Credit Cards

Never Again: Why Credit Card Fraud Keeps Happening to You

Why does credit card fraud keep happening? What do I do now? And how can I prevent credit card fraud in the future as well as identity theft?
A woman looks at her phone and credit card as she deals with credit card fraud
By Erik J. Martin
Updated on: March 22nd, 2022

You’ve had your credit card compromised in the past. Fortunately, all fraudulent charges were reversed, and the issuer sent you a new card. But now you’ve experienced credit card fraud again, despite still having your card in hand. You ask yourself: Why does this keep happening? What do I do now? And how can I prevent credit card fraud in the future as well as identity theft?

Don’t panic. The same steps you followed when your earlier credit card number was stolen apply now. And know that you’re not alone. The FTC received 5.7 million identity theft and fraud reports in 2021, which is almost a million more than they received in 2020. A lot of people are victims of repeat credit card fraud, but by following best practices, you can reduce your risks.

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What to Do Right Now If You’ve Been the Victim of Fraud

If you fear that your credit card info has been stolen, you need to take action steps immediately.

Step 1

Contact your credit card issuer (Visa, Mastercard, etc.). Review any recent charges with an agent on the phone, and identify any fraudulent purchases. Even if you don’t spot any unauthorized charges, but suspect that your card has been compromised in any way, notify the issuer. They can put a temporary freeze on the card if you’re not sure.

Better yet, they can cancel the card and issue you a fresh one with new numbers. In this instance, be sure to physically destroy your canceled card. Use a paper shredder or cut it up finely with a strong pair of scissors.

Step 2

Next, review your free annual credit report — one for each of the three credit bureaus (Experian, TransUnion, and Equifax). Check your credit reports very carefully. Make a detailed note of any purchase, account, or information you aren’t responsible for. If you discover fraud, place a fraud alert with one of the three credit bureaus. This will prevent an identity thief from opening new accounts using your information. Here’s the contact information:

Step 3

If you believe you’re the victim of identity theft, contact the Federal Trade Commission at IdentityTheft.gov or 877-438-4338. The FTC will help you create an identity theft report and recovery plan. This report can serve as proof to businesses that your identity was stolen.

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Why Repeat Credit Card Fraud Happens

In spite of your best efforts, some bad actor has found a way to infiltrate another one of your credit cards. There are plenty of reasons why this can happen.

First, it could be that your credit card was physically compromised. For example, a server at a restaurant or clerk at a store you visited took a photo of or copied the information on your card and used it to make a later purchase.

Or you could be the victim of a skimmer scam. This happens when thieves sneakily place a skimmer device on a credit card reader attached to an ATM or gas station pump. The skimmer gathers credit card data; the crooks later collect the skimmer and use your information.

Instead, perhaps your computer, smartphone, or other device has been hacked. This can happen when your device is infected with malware that allows a cybercriminal to spy on your online financial transactions. Another hacking method is phishing, whereby a phony text message, bogus website, or fake email is used to fool you into ultimately revealing your credit card number.

Chances are, however, that a data breach may be at fault here. This occurs when your credit card information is on file with a particular company and hackers infiltrate their servers, exposing numerous accounts — including yours. Data breaches account for a big chunk of credit card fraud. In 2021, over 294 million people had their credit, banking, or financial records compromised in a data breach.

Related: How to Repair Your Credit After Identity Theft

How to Prevent Future Credit Card Fraud

You can avoid credit card fraud online and in person by taking the time to protect your personal information and knowing what to look out for.

Preventing fraud online

To help ensure credit card fraud doesn’t happen again, try these tips online:

  1. Research an e-commerce site carefully before doing business with it.
  2. For online merchants, check for an HTTPS secure connection and a seal of approval from the Better Business Bureau, TRUSTe, or other trusted organization.
  3. Install and use antivirus software regularly to remove malware.
  4. Use good passwords, change them regularly, and rely on two-factor authentication for your online accounts and apps.
  5. Shred all papers you plan to discard that contain sensitive account information.
  6. Don’t save your credit card number to your online accounts.
  7. Don’t purchase things online using a public Wi-Fi network.
  8. Be cautious before clicking on any suspicious links or opening iffy attachments in an email.

Preventing fraud in person

Use these tips when using your card at businesses and services in person:

  1. Avoid giving your account number to anyone on the phone unless you initiated the call to a company you trust.
  2. Watch your card during a transaction at a store. Be sure to get it back before you leave.
  3. Keep your credit cards separate from your wallet. This can reduce your liability if someone steals your purse or wallet.
  4. Look closely at the card slot at an ATM or gas station pump machine; test to see that the slot isn’t loose.
  5. Avoid signing a blank receipt; if you notice any blank spaces above the total, draw a line through them.

The fact is that all the government agencies and privacy laws won’t protect you if you don’t take some responsibility and look after your own financial affairs. But exercising a little caution can go a long way toward preventing credit card fraud.

Frequently Asked Questions (FAQs)

Can credit card fraud be traced?

Credit card data includes when the card was last used and for how much. There have been cases of card owners seeing a fraudulent charge come through and making it to the location where the fraud occurs while the thief is still there, but in the vast majority of cases, by the time the fraud is discovered, that thief is long gone. If you cancel the card and the thief tries to use it, the card will be rejected, but it won’t go much further than that.

In most jurisdictions, police don’t have the hours to prosecute credit card fraud. However, if someone you know has taken your card and used it repeatedly, you can report it to the police and they will investigate the case depending on the amount of money involved.

How can I report credit card fraud?

If the fraud was in person, contact your local police. Whether the fraud was in person or online, you can also report it to the Federal Trade Commission.

What if someone steals my card and charges hundreds of dollars with it?

The good news in all of this is that according to law, you are only liable for the first $50 of any charges to your credit card that are fraudulent.