Recent statistics show that the prevalence of credit card theft in this world has not changed, but the way by which thieves are acquiring this information and using it is evolving.
In 2010 securities thieves breached more than half a million Canadian credit card accounts, stealing approximately $366 million. This fact, as reported by the Royal Canadian Mounted Police, may be alarming but what is most interesting is that thieves were able to steal this money without actually possessing physical credit cards. Instead, they were able to use credit card numbers and other relevant information, which they acquired through various means of deception.
What Is Card-Not-Present
These types of crimes are called "card-not-present" crimes, a name derived from the absent need for credit cards in order to process transactions. Instances of these crimes has increased nearly 50 percent in 2010 which is even more alarming when you consider that crimes based on stolen credit cards have fallen 6.2 percent.
Why Thieves Use Card-Not-Present Scams
Credit cards have drastically changed over the past several years and one major way by which they have changed is in their physical makeup. Traditionally, credit cards were programmed with a computer chip which stores the encrypted data in the magnetic stripe. Previous generations of thieves discovered they could steal credit cards and then use them as the owner would. Also, they could install false stripe readers that would steal information at physical ATM or point-of-sale locations when a consumer swiped their card.
The new age of computerized credit cards, however, has helped to almost completely eradicate this threat, as new cards require passwords and encrypt information before transactions begin instead of after. This advanced form of security has, in fact, deterred card-not-present scams, but thieves are resilient and often clever, which is the reason consumers should always be cautious, even with cards they think are extremely secure.
Indeed, thieves understand how technology evolves and, perhaps more importantly, the reason why technology changes. In many cases, new credit card technology like NFC (Near-Field-Communication) is much more convenient than the traditional "swipe" tactic. NFC, however, presents a new world of security threats, a world which thieves could inhabit and upon which they can capitalize if consumers are not careful.
Protect Yourself From Card-Not-Present Scams
Obviously, it is very important that consumers protect themselves from as much fraud as possible. Card-not-present scams present a particularly complex set of problems so the most important thing you can do is educate yourself and remain proactive. Remember that even though credit cards are constantly evolving to be more secure, it is still your responsibility to maintain your account. Visa Canada has a few ideas, then, for ways you can ensure you remain secure:
- While it may seem like a no-brainer, the first thing you can do to ensure your credit card is safe is to keep your username and passwords a secret. Be sure to choose usernames and passwords that are unique to you and will be difficult for thieves to guess. This goes for both bank accounts and email accounts, since online transactions can often send very sensitive information to your email account. Never use the same password for multiple accounts and be sure to change your passwords frequently for added security and always be sure to use alphanumeric sequences whenever possible.
- Wait until it is absolutely necessary to provide a merchant with your credit card information, especially when shopping online. Trusted merchants understand that intricate nature of web-integrated business and will never ask you to do something that makes you uncomfortable. Similarly, trusted merchants will always provide you with a secure means by which to conduct the transaction; that is the first time they will ask you for your credit card information, not a moment earlier. Always use the secure, built-in, server-based checkout process as opposed to emailing your credit card information or providing your number over the phone.
- Keep diligent records of your online transactions by holding onto receipts and reviewing your monthly statements. This not only ensures that you can note any fraudulent or suspicious activity but it also will inform you of your own purchasing habits, which is a good way to improve your financial stability. Always report questionable movement on your billing statement, both to your bank and to the Canadian Anti-Fraud Centre.