).

Some websites offer “free access” if you provide credit information. Don’t fall for this – it’s likely you’ll be charged a one-time or even revolving fee. Monitor your account for such activity.

Don’t write your PIN number down – memorize it. If a merchant calls you regarding a purchase, ask to call them right back. Don’t keep your PIN number with your cards. Don’t use your birthday or your children’s birthday for your PINs. Don’t lend out your card, because you will be responsible for whatever charges that person makes (if you knowingly and willingly give out your card).

If you will be traveling or making unusually large purchases, let your credit company and bank know. If you don’t, you may just get to Timbuktu and find you can’t use your card.

Notify your bank or credit company immediately if your cards are lost or stolen. Your liability is limited only if you take care of this notification in a timely manner. Follow verbal or email notification up with a letter and keep a copy. The letter should include your account or card number, the date the card went missing, and the date you reported it. When you report this loss or theft, you will be sent a fraud affidavit. Fill it out, have it notarized immediately, return it, and keep a copy for your records.

Review your monthly statements immediately as they arrive. Consider using companies that allow online account access. This way you can monitor your account activity daily. Know when your bills are due, and report missing ones promptly (you are responsible for paying your bills even if you didn’t receive the statement).

Read the federal Fair Credit Billing Act (FCBA). Know that you have the right to dispute charges on your credit card and ask for a “chargeback,” ie a refund from the credit company. You cannot dispute a charge that has not yet been made, but with an online account, you can monitor daily for questionable charges. You must notify your credit company within 60 days to dispute a charge or you may lose that right. Always chronicle disputes in writing. If you phone your credit company, follow up with a letter. Make sure you fill out any forms or affidavits they send you, and always keep a copy.

Use credit instead of debit cards: you can dispute unauthorized credit charges, but with debit cards, when the money is gone, it’s gone.

Everyone is entitled to at least one free credit report annually. You have the right to get one free report from each of the three major reporting entities  – Equifax, Experian, and Trans Union — for a total of 3 reports annually. Order yours online at

One last thing, you don’t have to pay extra for fraud protection provided you report any problems timely. Don’t be snookered into spending extra money each month that you don’t have to spend. Just make sure to report lost or stolen cards immediately. If you report the loss as soon as the card is stolen or used for an unauthorized purchase, the FCBA dictates the credit card company cannot hold you responsible.


For more info:

Federal Trade Commission  (consumers)

National Fraud Information Center 

State attorney general’s office (find your state attorney general here!)

LegallyBlog® on Facebook

More on consumer law

If interested, please see my series on discovery:

What is discovery, and what are interrogatories?

What is a discovery subpoena?

Discovery II: What are requests for disclosure?

Discovery III: What are requests for admissions?

Discovery IV: What are requests for production?

Discovery V: Depositions–What is a deposition on written questions, or DWQ?

NOTE: I am not an attorney. This foregoing is not to be considered legal advice. If you need legal advice, consider hiring an attorney licensed to practice law in your state.

Sami K. Hartsfield, ACP is a paralegal and freelance writer based in Houston, Texas. She is a NALA Advanced Certified Paralegal, and has earned six specialty certifications since 2007: Discovery; Trial Practice; Contracts Management; Social Security Disability Law; and Entity & Individual Medical Liability. She is also WestlawNext certified. Sami has worked as a law firm Webmaster, law firm social media marketer, and a ghostwriter for personal injury law firms. She holds a degree in paralegal studies with a 4.0 GPA and a bachelor of science degree in political science, graduating summa cum laude. Sami interned with Texas’ 14th Court of Appeals under Chief Justice Adele Hedges, and completed the University of Houston Law Center’s Summer 2008 Prelaw Institute with a 4.0. You can find her on Facebook and e-mail her with questions, comments, or ideas at


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Copyright 2012 Sami K. Hartsfield – All Rights Reserved
  1. Sami, Excellent article! So good, in fact, that we’d like to share it on The Paralegal Society if you’ll allow us to! Thanks for helping to educate us about this important issue and providing us the information we need to protect ourselves. Keep up the great blogging! ~ Jamie

  2. Mary Ann Heaton permalink

    Thank You for this great information. Everyone should read this as it is so very Important. This was truly a great article. Thank You for posting it

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