Avoiding Credit Card Fraud

Skimming: Increasingly, fraudsters will attach a device to an ATM or point of sale terminal that will capture an account number from the magnetic stripe on the back of the card. This usually involves a complicit merchant who sells the information, which is then used to "clone" a duplicate card with your information.

Phishing and Spoofing: As use of the Internet and sales on the Internet continue to rise, hackers and other Internet criminals will attempt to steal your credit card information by sending you bogus e-mail claiming to be from your bank or credit card company. The e-mail may say something like the bank needs to make a change to your account and needs you to input your account information. Phishers and spoofers may even send you a link that looks almost exactly like your bank or credit card company's Web site, asking you to input your account information.

Social Engineering: Fraudsters may need some other piece of information from you to set up a fraudulent account, so they will contact you directly. "Criminals will actually contact the victim directly, usually by telephone (or cell phone), and tell some story which ends up in them requesting that the victim tell them 'a few basic details about your card,' " recounts Peter Dorrington, head of fraud solutions for SAS Institute Inc., a business intelligence company, based in Cary, N.C. "Human nature tends to be that we cooperate with other people, especially if they sound like they are someone in authority."

ID Theft: Your personal information like name, telephone number, home address and Social Security number are stolen, possibly from the mail, trash or even online, and then used to open up a new credit card account in your name.

Card Not Present: Your stolen credit card information is used to purchase something from a remote location, either by telephone or the Internet. The merchant cannot see the card and should be checking that the information is valid.

It's easy to get someone's personal data, according to reformed credit card and identity thief Robert Smith, now a businessman living in Rockton, Ill.. Smith explains it's sold online for as little as $20 at Web sites that contain public records.