2. “How Often Should You Check Your Credit Report and Why It Matters”

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Understanding Credit Card Fraud and How to Prevent It

What Is Credit Card Fraud?

Credit card fraud is a prevalent issue, as highlighted by the Federal Trade Commission (FTC). In the first half of 2024 alone, over 214,000 cases were reported. While many credit cards offer zero liability protection, meaning cardholders aren’t responsible for unauthorized transactions, the inconvenience and cost to businesses make it essential to take preventive measures.

Types of Credit Card Fraud

Credit card fraud can take several forms, including:

• First-party fraud: When someone uses a credit card without intending to repay the debt or claims a legitimate purchase was fraudulent.
• New account fraud: When someone applies for a new credit card using stolen personal information.
• Existing account fraud: When someone uses an existing credit card account without the cardholder’s permission.

The FTC primarily focuses on new and existing account fraud, classifying these as types of identity theft.

How Credit Card Fraud Happens

Criminals employ various methods to obtain account information or fraudulently open new credit cards, such as:

• Stealing cards: Physically stealing a credit card and using it before the cardholder can report it.
• Card skimming: Installing devices that copy card information during a transaction.
• Phishing: Sending emails to trick individuals into sharing their login credentials or credit card information.
• Account takeover: Gaining access to online accounts to add cards to digital wallets or change account information.
• Using stolen card info: Using stolen or guessed credit card information to create cloned cards or shop online.
• Identity theft: Using stolen personal information to apply for credit cards or creating synthetic identities.

Credit Card Fraud Statistics

The FTC collects data from consumers and contributors like the AARP Fraud Watch Network. Key findings include:

• A 5% decrease in credit card fraud reports from 2022 to 2023, with 426,045 complaints in 2023.
• A further 4.5% decrease in the first half of 2024, with 214,607 complaints.

Fraud reports are highest among individuals aged 20 to 50, peaking for those aged 30 to 39.

How to Avoid Credit Card Fraud

While credit cards are generally safe due to zero liability protection, taking additional steps can help prevent fraud:

• Don’t share information: Avoid responding to unsolicited texts or emails asking for credit card or personal information.
• Secure online accounts: Use unique passwords and enable multifactor authentication.
• Be cautious online: Verify the legitimacy of online stores before entering card information.
• Use contactless payments: Tap your card or use a digital wallet to avoid skimming devices.
• Update devices: Keep your devices updated with the latest security patches.
• Add a security freeze: Freeze your credit reports to prevent unauthorized new accounts.

Monitor Your Accounts and Credit Report

Regularly monitoring your credit reports can help you quickly identify and address credit card fraud. Set up alerts for new credit applications or transactions to stay informed.

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