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Understanding Insurance

Credit Card Fraud vs. Identity Theft

Chances are you know someone who has fallen victim to credit card fraud, or you yourself have experienced it. Credit card fraud is a common form of identity theft, but there are important distinctions between the two — and understanding these differences can better prepare you for preventing your credit card information from being stolen. We’ve highlighted the differences between identity theft, how to protect your credit cards and what to do if you become a victim of credit card fraud. Take a look and gain peace of mind you’re doing what you can to keep your information safe.

What Is Credit Card Fraud?

Credit card fraud occurs when someone steals your credit card information and uses it to make a purchase without your permission. This can happen in several ways, including someone stealing your actual credit card number by taking the card from you, or when you give your card to someone else, such as a waiter or bartender. It can also occur if the thief gets ahold of your credit card information elsewhere, such as online. Common ways this happens is when hackers steal credit card information stored by online retailers via a data breach, or being tricked into giving away your information by a fraudulent website.

What Is Identity Theft?

Identity theft is a crime where someone takes your personal or financial information and uses it without your permission. This crime encompasses many different types of information and ways it can be stolen, including credit card fraud. Other common forms of identity theft include driver's license identity theft, when a criminal sells this information or uses it to make a fake ID, and social security identity theft, which can compromise your tax information.

How to Protect your Credit Card from Identity Theft

As with the other many forms of identity theft, there are steps you can take to protect yourself from credit card fraud. These precautions can protect your credit cards from identity theft and ensure you are the only one making purchases with your cards.

1. Protect your card in public

Using common sense and a couple safety measures can ensure your credit card isn’t stolen when it’s on you. Always keep your cards with you and never leave them out in the open, even for a few minutes. Avoid giving your credit card information verbally, especially at locations where people can hear you such as stores or restaurants.

2. Avoid online scams

When shopping online, it can sometimes be a challenge to know if an email or store that requests your credit card information is legitimate or not, so it’s best to be cautious. Avoid phishing scams by never clicking on suspicious emails, text messages or pop-up messages. If something looks or sounds questionable, air on the side of caution and keep your card in your wallet.

3. Enroll in credit monitoring

This is a service where a security group provides continued surveillance of your credit reports, alerting you if your account has been updated or a new credit account has been opened in your name. American Family Insurance partners with CyberScout to offer credit monitoring services that provide 24/7 protection and specialist-level assistance with CyberScout’s fraud experts.

4. Purchase ID fraud protection

Being proactive is an effective way to protect yourself from credit card fraud, and services that specialize in protecting your ID can help to prevent fraud from occurring. Part of American Family’s partnership with CyberScout is offering a theft protection service called LifeStages. This service provides educational resources, access to a CyberScout fraud specialist and other identity theft services such as document replacement and more.

What to Do If You Become a Victim of Credit Card Fraud

If you notice suspicious activity or charges to your credit card that you didn’t make, you may be victim of credit card fraud. Don’t worry, there are immediate steps you can take to ensure your identity and money hasn’t been compromised.

1. Contact your credit card company or bank

Your first step should be calling your credit card company or bank. This can initiate confirming that there is suspicious activity on your card, cancelling your card and being issued a new card. Many credit card companies now also offer mobile apps or text message notifications when new charges are made to your card. These can be effective tools to see instantly when unauthorized charges to your account are made.

2. Change your PIN number and passwords

While your credit card company can cancel your compromised card, it’s best to proceed with caution. Change the PIN number to your card and any online passwords for sites you’d shop on using that card. This can prevent the thief from making additional purchases if the card has not yet been cancelled.

3. Monitor your account activity

Over the next few weeks, keep a close eye on your bank account and credit card statements. Thankfully most credit cards have zero-liability policies that can negate charges made to your compromised card, but in the meantime alert your credit card company or bank if suspicious charges appear after you report your compromised card.

4. Prevent new credit cards from being opened in your name

If credit card fraud occurs, one way the thief may steal your identity is by starting a new credit card using your name. To prevent this from happening, contact the three major credit reporting agencies (Equifax, Experian and TransUnion) and inform them that your credit card account has been compromised. American Family Insurance’s Identity Fraud Expense Endorsement is a service that can help you through this process and provide coverage for expenses related to restoring your identity.

By better understanding credit card fraud and identity theft, the better you can protect yourself from potential thieves and ensure your money is secure.

Learn more about identity theft and how to protect yourself and your loved ones.

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