Filed under: Fraud Disputes & Litigation

This week’s blog post is courtesy of CN alum John Steinhoff, who now serves as vice president of consulting at Ascendent Advisory Group.

One recent weekend, I was relaxing with my morning coffee, reading the newspaper when the phone rang. My credit card company called and asked about some recent “suspicious” activity on my credit card. Being a certified fraud examiner and avid reader of anything fraud related, I’m aware of many credit card scams, so I was very cautious of this call. After a 5-minute discussion and many questions, I realized this was the real thing. Sure enough, someone used my credit card to purchase $200 at a tobacco shop in Pennsylvania. After another 10 minutes they cancelled my card and issued me another one.

I’m reminded of a recent scam where credit card companies call and say they believe there has been some suspicious activity on your card and they just need to verify some data. They recite your full name, mailing address, account number, etc. All seems good right?

The real scam comes when they ask you for the CVV code on the back of your card. This is a 3- or 4-digit number that verifies you have the card in your possession and is one more security verification. This number is mainly used for merchants when you make a purchase over the phone or the internet. As many articles point out, the credit companies have this number and there is no need for you to provide it. By providing this number, you have just given the fraudster the last bit of information they need to perfect their scam.

Although credit card fraud gets the most press, debit card fraud is just as common. Last week FICO, the leading credit reporting agency in the U.S., released a report about debt card compromises at ATMs. Its report states that from January 1 to April 9, fraud jumped 174% at ATMs located on bank property, while fraud at nonbank machines increased 317%! So how does this happen?

The most common debit card fraud involves card readers, a small device placed over the slot where you insert your card that records your card information. The fraudster then takes the device and creates credit cards using your information. One simple method for preventing this is requesting an account balance before you take cash out and after you take cash out. If the balances don’t make sense or add up, you should immediately contact your bank. Another precaution is inspecting the ATM to make sure there are no unusual looking devises or equipment over the card slot.

Unfortunately, it’s not a question of “if” you’ll be a victim of identity theft, but “when.” Here are some easy steps to help protect your credit:

  • Check your credit report regularly. You can go to AnnualCreditReport.com, a site created by the Federal Trade Commission.
  • Review your credit card statement in detail – look for unusual transactions or purchases you didn’t make.
  • Only use reputable and secure online sites to purchase goods.
  • Make sure you know where your credit cards are – we often have more than one card. If you don’t carry them in your wallet or purse make sure you keep them in a secure, locked area.

By John Steinhoff, CPA, CFE
Vice President of Consulting, Ascendent Advisory Group.
Reach John at john@ascendantadvisory.com.

© Clark Nuber PS and Focus on Fraud, 2015. Unauthorized use and/or duplication of this material without express and written permission from this blog’s author and/or owner is strictly prohibited. Excerpts and links may be used, provided that full and clear credit is given to Clark Nuber PS and Focus on Fraud with appropriate and specific direction to the original content.

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