Both large and small businesses rely on credit card for purchases just like consumers do. In the last few weeks, three of our employees’ business credit cards were compromised. Federal laws protect you from paying fraudulent charges, but you have to be diligent about spotting them to minimize the damage.
Theft of both a credit card number and security code is very common. Account numbers can be skimmed at a point of sale either by employees or implanted card readers; stolen during security breaches of your favorite stores or online shopping sites, or by a keylogger malware installed on your computer. Once obtained, thieves need very little additional information to use your credit card—much of it can be found in public records or online.
Unfortunately, if you use credit cards, there is no fail-safe way to prevent your credit card from being stolen. If there is one piece of advice I could give regarding credit card fraud, it is “Check your statements.” You need to pay close attention to the charges and location where they were made. Ideally, you should monitor your statement between billing cycles by logging onto your account weekly to verify your purchases. You generally have 90 days to dispute the charges without question.
A recent survey by CreditCards.com found one in three credit card users will use a credit or debit card for a $5 purchase. Basically, the survey concluded if you are under the age of 50, are employed full time and earn between $50,000 and $74,900, you are just as comfortable using plastic for a $5 purchase as cash. This may contribute to the reason thieves will test stolen credit card numbers with insignificant purchases, generally around $3. Crooks are counting on you either not paying attention to your statement or not taking the time to dispute such a nominal charge.
To make matters even worse, fraudsters are making small donations to well-known charities in your name. Are you really going to dispute a $3 donation to a legitimate charity? Unfortunately, like the small charges they hope will go unnoticed, these seemingly innocuous donations are just the tip of iceberg. If you allow the charge to go through, thieves can easily run up more charges or sell your card number on the black market.
According to a report by the Bureau of Justice Statistics, 45% of those who have experienced unauthorized use of an existing financial account were notified by the financial institution. While some issuing banks are diligent about notifying their customers of suspicious activity, if you suspect a problem, you need to contact your credit card company or bank immediately.
Once reported, you should closely monitor your credit report. You may also consider placing a fraud alert on your credit file to minimize the chance thieves will try to establish new credit lines in your name. While most victims of credit card fraud suffer little more than the inconvenience of having to replace their credit cards, you want to avoid damage to your credit history.
If you have questions regarding your credit report the experts at Henssler Financial will be glad to help: