Credit Card Fraud

Pre approved offers are one of the most annoying, paper wasting and risky ways for credit card companies to get business. There is unfortunately no law against this practice and how to stop pre approved credit offers is not necessarily widely advertised. Many people do not know that they have the option of opting out of these mailing lists and we’ll cover that here shortly.

The credit industry invests a lot of money in gathering leads to send pre approved offers to, and these lists of names and other sensitive information comes from no other sources than the credit bureaus. This is a major source of revenue for these companies.

Having consumer information widely distributed the way it is done today between credit bureaus and credit card companies is highly risky for the consumer, as it creates opportunities for identity theft. The pre approved credit card offers do not typically contain anything other than name and address of the recipient and normally a social security number is also required for the application to be processed successfully.

How identity theft happens with pre approved offers

As mentioned above your social security number is needed to complete a pre approved credit offer but savvy thieves can in most cases figure out the missing information either by researching public records or phishing for the information by contacting the targeted victim.

Another way that these pre approved offers can be dangerous is if the thief redirects your mail to another location where he can have access to your mail, the thief could have access to all your current credit card statements and bank statements as well and not just any pre approved credit card offers that may come in the mail. These are obviously very dangerous events especially if any of the mail you receive ever comes with your social security number.

Your mail doesn’t really have to be redirected, it can be stolen from you mailbox if your mailbox does not have a lock. Thieves will figure that if you’re getting pre approved credit card offers you must have a somewhat decent credit file. The best thing to do in cases like this is to get a P.O Box address and redirect your own mail there.

One other way that consumers may create possibilities for identity theft with pre approved offers is by throwing these offer letters in the trash whole. It is never wise to discard of any type of document that contains your name, address, phone number or especially your social security number. Putting these credit card offers in the trash without shredding them is simply asking for it. Identity thieves may sometimes resort to digging through trash to find any information they can use, this is commonly known as “dumpster diving“.

How to opt out of credit card offers

Credit card companies resort to these aggressive approaches to gain members in order to continue growing and sustain an escalating profit margin. However, no consideration is given to the risks they create by continuously mailing out these offers. When identity theft occurs, creditors will always hold the victim responsible for the debt until they can prove otherwise. When this occurs, it is the victim who must work to resolve this and credit card companies will not begin their own investigation until a police report is filed and an identity theft affidavit is filled out. So if identity theft results from pre approved offers addressed to you that you never asked for, you’re still responsible. That’s the bottom line.

Is there a way to stop this madness? Yes, absolutely. You have the right to opt out of credit card offers by visiting the Opt Out Pre screen site. This is the official site run by the credit bureaus where you exercise your right to put a stop to the trading of your information. You could also contact the credit bureaus directly but this is the quickest way.

There are limits to the time you can remain opted out, but if you have been the victim of identity theft then usually you can remain opted out longer. Once your period of opting out expires simply opt out again. Pre approved offers do not have to be a burden to you.

Credit card fraud adds up to billions of dollars every year, it is the most common form of identity theft and often the easiest for even the most novice identity thief to commit. Credit card scams have been around since the inception of the credit system and have evolved along side the level of sophistication of modern methods of credit protection. Consumer online activities create many opportunities for consumer fraud, and often, internet users do not realize the danger they’re in when they perform these transactions from an unprotected computer system, although this only occurs if the thieves are savvy enough.

How credit card fraud occurs

Credit fraud can occur online, particularly when a computer system is not protected with antivirus and spyware software that can keep malicious intrusions out. However, online credit fraud is not the main source of the crime, credit card fraud is facilitated to identity theft criminals mostly in the conventional ways. That is, while we run common transactions such as taking money out of the ATM, ordering a pizza over the phone, writing our credit card number on a bill etc. Other ways thieves are able to get direct information about your credit accounts is by redirecting your mail by submitting a change of address card to the post office.

Once a thief gets a hold of your mail, they may or may not use the same accounts you have active, if they have enough information on you, they may instead attempt to open a new account. But most often they’re looking for a credit card number they can use for online transactions. Your credit statements will often contain your credit card number and the expiration date, and although the CVV or CV2 (card verification value) number won’t appear on your statement, not all merchants require it to complete online orders.

Another method used for acquiring consumer information to commit credit fraud is known as “dumpster diving“. This is when thieves dig through your trash to find readable information they can use. This is still an effective method since probably “most” people don’t bother to shred paperwork that contains their personal information. Ripping up these documents does not always destroy the documents completely. Any information they find can be used to attack existing accounts or open up new ones.

Of course the easiest thing for a thief to do is steal the physical credit card. When your wallet or purse are lost or stolen thieves will act quickly to use the credit accounts to make purchases before you report the cards stolen. Carrying the phone numbers of the credit card companies in your wallet won’t do any good should your wallet disappear.

Even if you’re savvy enough to guard your own credit accounts, there are other ways that your account numbers can be exposed and that is through security breaches, which often means that companies you do business with failed to secure your information. This often happens when their computer systems are hacked or their employees commit the credit card fraud by either selling consumer account information or using it themselves.

Credit card fraud protection

Because credit fraud and credit card scams are rather a “when” and not an “if”, there are many ways to establish a fraud protection system to work for you. However, not all credit card fraud protection services work the same.

Your credit card company may extend this service for free depending on the type of account you have, although they typically are only concerned with protecting the credit card account you have with them and not all of your credit accounts, which can be ok if you only have one credit card. Fraud protection is in fact a big business and although it does cost extra in most cases, it is an absolute necessity, especially if the the credit account is very active.

Credit monitoring is one service that can monitor your credit accounts and your credit report, this type of service will alert you when suspicious activities occur on any of your accounts. The goal of this service is to alert you immediately so you can take action before further damage occurs. However, it can not prevent the credit fraud from happening.

Identity theft prevention services are perhaps the most effective means of protection against credit card fraud. These services were established with the intention of providing a complete system of protection that includes not only your credit card accounts but your social security number, and in some services, your medical benefits. This type of protection can in fact stop the fraud before it happens.

How to report credit card fraud

It’s important that if your wallet is lost or stolen you’re able to reach your credit providers and banks to report your cards missing and either suspend or cancel the accounts before they can be used. If you have noticed that your credit statements have stopped arriving to your mail box, or if you notice that there are charges on your credit accounts that you did not make, you must move immediately to report the credit fraud.

To learn how to report credit card fraud and any other type of identity theft, please follow the directions on our “reporting identity theft” article. There you’ll find all the details you need to get the process started.