The other day I woke up out of bed and did what I normally do after 10 minutes of meditation with the Calm app: I went online and checked my finances including bank accounts and credit cards.
One credit card account had a balance that was much higher than usual. Now, I use my Chase Freedom card mainly for purchasing gas, so to have an abnormally high balance on this card makes no sense.
I clicked through to the card to take a look at recent transactions and found multiple charges that I definitely had not made.
Check it out:
Now here’s what made this whole thing a bit strange at first…
When I clicked on each of the transactions, they all said “IN-PERSON” but my credit card was sitting right here in front of me, so how could any of these fraudulent charges have been made in-person?
So I called up customer service on the back of my credit card wondering how in the world these charges could have been made in person if I only have ONE Chase Freedom card and no, I do not have any authorized users.
The rep on the phone mentioned that they had automatically mailed over a replacement card because it was about to expire in a month. He also mentioned something that will bring me to my point soon: When you receive a replacement card in the mail, you are not required to re-activate your card.
Do you see where things can go wrong?
To make a long story short, the updated card had somehow fallen into the wrong hands, and since you do not need to activate your card when you’re receiving an updated credit card, the fraudster had taken advantage by going on a mini spending spree.
Now here are three simple changes that credit card companies can make to avoid fraudulent charges as well as the losses incurred because of them:
- Require the card-holder to re-activate replacement cards by calling in.
- Either require an ID check an ALL in-person transactions (regardless of the transaction’s cost) OR place a headshot of the cardholder on the front of the card. This way, the cashier can also avoid an additional step of asking to check your ID.
- Require a signature on the delivery of a credit card to make sure the card is delivered to the right person.
What are your thoughts on how to reduce credit card fraud? Post in the comments.