According to credit fraud statistics, credit fraud and identity theft are on the increase in South Africa. Losses due to defaulting on payments far exceed those caused by fraud. However, if credit fraud or identity theft happens to you, it can be overwhelming. Victims may be protected financially, but they are forced to experience major inconvenience. Ultimately, we all pay for credit card fraud in terms of higher prices, higher interest rates, and extra inconvenience. In essence, you should never say that it will never happen to you. However, there are certainly more groups of people that are more susceptible to credit fraud. How you interact on social networks, use your mobile device and pay for things can make you more susceptible to identity theft. “We have a society that is so conditioned to share information that it can get into the wrong hands and wreak havoc on our identities,” says Joe Mason, senior vice president of Intersections Inc., a provider of identity protection services.
Social media users are at the mercy of ID fraudsters. You wouldn’t think of posting your bank account information on a social network. The same kind of privacy should apply to the other key bits of your identity. To protect yourself, be guarded about what you reveal about yourself and your family, and think about who will be reading your updates, comments and tweets.
We all stopped carrying cash as a means of protecting ourselves, but the plastic cards that we cling to are also making us victims. Not only does a stolen credit or debit card put you at risk of losing valuable money, it also puts you at risk of identity theft. Having your card in their possession gives them access to vital information about yourself. Try to avoid relying on debit cards. They don’t have the extra layers of fraud protection you get with credit cards. Avoid making small and frequent purchases. Do not store a written-down PIN next to the card and never carry around too many cards.
We also need to be just as cautious when it comes to something else we keep on our personal possession at all times – your cellphone. Only about one-third of people actually put a password on their phone and nearly every person stores sensitive financial information on their phone. Many smartphone users also don’t give a second thought to using public wireless hot spots. Sometimes those are set up by criminals who use free Wi-Fi to capture sensitive data and hack into mobile devices. Techco provides a list of useful apps that people can install on their phone. These apps can protect you from identity theft. Greenbot suggests some essential apps to install on your phone that will actually secure it if and when it gets stolen.
Types of Credit Fraud
Credit fraud is a broad term for the use of a credit card (or any comparable type of credit) to buy goods or services with the intention of evading payment. Credit fraud includes:
Identity theft:
The unauthorised use of personal identification information to commit credit fraud or other crimes. It is really nothing new. It’s been around since time began, but it’s taken on a new dimension in the age of technology. People can do personal business remotely from a computer without ever showing their faces. This ultimately means that criminals can also hide their faces behind their computers and pretend to be you.
Identity assumption:
Long-term victimisation of identification information. The worst thing about being an identity theft victim is the cost. In most cases, it takes such a long time to realise that you have become a victim. By that time multiple things can go wrong before you have a chance to correct them. You might start noticing that you have a lowered credit score, criminal charges and a maxed out credit card to deal with. It takes hours to deal with each of these issues and it damages your reputation along the way. In the end, becoming an identity theft victim is a major hassle and is something that can take years to fully recover from.
Fraud spree:
Unauthorised charges on existing accounts. In today’s marketplace, consumers commonly order goods and services through the internet and via mail. In these instances, the merchant will not be able to tell if the purchase is actually coming from you – the cardholder. As long as they have your card details, criminals can buy pretty much anything and everything at your expense.
Sources of Credit Fraud
Just as there are various types of credit fraud, there also are different ways that credit thieves gather your personal information. You need to make sure you are a security guard protecting these aspects of your life:
- Using lost or stolen credit cards
- Stealing from your mailbox
- Looking over your shoulder during transactions
- Going through your trash
- Sending unsolicited email
- Making false telephone solicitations
- Looking at personnel records
Discovering Fraud
There are several warning signs that credit fraud may be occurring. When these signs show up on your radar, make sure you do some detective work. Be on the lookout for:
- Your credit report contains inquiries or information about accounts that you did not open
- Strange charges show up on billing statements
- Bills arrive from unknown or unfamiliar sources
- You receive calls from creditors or collection agencies
If you suspect you have become a victim of identity theft, check your credit report. You can check out your credit report on My Credit Now.
The Moral of the Story
If you can understand the mind of a criminal and the ways in which they execute their crimes; you can avoid becoming a victim and actually be your own hero. You can save yourself from credit fraud. The Banking Association South Africa provides more information about credit theft and tips on how to avoid credit theft.
