August 23, 2013

How to Protect Your Credit Cards From Identity Theft

This is the number one risk for identity theft in America so it's a vital topic for us to talk about.
Today, we're moving out of the workplace and away from computers so we can look at how to protect your credit cards and debit cards from being used by an identity thief. According to the Federal Trade Commission, about 12% of all identity theft reported between 2002 and 2004 involved the fraudulent use of existing credit card account, plus another 8% involved the use of existing checking accounts. That's why it is critical to understand how this information can be stolen and what steps you can take to prevent yourself from becoming a statistic.


Low-Tech Methods


Before we talk about some of the more advanced methods for stealing credit card information, let's talk about some of the more basic methods:


  • Taking the cards out of your mailbox or finding discard/expired cards in the trash (the banks don't usually update the card numbers from the old card to the new card).
  • Stealing your purse or wallet with your debit/credit card inside. They can erase your signature and sign your name their own way.
  • Lying to the bank and reporting a card as missing or stolen to receive a new one.


Using shredders that can handle credit cards, monitoring your mail or having it sent to a post office box, and only carrying your debit/credit card when they are needed can help with these methods. You should also sign your cards with a fine-tip permanent black marker so it doesn't wear off and can't be erased. Of course, some identity theft methods aren't as easy to spot or to stop.


Card Swiping


When your debit or credit card is swiped through one of those card readers, the computer accesses all of the information about your account in order to process your payment. Now imagine if that information was being accessed by an identity thief's computer instead. Unfortunately, it happens thanks to a device known as a skimmer.


Skimmers are small card reader that can be handheld or attached to other devices. If your card is run through the skimmer, all of your account information (number, expiration date, etc.) is collected and can be used to make additional purchases, to create identical fake credit or debit cards, or to sell to other identity thieves.


Identity thieves use skimmers in two ways. The easiest way is to have someone working in a restaurant or other business in which the customer hands them their credit card. The skimmer can run the card through the business's reader and through the skimmer pretty easily and quickly. The customer gets his or her card back and doesn't worry about its security. The second way is to attach the skimmer to a real card reader, such as the ones found on gas pumps or some vending machines.


To protect yourself, always scan your credit or debit cards yourself whenever possible. If you can't, then watch the cashier very carefully. At restaurants, use cash instead of credit or debit cards so you don't have to worry about your card being taken out of your sight by the waiter. Also, never use a card reader that looks suspicious.


RFID Hacking


While skimming is still a more common high-tech method, RFID hacking can still be a threat with some types of credit cards. Many banks are issuing new cards that send out RF (radio frequency) signals so your card doesn't have to be swiped for payment processing. Sensors at the store pick up the signal and transmit the necessary information.


Credit card companies promise this technology is more secure than the old, card swiping method. However, research suggests otherwise. Researchers at the University of Massachusetts Amherst tried out some of the cards and found that several of the "encrypted" ones actually sent out the card number, cardholder's name, and card expiration date in plain text so it could easily be read.


That's good news for identity thieves. For less than $20, they can find RFID readers online. They can connect that reader to a laptop and while you're paying they can be retrieving all of your debit or credit information. They can even access your card's information when you're NOT paying because the radio frequency signal is always going.


So what can you do? For starters, don't use credit cards that include RFID chips. If your bank offers you one, decline. If you already have one, wrapping the card is foil or using a nickel-plated wallet can prevent the signal from being picked up when the card is not being used.
Or, I highly recommend getting an RFID blocking wallet.  You can get them pretty cheap too.  These will last much longer than just wrapping your cards in tin foil and they look pretty sharp too.


Other Tips


Here are a few other tips you should follow when it comes to credit card security:


  • Never write your pin number down and shred the number if it is mailed to you
  • Be careful not to let other people see your pin number when you are typing it
  • Only use your credit card for online purchases through secure websites and through trusted vendors
  • Do not let anyone else borrow your credit card for any reason - remember that friends and family members are often the culprits of identity theft
  • Always keep your credit card in view
  • Check your monthly credit card statements carefully to make sure no unauthorized transactions appear - the quicker you notice a problem the faster you can stop it from becoming a huge problem
  • Monitor your credit report. By law, you can receive a free copy of your credit reports from all three credit reporting bureaus (Equifax, Experian, and TransUnion) once per year. Plus, investing in a credit monitoring service can ensure that someone is always watching your report for suspicious activity.


By following these tips, you can reduce your risks.

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