Credit card fraud: How to detect and report it

news7g01/27/2023

4 4 minutes read

Credit card fraud: three words that can get in the way of your travel, work, or daily life. Unfortunately, you can’t credit card fraud prevention by retaining your physical ownership credit card rewards. You may become a victim of a data breachone credit card skimming devicemalware on your computer, a scam conspiracy or other attempts to make unauthorized use of your card.

For example, some payment Mastercard ® Cardholders have recently encountered fraudulent charges on their accounts due to Bank Identification Number (BIN) attack, in which randomly generated numbers are used for fraudulent purchases. It’s different from a data breach but still annoying and inconvenient.

But you can minimize the inconvenience of credit card fraud by detecting it early and reporting it quickly. Here’s what you need to know.

Credit card image. THOMAS TRUTSCHEL/PHOTOTHEK VIA GETTY IMAGE

What is considered credit card fraud?

The FBI identifies credit card fraud is “the unauthorized use of a credit or debit card or similar payment instrument (ACH, EFT, recurring fee, etc.), to fraudulently obtain money or property.” In other words, if someone steals your credit card information or uses your account to make purchases or transactions without your permission, it’s credit card fraud. It usually happens in one of two ways:

You lose your credit card or your credit card is stolen and then the credit card is used for purchases or other transactions — online or in person.
Your credit card account number and security PIN were stolen and used to make unauthorized purchases or transactions without your physical card.

How to detect credit card fraud

Always review your account activity. HERO IMAGE / GET IMAGE

The best way to detect credit card fraud is to regularly monitor your card account for strange charges. It is best to do this throughout the month to quickly catch any strange charges. However, at a minimum, you should review the charges on your billing statement monthly before pay your balance.

If you have authorized user on your account, ask them about any fees you don’t recognize. You can ask authorized users to send receipts for any purchases they make on your account, as this can help you determine which charges are authorized.

You can also set up spending notifications for most accounts. These notifications can often be sent via email, text, or via push notifications on your phone and are a great way to see when and how your card account is being used — especially if you have authorized user on your account.

How to report credit card fraud

Set up account notifications on your phone. D3SIGN/GETTY IMAGE

If you detect unauthorized transactions on your card, the best way to report credit card fraud is to call your credit card company. It’s safe and easy to use the number on the back of your card because you know it’s the official phone number. However, if you don’t have a card, you can log in to your account online. There you can find the phone number you need or use the chat feature to report your credit card fraud.

Use the phone number associated with your account if possible, as this will reduce the number of security questions you need to answer. Once you have an agent, explain that you have detected an unauthorized transaction on your account.

This advice applies if your card is lost — regardless of whether it’s been used or not. Report it immediately to prevent that loss from turning into fraud.

What happens when you report credit card fraud?

When you call your card issuer to report credit card fraud, the representative will ask you questions and often deactivate your compromised card and card number. The company will issue a new card, which is usually mailed to your home address. If you need a card urgently, be sure to say so, as the issuer may be willing to issue you a new card overnight.

Usually, you only need to call the card issuer if you detect unauthorized transactions on just one card account. But you should check your credit report, monitor other accounts and monthly statements, and change your online password regularly. When you check your credit report, look for strange questions, new accounts you didn’t authorize, or addresses you haven’t lived in, as these could be signs that you someone stole your identity. Also, make sure you recognize all activity on your accounts and bank statements. If you notice any problems, take appropriate action quickly, as you could be a victim of identity theft.

Are you responsible for unauthorized charges?

One fear when you see unauthorized charges on your credit card is that you could be held legally responsible for those charges. Fortunately, the Fair Credit Billing Act (FCBA) limits your liability. Specifically, the Federal Trade Commission Notes that thing:

Under the FCBA, your liability for unauthorized use of your credit card is up to $50. However, if you report loss before your credit card is used, FCBA says you are not responsible for any charges you do not authorize. If your credit card number is stolen, but not the card, then you are not responsible for unauthorized use.

In other words, if you own your physical card, or you can report that your card was stolen before it was used, you won’t incur any fees. Even if the physical card is stolen and charges are made before you report the theft to your card issuer, you will only be liable up to $50. Many cards go a step further by providing fraudulent liability benefits that mean you won’t be liable for any unauthorized charges if your card is lost or stolen.