Credit, debit card fraud can be a matter of life and death

Written by  //  September 13, 2011  //  Banking, Financial District  //  No comments

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Credit card fraud affects millions of consumers each year.

Last weekend, a woman was at home in Orlando, when she got a call from her bank warning her of a potentially fraudulent transaction involving her debit card. Someone had lifted the card number to go on a $150 shopping spree at a mega-retailer in Canóvanas, miles from where she was in Florida.

“I got a call from the bank to warn me about the transaction, and I thought they were calling to harass me about something,” the fraud victim, who is from Puerto Rico, told News is my Business. “I went online to check my statement and I saw the charge that was pending, for almost $150.”

While her story may have a happy ending, as the bank will likely reverse the transaction, the opposite is usually true for at least half of the more than 11 million U.S. adults who were victims of identity and credit card fraud in 2009, according to the Javelin Strategy & Research firm’s “Identity Fraud Survey Report” released last year.

Closer to home, where there are no concrete statistics to quantify the scope of credit and debit card fraud, the media reported on the case of an Humacao elderly woman who was killed in her home by a man who allegedly broke in to steal her ATM card. It was reported that he was friends with a cashier at a fast-food restaurant who had memorized and given him the victim’s PIN code.

“These things are tragic and again bring up the need to stress the importance of protecting your financial identity at points of sale and retail establishments,” said Arturo Carrión, executive vice president of the Puerto Rico Bankers Association.

Arturo Carrión

“When using your debit card, we recommend that you protect your password using your hand and your body as a shield while entering the numbers on the keypad. Always take your receipt and do not drop it on the floor or in a nearby trash can. Do not write your password anywhere, including receipts or on the card itself,” Carrión said.

The local trade group representing the island’s commercial banks, also recommended that consumers never give their personal identification code to anyone, and always enter it themselves.

“When using your debit card to pay in a store, make sure you get your card back and that no one is watching you when entering your PIN,” Carrión said, lamenting last week’s violent incident.  “When you use your credit card, always keep control of it, never lose sight of it. ”

Astounding statistics
The Javelin Strategy & Research findings show that the number of U.S. identity fraud victims rose 12 percent to 11.1 million adults last year, the highest level since the survey began in 2003. Meanwhile, the total annual fraud amount jumped just 7 percent to $48 billion, which the study said is directly linked to “consumers and businesses detecting and resolving fraud more quickly.”

Women were 26 percent more likely to be victims of identity fraud than men in 2008, with 71 percent of fraud incidents “occurring in less than one week from when the data was first stolen.”

Lost or stolen wallets, checkbooks and credit and debit cards made up 43 percent of all ID theft incidents in which the “method of access” was known according to the study which also pointed out that average fraud resolution time dropped 30 percent to 21 hours. That reaction/resolution time is likely less now, as banks take a more proactive stance to confirm unlikely transactions with cardholders almost as soon as they happen.

“Nearly half of fraud victims now file police reports, resulting in double the reported arrests, triple the prosecutions and double the percentage of convictions in 2009,” Javelin said.

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