A security breach may happen when an outdated or poorly protected computer network is penetrated by hackers. Other cases involve the employees of these establishments when they transport information via laptops, optical media, USB drives etc and they either misplace the information or it is stolen. However the information is lost, it is left exposed and those who become in possession of it are now able to either act on the information or sell on identity black markets.

How do security breaches occur?

As mentioned earlier inadequate computer network security makes it easy for hackers to penetrate large establishments and steal information. Employees of these establishments may also act carelessly and misplace this information. There are a few other ways that your information may be obtained through a security breach and here are some examples:

Most large businesses and institutions that handle large numbers of data, normally backup their information to some kind of writable media, which is then transported to off-site storage facilities where they may be stored indefinitely. During the transportation of this media, a dishonest employee may decide to access the media especially if it comes from a banking or financial institution.

There are criminal circles (identity theft rings) that bribe and dupe employees of financial institutions and health care organizations for information containing patient health care records, social security records, dates of birth and complete records including addresses and phone numbers. This information is then sold to people who will pay for it, like undocumented workers who attempt to meet government requirements to receive employment by presenting a social security number.

Laptops and other types of media transporting devices may be stolen from representatives or employees of these organizations, and these individuals often do not realize that they could be specifically targeted by identity theft criminals who are keen to follow and strike at the right moment.

How do you protect from security breaches?

Normally when the institution that loses your information realizes that an information security breach has occurred, they’re required by law to contact all those effected. The state of California implemented this law first and other states followed but not all adhere fully to this law, to find out if your state does visit the ConsumersUnion.org site for details. To be notified, you will normally receive written notification that your social security record and other personal information has been exposed. In some cases the organization at fault will extend the offer to cover you for identity theft protection at their expense for a designated period, typically a year to two years.

The truth about security breaches is that consumers have absolutely no control over the security measures of lack there of from the institutions and organizations that handle their information. They can only hope that it doesn’t happen to them, but that’s not at all a proactive approach to protecting your social security number and personal information.

The best thing a consumer can do, knowing that your most important information is widely distributed to so many places is to automate the process of monitoring your social security record. Identity theft prevention services were brought to light with the purpose of doing exactly this, providing a first line of defense against social security theft, credit fraud and all other types of identity theft.

When it comes to the risk of lost or stolen information and protecting your social security number, the challenge is most difficult because of the many fronts that one must cover to cast a comprehensive level of security against the many angles identity thieves and incidents like security breaches can create to expose sensitive information. So it is best left to the professionals to handle.

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.