Credit card fraud is an insidious threat to consumers and companies alike. Though many companies offer credit cards to those who want better security, it’s still important that you understand how easily credit cards can be stolen. Mark Hauser discusses the prevalence of credit card fraud and offers tips on staying protected in the modern age.
Fraudulent transactions with a stolen or compromised credit card are now one of our most prevalent consumer-facing crimes, according to this article by CreditCards.com CEO and founder Mark Hauser. As a result, it’s important to understand how credit card theft works.
Payment methods are increasingly used daily, whether cash is exchanged for goods or services or travellers receive money from their airlines when booking a flight. The problem is that many payment methods make it easy for someone to steal your identity and use your credit card number.
When you swipe at the grocery store, use your credit card to pay for an airline ticket, or enter a membership number at shopping sites like Groupon, you’re handing over sensitive information about how well you can spend money and what other people know about your habits.
And the payment networks that have long been in place for security are now making matters worse. For example, ACI Worldwide, which processes credit card transactions for many retailers, had a security breach in September 2012. By that time, its systems were already outdated. According to Mark Hauser, ACI’s network links to more than 30 million point-of-sale terminals. An estimated 500 U.S. financial institutions use it to handle nearly $2 trillion in transactions yearly.
Once the hackers can access your credit card information, they can use it immediately or sell it online on a black market. Identity theft experts say any data breach is problematic, but thieves usually go after high-value accounts whose cardholders are likely to pay back fraudulent charges. That’s why some banks have implemented features that lock the account if too many false charges are made.