What Everyone Needs to Know About Credit Card Data Theft

A data breach occurs when an individual’s name, plus their Social Security number, driver’s license number, credit card information, or medical or financial records are put at risk because of some sort of exposure.

A new Cardratings.com survey analysis reads: “Some 41 percent of American consumers have experienced just card fraud — let alone other losses — in the last five years.” This means that more than likely, you or someone you know has personal experience with such fraud. 

Even more shockingly, last year a company called ID Experts, which specializes in data breach care, reported to PC Mag’s Security Watch that over 600 million records had been compromised in the U.S. from 2005 to 2012. The Identity Theft Resource Center estimates that from 2005 to today, the number of breached records sits at around 633.5 million. That’s nearly two events for every U.S. citizen.

However, in spite of these findings, when Card Ratings surveyed 2,000 married homeowners, ages 25 and over, only about one out of four (25.5 percent) of them said they had been victims of data breach. In all actuality, it’s more likely that all of them have been victims at one time or another.

Other shocking findings from the Card Ratings survey include the actions taken by consumers in response to a data breach, or should we say lack of action. What would you do in the event of a data breach? How do you stack up against the survey respondents?

Source: Thinkstock

Source: Thinkstock

Check Your Account Statements

This may seem like an obvious action, but for many people it’s not. Especially, if someone doesn’t know details about the type of breach. Of data breach victims surveyed, only around 51 percent of them checked their credit card statements and only around 54 percent checked their bank accounts. This is, however, one of the first things you should do if you think you are a victim of a data breach. Go through your account statements line by line and check for any inconsistencies.

Keep an especially close watch on any accounts you think may have been compromised. It’s also a good idea to stop using the card in question, like around one out of three survey respondents said they did, and also, request a replacement card from your financial institution or card issuer, like around 86 percent of survey respondents said they did.

Source: Thinkstock

Source: Thinkstock

Check Your Credit Report

Only around 45 percent of data breach victims said that checking their credit reports was an action they thought to take. Some specific age groups, like those ages 35 to 44 (around 50 percent) and 55 to 64 (around 53 percent) had a higher percentage of respondents who checked their credit reports. Other groups, like the 25 to 34 age group, had a lower percentage — around 33 percent.

“A data breach often gives thieves just the information they need to hijack your [identity]. Monitoring credit reports can give an early warning of accounts being wrongly opened in your name, and can help you head off problems before they become too serious,” reads the Card Ratings analysis.  

Source: Thinkstock

Source: Thinkstock

Is Credit Better?

When it comes to safety and fraud security, which is better: debit or credit? The 54.35 percent majority of survey respondents who said credit got it right in this case. With a credit card, you have a lot more legal ammo in the event of a breach.

Say a thief places unauthorized charges on your credit card — it’s the issuers money that’s been spent and you’re generally liable for no more than $50. On the other hand, with a debit card, it’s your money that has been spent and you have to convince the bank that a theft has occurred and then wait and see what happens. Sure, you may get your money back, but it’s not as sure-fire as with a credit card.

Source: Thinkstock

Source: Thinkstock

Freeze and Monitor Your Credit

If you think you’re the victim of a credit card data breach, it’s better to be safe than sorry. Sign up for a credit monitoring service and in extreme cases, you can even place a freeze on your credit file that will prevent anyone from using your credit.

According to Experian, “Security freezes are designed to prevent a credit reporting company from releasing your credit report without your consent … When you place a security freeze on your file, you will be provided a personal identification number or password to use if you choose to remove the security freeze from your file or authorize the temporary release of your credit report for a specific person or period after the security freeze is in place.”

Of the Card Ratings respondents who learned their information had been compromised, only around 24 percent placed a security freeze on their credit files. Around the same percentage — 24 percent — signed up for a credit monitoring service.

For more information on credit card data breach you can view the Card Ratings Survey analysis here. Or, visit the FTC’s credit card fraud protection page.

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