Everything you need to know to protect yourself from credit card fraud
Credit cards have become an indispensable part of our life. They offer great convenience and it is usually better to pay with a card rather than use cash. You gain many benefits including the ability to pay several weeks after you actually conduct the transaction. You could also earn various types of rewards for using your card or save money with a cash back offer.
But there is a flip side to the advantages that credit cards provide – they are vulnerable to fraud. According to a survey by ACI, a firm that provides electronic payments solutions to financial institutions, 36% of Singapore’s cardholders were affected by fraud in 2016. That’s an increase of 8% in the 2014-16 period.
At a global level, credit card data breaches affect millions of cardholders.
Source – WalletHub
What if your credit card gets stolen? What should you do if you suspect that you have become a victim of identity theft and that someone has stolen your card number and password?
Here are some of the steps that you could take.
Inform your card issuer
It is absolutely essential that you tell your bank that your card has been stolen. They will take immediate steps to block its usage. This could minimise the size of the fraud.
What if you don’t notice that your card is missing and come to know about the theft many days later? It is still your duty to inform the card issuer immediately. You will need to provide the bank with complete details of how the card fell into the wrong hands.
While it is likely that you will not be liable for its fraudulent use, the bank will need to be convinced that you acted responsibly in keeping your card safe. If it is proved that you were negligent, you could be saddled with a large credit card bill for items that you did not purchase.
Understand how your liability works
The bank would usually limit the amount that you would have to bear for fraudulent transactions. Consider the practice followed by OCBC Bank. They have capped your liability at S$100. Of course, any usage after you report the theft to the bank is not your liability.
But there could be circumstances where you could be responsible for a much greater amount. Say, you wrote your PIN on a piece of paper and stored it along with your card in your wallet. If your pocket gets picked and your wallet goes missing, the amount spent using your card could be payable by you.
Why should you bear the responsibility of the fraudulent use of your card when it was stolen from you? According to rules established by the Association of Banks in Singapore, storing your PIN along with your card amounts to negligence.
Leaving your wallet in a public place can also be considered negligence. Cardholders are expected to exercise a certain degree of care when storing their cards. A good principle to follow is to treat your credit cards with the same degree of care as you would exercise for storing your cash.
Inform the police
Fraudulent transactions could also be done by using your credit card details without actually stealing the physical card.
In this situation, you may first come to know about the theft when you receive your statement from the bank. What should you do?
Of course, the first step that you should take is to inform the card issuer. You should also lodge a report at the nearest Neighbourhood Police Centre (NPC).
It is useful to remember that your liability to the bank for fraudulent use of your card is not connected with the police report. The bank will charge you based on the terms and conditions mentioned in the card member agreement. You do not absolve yourself of responsibility by informing the police.
What if you think the bank is billing you unfairly?
At times, the card issuer may continue to charge you for expenditure that you did not incur. They may even keep adding interest to your unpaid bill every month. What can you do in such a situation?
The first step that you should take is to inform the bank in writing about how the fraud occurred. Give complete details, including timelines and supporting documents, if there are any. If this does not have the desired effect, you can approach the Financial Industry Disputes Resolution Centre (FIDReC).
This institution mediates between the cardholder and the bank and tries to settle the matter. There is no charge for filing a complaint.
Remain vigilant about credit card fraud
It is necessary to keep a close check on your card statements. If you use your credit card extensively and make dozens of transactions in a month, someone with your card details could carry out transactions that you may not even notice.
Checking all your card statements becomes even more important when one of your cards is stolen. If one card’s details have been compromised, it is likely that the theft could affect your other cards too. Consider replacing your cards or changing your PIN.
With credit card fraud becoming common, it is imperative that you remain alert at all times.