Demystifying Credit Fraud

People are more worried about credit fraud these days than ever before; and rightly so! Credit fraud is one of those crimes that can affect your finances, your employment and even your ability to get loans or lines of credit. With all of the bad effects of credit fraud in mind, it is easy to understand why people are trying to find more straightforward information about this crime. You cannot fight something that you don’t understand. With that in mind, this article was created to help you better understand credit fraud, how it can affect you and what you can do to keep yourself and your family protected.

Official statistics indicate that credit and identity fraud are a small part of all the credit card spending that takes place in this country every year. The losses, however, that are associated to credit fraud can be absolutely devastating. If you have the misfortune of being a victim of credit fraud, you may find yourself angry, overwhelmed and spending inordinate amounts of time trying to get things sorted out and back to normal. Even if you are not a direct victim of credit fraud, it is important to know that EVERYONE pays the price for these types of crimes. Higher prices, inconvenience and higher interest rates are just a few of the ways that credit fraud affects everyone.

What are the Different Types of Credit Fraud?

Credit fraud is somewhat of a blanket term that covers the use of credit cards to pay for things and then to avoid payment. Credit fraud can include the following:

  • Identity Assumption – The long term use of another person’s identification information for fraudulent charging activities.
  • Fraud Spree – Making unauthorized charges on someone else’s credit card account.
  • Identify Theft – Using another person’s personal identification data to open credit cards or to commit any other type of criminal/fraudulent activity.

How Does Someone Commit Credit Fraud?

Here are some of the methods that scammers use to commit these types of crimes:

  • Using a credit card that has been stolen or lost.
  • Stealing credit cards or credit applications from mailboxes or residential locations.
  • Stealing account information from your trash.
  • Gaining unauthorized access to your personal records.
  • Falsely soliciting personal information via telephone calls.

How to Know When you are a Credit Fraud Victim

Here are some of the symptoms that may indicate that you are the victim of credit fraud:

  • You pull your credit report and notice accounts that you never opened.
  • Bills arrive for purchases that you have not made.
  • Collections agencies start calling you for not making payments on credit card accounts.
  • Your credit card statement lists purchases you did not authorize.

Protect Yourself from Credit Fraud

You now know a bit more about credit fraud. It is important to take steps to keep yourself protected. Be sure to pull your credit report on a regular basis. This is a step that you can take to make sure nothing is amiss with your credit. You should also avoid carrying around credit cards that you don’t use that often. If you don’t have a card on you, you can’t lose it or have it stolen. It is also a good idea to simply pay cash when possible. It may seem like a hassle, but the less you use your plastic, the less susceptible you will be to the next data breach that happens, similar to what happened at Target stores a few years ago. Stay on top of your accounts, your credit report and be aware of any phishing scams online. By doing so, you will be proactively doing what you can to avoid credit fraud.

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