Credit Card Fraud During The Holidays:

5 ways to protect yourself

December 22, 2021

The holiday season is here, and according to the National Retail Federation, Americans are planning to spend just under $1,000 on gifts this year, with a majority of shoppers choosing to buy said items online with the help of a credit card. And according to a Morning Consult survey, 1 in 5 shoppers will make use of the feature “buy now, pay later”, a feature that allows you to pay for your purchases over a number of months with no interest.

It is extremely important to be aware of the risks that come with the simplicity of online payment methods. Protecting your identity and credit is imperative, and today we will take a look at five measures you can implement in order to protect yourself.

Credit over debit

Credit cards are often safer than debit cards as you can dispute charges easily if you are billed twice or did not receive items. as well as reducing losses in case the card gets stolen or lost. Debit cards on the other hand have some consumer protections, but resolving these issues will often be harder and take longer. 

Experts also urge consumers to look out for red flags when shopping online.

If online stores or sellers say they only accept payment by gift cards, money transfers (Western Union, MoneyGram) or cryptocurrency, the Federal Trade Commission warns that’s definitely a red flag. It’s nearly impossible to trace and reverse those payments

- CNBC

Virtual cards and mobile wallets

Apple Pay, Google Play, Samsung Pay or PayPal, also known as digital wallets, will use “tokens” instead of your primary account number when making purchases. This allows you to not have to carry cash or even your credit cards.

Some banks also offer “virtual card numbers,” unique, randomly generated numbers that are used only once. This allows your account number to remain hidden and safe.

Beware of “buy now, pay later”

These days you might have noticed that many online retailers offer this feature. This service allows you to purchase and receive products upfront while breaking up the payments into smaller, interest free monthly installments. This all sounds great on paper, however, if the website you purchased from turns out to be fake or faulty, you do not get the same dispute power as with credit cards. Chances are the consumer will still be held financially accountable.

The possibility of missing a payment has bigger consequences as well, as you will be fined, and according to executive director of the Consumer Federation of America, Jack Gillis, these fines can cost you a lot more than credit if you had purchased with a credit card instead.

Beware of social media scams

The Better Business Bureau urges consumers to be careful when you scroll down social media, as scammers will offer attractive deals through these channels. There are a few things to look out for that might help you identify whether an online business is legitimate or not: Research the website before making a purchase, check the URL for errors, and look out for an “s”. Only trust websites that start with “https” as the “s” indicates the website is secure, you will also find a lock icon on the address bar.

You were scammed – now what?

Even if you took all the safety measures you could, falling victim to a scam is a possibility. If you were a victim of fraud, the main agency that collects and handles scam reports is the FTC. You can file a report online or by phone. If your identity has been stolen, you need to go to https://www.identitytheft.gov and file a report.

You can also place a fraud alert in your credit report, you can contact Experian, Equifax or Transunion.

Find out what other measures you can take to protect yourself from fraud at the federal government’s Consumer Financial Protection Bureau and the Better Business Bureau.

Want to learn more? check out CNBC’s full write up here.

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