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Credit card fraud: how to prevent it

Credit card fraud

At Credit card fraud credit card details are stolen or forged and used for illegal purchases. Credit card misuse results in annual damage of over 600 million euros, and the trend is rising.

What types are there?

Credit cards are usually very easy for fraudsters to use for their own purposes. Because the credit card doesn't even have to be there. Only the basic data on the card is sufficient for purchases.

  1. Card theft
    By physically stealing the credit card, fraudsters can use it to pay immediately. Since many cards are only secured with a signature, the stolen credit card is often used immediately by thieves for shopping.
  2. Electronic data theft
    Anyone who purchases online with a credit card must transfer their credit card details to the retailer. Fraudsters just need the card number, the name of the holder and the check digit to immediately use the card for online purchases or transfers.
  3. Data theft from credit card providers or online retailers
    Fraudulent gangs and hackers manage to steal credit card data from customers on a large scale again and again.

For consumers, this means that a credit card is never 100 percent secure. You should therefore always keep the possibility of credit card fraud in the back of your mind. If you discover that your credit card is being misused, act quickly.

What to do after a credit card fraud

If you discover that your credit card has been stolen or misused, you should act quickly to prevent greater damage:

  • Immediate blocking of the credit card: You should block your credit card regardless of whether the data or the entire card has been stolen.
  • Check card transactions or billing: Report any damage or improper debits to the bank or credit card provider immediately. In this way you avoid having to be held responsible yourself.
  • to file charges: Report the data theft or credit card theft to the police. Your report can serve as proof for the bank to get your money back.
  • Document: Make a note of when the card / data was stolen and when you had the card blocked.

Blocking emergency number for credit cards

In 2005, the Federal Network Agency set up the central contact point for blocking electronic authorizations in Germany. Behind this cumbersome name is the central emergency number that credit card users can dial in the event of loss or theft. The blocking emergency call is administered by the Sperr e.V. - Association for the Promotion of Security in the Information Society. The non-profit organization is based in Berlin.

The introduction of the central emergency number made it easier for consumers to have their cards blocked in an emergency. It doesn't matter which provider the lost or stolen credit card was from. When you call the emergency blocking call, you will be forwarded to the relevant point of your credit card provider.

You will need your credit card number to call.

The free number 116 116 can be reached around the clock worldwide. If the emergency call is called from abroad, you have to add the country code: +49 116 116. In Germany, this is a call at the local rate. For calls from abroad, consumers must expect additional charges. The service itself is free.

Fees for blocking and replacement card not permitted

Banks and credit card providers are not allowed to charge any fees for blocking a card. The legal basis for this is provided by Paragraph 675 ff, Paragraph 4 of the German Civil Code (BGB). According to a ruling by the Federal Court of Justice (BGH) in 2015, credit card providers or banks are also not allowed to charge any fees for a replacement card if the credit card is stolen or lost.

Complaint at the bank

If the wallet has been lost or stolen, at the latest when you find out on your statement or the transactions on your credit card that amounts are listed that are not based on your payments, you should report this immediately.

  • Act quickly: A complaint about debits on the credit card should always be made as soon as possible. You have eight weeks from the time of the debit to cancel.
  • Complain in writing: Each bank usually offers its own form which you can use to submit your complaint. You can justify any claimed amount.

If you complain about card transactions that have not been made yourself, the card provider is obliged to reimburse you.

Credit card fraud through theft

Most often, credit card fraud occurs after theft. According to a survey on credit card fraud from 2015, one in ten Germans has had their debit or credit card stolen. Usually it is not just the credit card that is stolen, but the entire wallet. The risk of card misuse is just as high as if the card is lost, since the card can be used immediately for shopping.

In brick-and-mortar shops, a signature instead of a PIN is usually sufficient to legitimize the purchase. If thieves use the stolen card for online purchases, all they need is the name, the card number, the period of validity and the CVC verification number.

Credit card fraud through data theft

In its simplest variant, credit card data is stolen from infected personal computers. As soon as you enter sensitive payment data when shopping online, these can then be read by hackers. It is also possible that the data is tapped via so-called "phishing". Fraudsters redirect victims to manipulated websites. There the victims are asked to enter payment details. The fraudsters then use this data to make purchases or withdrawals.

In another case, the theft of credit card data is based on a targeted action by hackers. They either attack the servers of online shops or the servers of credit card providers. The customers' credit card details are stored on these servers. Even if this data is usually stored in encrypted form, data thieves can circumvent this encryption using special techniques.

Data theft fraud is often noticed late

Many cardholders find out that data has been stolen very late because they either do not control their debits or only look at the monthly invoice. Often it can be too late to complain about the improper use of the card. The banks and providers are only obliged to reimburse if the complaint is made within eight weeks of booking.

Liability issue

After a credit card fraud, there can be various liability options. The law stipulates a maximum liability of 150 euros for the cardholder if their cards are stolen or misused. This regulation is set out in Section 675v of the Civil Code.

When a cardholder is liable for loss or fraud with his card is set out in the terms and conditions of the respective provider.

Anyone who acts with gross negligence or willful intent must therefore expect to be liable for their own losses through theft or fraud. He is therefore fully liable. Gross negligence can exist, for example, if the loss of the card or fraud was not reported to the bank or the provider as quickly as possible.

Another example of gross negligence is keeping your PIN and credit card in the same place as your wallet.

Legal background

Credit card fraud is reflected in various sections of the Criminal Code (StGB):

  • Paragraph 266b StGB: In this case, the fraud relates to the cardholder himself. For example, he uses his card even though he knows that he will not be able to bear the costs incurred.
  • Paragraph 263a of the Criminal Code: In this case, it is a question of computer fraud in connection with a manipulation during the data processing process at the cash register or on the Internet as well as at ATMs.
  • Paragraph 152a of the StGB: Anyone who uses counterfeit or stolen credit cards must expect fines or imprisonment under this paragraph.

In the case of fraud, various paragraphs can be used, which can significantly increase the penalty for credit card fraudsters and, in addition to a fine, there is also a prison sentence.

This is how you can prevent it

  • Regular check of the debits: Check at regular intervals which amounts have been debited. If possible, use online banking and do not wait for the monthly credit card statement.
  • Never send credit card details by email: Never send your credit card details unsecured via email or SMS. Remember that this data alone is enough to use it to shop online!
  • Only carry your credit card with you when you need it: Keep your credit card in a safe place at home when you don't need it. The EC card is usually sufficient for paying in shops within the EU.
  • Do not keep the card together with the PIN: Find a separate place to keep your PIN. This makes it more difficult for thieves to use the card.
  • No PIN numbers with you: Make a note of your card PIN and never write the number down on a piece of paper that you have with you in your wallet.
  • Always tear up card receipts and statements: Your credit card number is usually listed on receipts and statements. Destroy these receipts immediately when you no longer need them. This data could be misused by fraudsters.
  • Do not buy from online retailers without a secure payment system: When shopping online, make sure that the retailer's billing system offers SSL-secured connections, for example. You can recognize these connections by the https in front of the Internet address.
  • Destroy old credit cards: As soon as you receive a new credit card from your provider, you should destroy your old card immediately. Although it is no longer valid, the credit card number remains the same.
  • Check ATMs: Check each ATM for anomalies such as special devices when you withdraw money with your credit card.
  • Do not give away the credit card when paying: Always stay with you when paying by credit card and do not just give the card out of your hand.