What You Should Know About Debit & Credit Card Fraud
Anatomy of a Card Breach
Based on confirmed details and testimony from previous card breaches, we know that criminals orchestrate these breaches for weeks or months before the public - and sometimes the vendor - is aware of the breach. During this initial time frame, card data is simply collected, but not used. At some point, the criminals determine that no more data need be collected, and card information is sold in large quantities on the Internet from websites outside of the United States' jurisdiction. Although a compromise of a vendor's card processing system may last several months, actual card fraud is committed afterwards during a very short period of a couple weeks until Financial Institutions and Card Companies can re-issue or mitigate further fraud.
What is captured?
A criminal that has stolen your credit card data digitally may have your name, card account number, and expiration date. Your address, the security code on the back of the card, and other personal information like Social Security Number is NOT stored on the card, therefore full-blown Identity Theft is not a risk. It’s unlikely criminals will be able to make online purchases because they do not have the security code on the back of the card. Without your PIN, they will not be able to withdrawal cash at an ATM or in a store, either.
Card fraud of this nature typically starts taking place just days before the public is made aware of a credit card breach. The critical period in monitoring for a specific fraud incident is your statement period in which the media breaks the story, through the next one or two statement periods (total of three statement periods).
Fraud would most likely appear on your statements as legitimate merchandise from legitimate stores – potentially even stores from within your local area. With recent card breaches, local small-time criminals and gangs are EASILY able to obtain card data from cards that were compromised at stores local to them. Criminals can load stolen credit card data onto another card(s) with a magnetic strip and use these to buy merchandise, then sell the merchandise for cash.
Always Stay Alert
The key to mitigating the effects of card fraud is simply staying alert. Review your balances and statements timely every month regardless if a breach is publicized or not. Every company that processes card payments is vulnerable to card fraud - from the smallest businesses to the largest enterprises. Know that Credit and Debit card laws exist for your protection and limit, to some extent, your liability if fraud occurs. Remember that cash is still taken by many vendors and is viable option for those concerned with cards.
Please contact us directly with further questions or concerns!