Prevent Credit Card Fraud – People Really Are Out to Get You

While doing some research, I discovered something pretty damn scary about credit card fraud. There are not only a few scammers here and there, and maybe some organized crime syndicates in Eastern Europe you have to worry about. There are thousands of people all over the world that are actively trying to find out how to pull credit card scams every day.

In a single day Google gets what I found to be a very surprising number of searches that pertain directly to the mechanics of perpetrating credit card fraud. For example, the search term “credit card generator downloads” got 873 searches, “credit card generator” got 407 searches, and the term “credit card reader / writer” got 1010 Google searches. This is in one, single, day! That means that on a single search engine (admittedly, the world's largest) for only three search terms on how to get the tools to perpetrate credit card fraud, there were 2,290 people actively trying to steal money from you, your credit card issuer, or from their perspective, preferably both. Perhaps I'm a bit naive, but I found that frightening.

Here are some things you can do as consumer to help prevent credit card fraud:
Sign your card card as soon as it arrives.

Don't keep your cards in your wallet. Keep them in a zippered compartment or a business card holder.

Record of your account numbers, their expiration dates, and the phone number and address of each company. Keep the record in a secure place.

Watch your credit card during a transaction, and get it back as soon as possible.
Void all incorrect receipts.

Destroy carbons created by non-electronic processing.
Compare your card receipts with billing statements.
Reconcile your card accounts monthly, just like your checking account.
Report any questionable charges promptly and in writing to the card issuer.
Notify card companies in advance when you change your address.
Merchants can help prevent credit card fraud on their end with some relatively simple strategies. As this sort of fraud is omnipresent and expensive for business owners, it's something they should be actively engaged in preventing. Here are some things that business owners can do to head off credit card fraud before it strikes.
Address Verification System (AVS) - This checks to determine if the card's billing address and the ship to address, or the address listed by the person trying to use the card match.
Checking ID – I'm always surprised by the number of employees that fail to perform this very simple step when I make a purchase. When I was a business owner this was grounds for disciplinary action. From the customer's perspective, it isn't a hassle. Most customers will be thankful that their ID was checked before their credit card was charged.
CVM – this is that extra 3 digit number on the back of the card. The trick is that this number is found nowhere in the mag strip information, so if the card is swiped by one of those fraudsters that steal your card by illicitly using a card scanner, they will not get the number. In theory, you actually have to have the card in your possession to have the code number. Most online merchants will demand it. If you aren't asked for it when you're placing an online order, shop elsewhere. If you're a business owner, you are crazy not to use this verification technique.
Payer authorization programs add an extra secret password that must match before the card will be approved. It does add an extra step in the checkout process, but if you, as a customer, don't have an extra few seconds to help prevent this growing problem, shame on you.
Hopefully these steps can help both merchants and consumers avaid credit card fraud.