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Credit cardholders have long been told to sign the back of their credit card as soon as it arrives in the mail. Your signature represents your acceptance of the card’s terms of service, and merchants were required to check to make sure the card was signed before accepting it for purchases.
While some merchants may still check for a signature, with the advent of EMV chip technology, that practice is quickly becoming a thing of the past. But many consumers debate whether signing the card versus writing “See ID” is a more effective fraud deterrent.
While writing “See ID” on the back of your credit card may seem like a good way to thwart fraud, as it alerts cashiers to request further identification before processing a charge, it’s not universally effective, said Karisse Hendrick, a consultant for financial management company Arcus Financial Intelligence and co-host of the “Online Fraudcast” podcast.
“Visa and Mastercard actually have a rule that consumers should not have to provide their ID for purchases,” she said. “This stems from their desire to be the only card a consumer needs to carry with them.”
Writing “See ID” doesn’t make sense for modern card users anyway. Now, most cards in the U.S. require the cardholder to either swipe or dip their cards into a terminal instead of handing the card over to a cashier. “This means [cashiers] wouldn’t have an opportunity to even see the back of your credit card,” Hendrick said. “This can give a cardholder the false sense of security that their card is being protected without really being effective.”
So, without that extra security step, how can you protect your card against credit card fraud? We’ll offer tips in this post.
Preventing credit card fraud before it happens
The old saying “an ounce of prevention is worth a pound of cure” illustrates what credit card users should be doing to stop fraud before it starts. Your credit card company is doing its part to keep your account safe, but you also need to be part of the process.
Some steps are pretty universal, such as not lending your card out and not leaving cards or statements out in the open. It’s important to be careful about sharing your card numbers over the phone unless the company is reputable. And carry only the cards you need, inform your card issuer when traveling or if your address changes, and never sign a blank receipt.
It’s true that hackers are increasingly able to gain access to card details without needing a physical card present, but in-person fraud still occurs.
“One common misconception with consumers is that most credit card compromises occur online, but almost all major breaches of credit card data have been from in-person purchases, like what happened with stores like Target and Home Depot,” Hendrick said.
Keep your cards close and use different passwords
When shopping or traveling, only take credit cards you know you’ll use to pay for items. Keep an eye on your card when transactions are being processed whenever possible. Draw lines through any blank spaces above the total on any receipts so that servers and cashiers can’t add their own amounts. And always save your receipts and compare them with your online statement to check for fraud or errors and question anything that doesn’t look right.
Keep your passwords updated and try not to use the same password for multiple accounts.
“Criminals know that consumers use the same password for multiple accounts and will try your credentials at many popular online companies,” Hendrick said.
Once they gain access to your online account, your credit card can be used to make purchases with retailers who have your card on file. “Using a password manager can help reduce your chances of becoming a victim of this type of fraud,” Hendrick said.
Shop safely with well-known retailers
Don’t even think about pulling out your card to buy something online without checking to see if the website is secure. Secure websites have an “S” after “http” in the browser URL (“https”). If a vendor doesn’t have that “S,” find another way to buy your items.
Credit card companies have also created programs that generate random card numbers linked to your account, allowing you to shop online without worrying about your information being stolen. They include Protect Your Citi® Card Number, Bank of America’s ShopSafe®, Capital One’s Eno℠ and Mastercard SecureCode®.
Avoid using cards when on public Wi-Fi
Public Wi-Fi networks are rampant, but they shouldn’t be used when logging in to frequently used retailers or financial institutions. Thanks to sophisticated hacking tools, people can easily gain access to things such as your personal information, private documents, contacts, family photos and login credentials. Having that information could allow someone to impersonate you and scam your contacts. They could also take your usernames and passwords to try to gain access to other websites.
If you must use public Wi-Fi networks, don’t log in to your personal financial accounts or sites containing sensitive personal data. Don’t shop online via public Wi-Fi since you’re required to share your credit card, bank account or other personal information.
Don’t ignore online warnings about fraudulent websites or downloading malicious programs. Once you’re done browsing, disconnect from public Wi-Fi. Finally, don’t set your smartphone, tablet or laptop to automatically connect to Wi-Fi, especially in unfamiliar places.
Consider getting your own virtual private network (VPN) if you use public Wi-Fi regularly. VPNs encrypt traffic between your computer and the internet, even on unsecured networks.
How to handle credit card fraud once it’s occurred
Despite your best efforts, a hacker managed to get hold of your credit card accounts and wreak havoc. First, don’t panic. Credit cards from American Express®, Bank of America®, Capital One®, Chase, Citi®, Discover, come with zero liability, which means you won’t be held responsible for unauthorized charges if your card is lost, stolen or fraudulently used. Immediately report your lost or stolen card so that your company can cancel the card and get a replacement sent to you.
It’s always a good idea to pull your credit reports from each of the big three credit bureaus (Equifax, Experian and TransUnion), especially since you get them for free once a year, to review all accounts in your name. This report has all the information that helps credit card companies, among others, determine your creditworthiness, and also feeds into algorithms that make up your credit scores.
After fraud has occurred, pull your three reports. If you find errors due to fraud, dispute them and get them corrected. Submit in writing what information you think is inaccurate by using this sample dispute letter created by the Federal Trade Commission. You should also contact the lenders, such as credit card companies, to report any fraudulent charges or accounts opened in your name that you didn’t initiate.
Include documents that help prove the information in your report is wrong. Explain why you think it’s wrong and ask to have it removed or corrected. The credit reporting companies must investigate, usually within 30 days. They must forward the proof disputing inaccuracies to the company that originally reported the bad information. That company, in turn, has to investigate and report back to the credit reporting companies, which must correct the information in your file. You’re entitled to get your results in writing, along with another free copy of your report to reflect any changes.
Check out our story on how to report and prevent credit card fraud here.
The bottom line
Credit card companies have a lot more experience with security than the average consumer. They also have a lot more to lose if someone forges your signature because most credit cards offer a $0 fraud liability policy. That means you don’t pay if your card is stolen. If a thief racks up a ton of charges on a stolen card, companies are forced to swallow those costs.
More companies are implementing two-factor authentication or one-time passwords, where they send an SMS text message to your phone with a code that you have to enter online to verify your identity, Hendrick said. And as of Sept. 21, consumers can now freeze their credit reports for free at Equifax, Experian and TransUnion, which means no one can create new card accounts in your name.
Thanks to chip cards and merchants with more automated checkout lanes, you can swipe or dip your card with no interaction with a human, making the “See ID” issue a moot point. But you must remain vigilant, following the tips outlined above to ensure that your card remains safe from hackers and fraud.