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Research: A little healthy paranoia helps limit credit card fraud

By , CardRatings contributor
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More consumers complain to the Federal Trade Commission about identity theft than about anything else, according to FTC statistics. To kick off Cyber Security Awareness Month, Experian's ProtectMyID hired StrategyOne Research to learn more about how Americans leave themselves vulnerable to fraudulent credit card charges and other forms of financial fraud. Their results highlight four critical steps that consumers can take to secure their financial information:

  • Require passwords for mobile devices. Experian's survey found that more than half of respondents left phones and laptops unlocked, making personal data available to thieves. Requiring a pass code or a password upon startup prevents a stolen phone or computer from turning into a case of identity theft.
  • Restrict personal information on social networking websites. Nearly two-thirds of respondents in Experian's survey posted their full birth dates on Facebook, Twitter, MySpace or other online services. Yet, many credit card issuers still use date of birth as a security identifier for updating account information. Identity theft expert Chuck Whitlock suggests that consumers think twice before sharing personal information beyond close family and friends.
  • Dedicate a single credit card for restaurant purchases. New York City police recently busted a ring of over 100 credit card "skimmers" who used stolen credit cards to purchase expensive computers and gadgets for resale overseas. Police allege that key members of the organization recruited restaurant workers to copy credit cards while out of patrons' sight. Police investigators say that using a dedicated account, like a specific rewards credit card, limits your exposure to this widespread scam.
  • Activate tougher security tools. When online security expert Ron Bowes compiled a list of passwords revealed during major hacking attacks, even he wasn't prepared for the number of people who used the number "123456" or the word "password" to secure their credit card accounts. Bowes told Forbes that he suggests consumers use credit card companies that deploy multi-factor authentication, like a Bank of America service that sends a text message to a cardholder's mobile phone before authorizing account changes.

ProtectMyID and other identity theft detection services monitor credit reports for signs of unauthorized account abuse. However, NYPD investigators note that most consumers can enable text message alerts for credit card activity, signaling stolen credit card usage in real time.

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