Avoiding ID Theft and Credit Card Fraud

Credit fraud is the theft of personal information by individual(s) who use it for financial gain. Fraud can cause great damage to your credit, so it is very important to carefully guard against this crime.

The most common form of credit fraud today is identity theft. It is a fairly easy crime to commit if proper measures are not taken. In many cases a person simply needs to obtain an individual's credit card or bank account number. Other times they will also collect a person's expiration date, social security number and billing address. Some of the more common ways that this is accomplished is through obtaining statements or receipts from household garbage, through theft of a wallet, internet/telephone scams or through the theft of mail.

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Once the account numbers are obtained it is relatively easy to submit a change of address notice and request new credit or credit cards. Another common ploy is to steal credit card offers from the garbage or mailbox. They simply fill in the blanks and have the card sent to a different address.

To prevent this fraud from occurring there are several steps that can be taken.

Shred documents that contain important information. This may seem like a lot of work, but the prevention of credit fraud will save you a lot of work in the long run.
Only carry a limited amount of information in your wallet or purse. Leave your Social Security card, your extra credit cards, or any other "extra" information in a safe place.
Prevent the majority of credit card offers from being mailed to your house. You can accomplish this by dialing 1-888-5OPT-OUT. This will prevent the Credit Bureaus from releasing pre-screening information. (used by the credit card companies)
Order a credit report on an annual basis to make sure all the information looks correct. The cost is minimal and is well worth it.
Make your security passwords a little more difficult for someone to figure out.
Never give out your social security number unless it is absolutely necessary.
Contact your creditor if you do not receive your statement in a timely manner. It is better to be safe than sorry, so verify that it was sent. If you have not received it within a reasonable amount of time it is possible that it was stolen, and appropriate measures should be taken.

At times the fraud will occur even if precautions have been taken. If you think the situation was related to a business scam report it to the National Fraud Information Center. 1-800-876-7060. With any credit fraud it is important to notify your creditors immediately. Often times credit cards only hold you responsible for $50. Try to obtain a statement in writing stating that you are not responsible from the remainder of the charges. Also, obtain a copy of your credit report to check for the extent of your fraud. In many cases you may want to immediately cancel your account and/or change all relevant passwords.

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About the author:

Mark Carney is a professional consultant with First American Debt Consolidation and Loans, a debt consolidation service specializing in financial education, credit counseling, and debt management services nationwide.