Staying one step ahead of credit card frauds; Tips to keep your money safe

In the modern digital era, the problem of credit card fraud remains an enduring and dynamic challenge. Crafty techniques are utilized by cybercriminals to illicitly acquire access to confidential financial data, resulting in unauthorized transactions, identity theft, and financial harm for those affected. These criminals leverage phishing scams, data breaches, and malware to exploit weaknesses in both online and offline transactions.

Safeguarding oneself demands constant awareness, involving activities such as regularly overseeing accounts, immediately reporting any unusual transactions, employing robust and distinct passwords, and activating multi-factor authentication. Remaining informed about the latest fraud patterns, comprehending the strategies employed by fraudsters, and adopting careful online practices are essential elements in the ongoing fight against credit card fraud.

This significant problem impacts countless Americans annually, resulting in losses of around $12 billion in 2021 alone. These perpetrators can abscond with your credit card data or exploit it to establish new credit card accounts in your name. But this doesn’t mean that you cannot protect yourself against these cybercrimes.

Don’t fall prey to phishing attacks

If you come across websites offering steep discounts on high-end products, exercise caution. Velasquez cautions against deals that seem too good to be true, as they frequently lead individuals to unreliable sellers who attempt to manipulate their payment details.

Phishing attacks persist as the primary method through which individuals become victims of financial fraud. These attacks involve urgent emails, texts, or even WhatsApp messages that lure recipients into a trap. Fabara noted that simply clicking on a link could lead to trouble, redirecting users to malicious websites aiming to install malware on their devices. To protect yourself, it’s wise to refrain from clicking links in messages from unfamiliar sources.

Make sure every transaction alert reaches you

Credit card issuers and financial institutions have the capability to alert you through various channels, such as mobile apps, email, or text messages, whenever there is activity on any of your accounts.

Enabling these notifications grants you nearly real-time awareness of any suspicious or legitimate transaction, enabling you to promptly reach out to your provider in case of any unexpected activity. While the notifications might become slightly bothersome, it’s a minor inconvenience in comparison to the value of detecting fraudulent transactions early.

Limit the visibility of your credit cards

Completely abstaining from online shopping might not be a practical solution. Instead, employing tools to restrict the exposure of your credit card information is a more viable approach.

Certain credit card providers, like Capital One and Citi, provide “virtual” account numbers as an option. Utilizing these numbers during online transactions ensures that your actual credit card account number remains secure. Additionally, you may have the option to establish transaction limits for these virtual cards, adding an extra layer of protection and convenience.

Take your online security a notch higher

If safeguarding yourself against credit card fraud is a top priority, there are a couple of additional measures you might contemplate. While they may not suit everyone, these steps could bolster your overall financial safety. For instance, certain merchants have the capability to automatically update your Visa and Mastercard credit card on record for recurring payments whenever you receive a new card.

The convenience of such a service is apparent, yet Eva Velasquez from the Identity Theft Resource Center recounted a scenario in which a consumer encountered difficulty in avoiding suspicious recurring charges unless they chose to opt out of these systems. While experiences may differ, reaching out to your card issuer is an option if you prefer managing these payment updates on your own terms.

Some years back, Visa, Mastercard, American Express, and Discover collaboratively introduced an online payment solution named Click to Pay, aiming to streamline and fortify the checkout process. Transactions conducted through this tool are “tokenized,” employing temporary payment information distinct from your genuine credit card number. Exploring this option could be beneficial, though it does require opting in for each specific card you intend to link with it.

AI’s use in detecting fraudulent transactions

While fraudulent charges that appear on your credit card statement grab attention, numerous others are intercepted before even getting close. Besides the fraud safeguards provided by your credit card issuer, the payment networks overseen by Visa and Mastercard consistently enhance their mechanisms for detecting suspicious transactions as soon as they occur.

According to Paul Fabara, Visa’s chief risk officer, artificial intelligence has played a pivotal role in fraud detection for a significant period. He emphasizes its primary benefit in enabling the company to sift through the immense volume of daily transactions, leading to better identification of valid charges, even if they deviate from a cardholder’s usual patterns. Previously, the systems often rejected transactions that seemed suspicious. Now, AI assists Visa in efficiently handling legitimate charges and swiftly identifying fraudulent ones.

As these payment processors swiftly gather information about legitimate charges, the immense stream of daily transactions significantly influences the refinement of their risk assessment models.

“At a minimum we upgrade every year,” stated Chris Reid of Mastercard, alluding to the continuous improvement of transaction risk assessment models. Simultaneously, credit card companies and merchants are delving into more unconventional contextual cues, such as your phone-holding manner or typing rhythm, to accurately ascertain your identity, Reid further explained.

As advancements in preemptive detection of fraudulent transactions become increasingly refined, Eva Velasquez, president and CEO of the nonprofit Identity Theft Resource Center, noted that achieving complete protection against card fraud remains a challenging feat. Unfortunately, individuals often find themselves in the position of having to contact their card issuers post-incident, similar to my experience when addressing the suspicious hotel charge, in order to address the aftermath.