By Erika Winston
The most wonderful time of the year has arrived. Christmas is around the corner and shoppers are spending considerable amounts of money to provide their loved ones with the perfect gifts. Not everyone is concerned with giving though. Unfortunately, there are thieves out there who are only concerned with taking your credit card information and using it to their financial gain. To further complicate matters, these criminals are working behind closed doors. They use customer trust to gain their credit card numbers and steal millions of dollars. It’s a troubling situation, but there are steps that consumers can take to lessen their individual risk.
Last year, holiday shopping was abruptly interrupted when Target announced a major breach to their credit card security data. During the most profitable weekend of the year, the retail giant’s computer systems were hacked and, according to reports, the credit card numbers of more than 40 million customers were compromised. The thieves obtained the information when customers unknowingly swiped their cards at the point of sale terminals within the stores.
In the months that followed, investigators learned that the responsible parties were selling many of the credit card numbers on the black market. During the same time, consumers learned of security breaches within several other retail stores, including Neiman Marcus and, most recently, Home Depot. According to reports, the past year’s major retail security breaches resulted in costs totaling more than $200 million.
The breaches spawned investigations by the federal government. In a statement to the Senate Judiciary Committee, U. S. Attorney General Eric Holder stated, “The Department of Justice takes seriously reports of any data breach, particularly those involving personally identifiable or financial information, and looks into allegations that are brought to its attention.”
The Consumer Financial Protection Bureau (CFPB) issued a consumer advisory to provide consumers with information about the prevention and management of credit breaches. Individuals are first advised to monitor their banking and charge accounts. Research shows that most consumers do not thoroughly review their monthly statements. This lack of caution allows thieves to make small withdrawals that go without notice. They also use these small transactions to test an account and ensure that it is active. If their actions go without consequence, they often wait a few months before making larger, more substantial, charges.
Experts also suggest that consumers examine their accounts on a frequent basis to identify breaches more expediently. Waiting until the end of the month allows thieves to make substantial charges before the consumer even realizes that the account is breached. The lapse in time can lead to more substantial losses and make criminal investigations less effective.
When problems are found, the CFPB advises consumers to immediately report the charges to the bank or credit card company. This is important for a number of reasons. First, the accounts can be closed and card numbers replaced to avoid any additional charges. Second, timely reporting can protect the consumer from the financial responsibility of the fraudulent charges. Generally, federal laws prohibit institutions from holding consumers liable for unauthorized charges, but these regulations are only applicable if the customer reports the breach quickly.
Consumers should also document all activities and communications with the banking institution. Credit breaches can lead to larger cases of identity theft. Following the Target breach, investigators learned that various forms of customer identification were also compromised. Thieves often utilize this information to conduct scams and access social security numbers.
While these suggestions are valuable to the management of existing credit breach, many Christmas shoppers are questioning whether it is safe to shop with their credit and debit cards during the holiday season. The Federal Trade Commission (FTC) advises customers to exercise extra vigilance on their shopping trips. The government agency suggests that consumers:
- Shop with credit cards instead of debit cards. When breaches do occur, credit cards offer more protection against future unauthorized charges.
- Watch your back. Though recent breaches were executed with advanced technologies, there are still numerous lower-tech options for thieves to utilize. Some perpetrators simply peer over customer’s shoulders to gather the numbers on a credit or debit card.
- Pay in cash. Consumers with the financial ability to pay in cash should do so. Paying in cash substantially reduces the likelihood of account breaches.
- Use one credit card, instead of many. This makes it easier to monitor suspicious activity and manage breaches as they occur.
- Be careful with the new cell phone payment apps. Before signing up for these technologies, investigate where your personal information is being stored and what security measures are in place for your protection.
The FTC also offers advice for online shopping, which continues to gain popularity during the holiday shopping season. Consumers are advised as follows:
- Ensure that the site is legitimate. Experts suggest that customers look for the letters “https” within the website’s URL address. The “s” on the end designates the site as secure. If the site address does not contain these letters, consumers should refrain from entering their credit card information, no matter how good the deal may appear.
- Know your seller. Consumers should stick with retailers that they are familiar with to avoid breaches. Reputable businesses generally include contact numbers and legitimate physical addresses on their websites.
- Don’t be fooled by security seals. Many retail websites display seals that are supposed to verify the site’s security standards. These seals are easily created and are not necessarily indicative of a truly safe shopping site.
- Use anti-virus and firewall software. Whether consumers shop with their computers, tablets or smart phones, unprotected devices are always at risk of viral infection. The use of anti-virus software can prevent security breaches that can provide thieves with personal and confidential information.
The Christmas season should include a spirit of generosity and giving. But shoppers must protect themselves against security breaches that can have negative financial effects for months to come. By following some simple steps and paying extra attention to their finances, consumers can safeguard their personal information and hard earned assets.