Although signing the back of a credit card does not usually stop a credit card thief from successfully using our credit card, it does serve a legal purpose in the eyes of the retailer and the credit card company.

Read the Fine Print

All credit card companies address the issue of signing a credit card in the terms and conditions of the card. If you read this fine print, you will likely notice that the credit card company specifically states that you must sign your card or you cannot use it. If a retailer takes your credit card payment and does not check to see if the back has been signed, they will be legally liable for any charges on that credit card.

You will therefore likely see a retailer asking an individual to sign their card if they have failed to do so. In a perfect world, every retailer would check that signature against the signature on the credit card receipt to make sure it matches, but that just does not take place a good portion of the time.

The retailer may also ask you for additional identification if the signatures don’t match or to ensure that you are the rightful owner of the card.

Protect yourself with your Signature

Signing the back of your credit card protects you, as well. If you sign your credit card and it is lost or stolen, you are not legally liable for the charges. If the credit card company does not take care of the unauthorized charges, you can actually take them to court under breach of regulations. In other words, you did your legal part by signing the back of the card, which then transfers the responsibility to the credit card company.

In short, it is always a good idea to sign the back of your credit card so you can be sure you are fully protected against any unauthorized charges or activity on your credit card.

The New York Times recently reported that the credit card industry may soon change its way from the magnetic strips to imbedded chops and batteries, among other things. If you think about it, this change may be long overdue. In fact, it may be time to allow consumers to become better protected against credit card fraud and to better take advantage of the many benefits of today’s credit cards.

Digitally Enhanced Cards Emerge

Starting soon, it appears that Citibank will take the lead with the newer, digitally enhanced credit cards. They will begin testing a credit card that will allow consumers to decide whether they want to pay for their purchase with their rewards points or their credit card, and will do so by simply pressing buttons on the card that will change the data received by the card’s magnetic strip.

Other creditors are following Citibank’s lead, and are designing and testing cards that can act as both a debit card and a credit card. Yet other creditors will be offering credit cards that reduce fraud associated with credit card “skimming.”

Some credit cards will also be able to hold separate accounts on one credit card. For example, you may be able to choose between a personal purchase on your personal account and a business purchase on your business account simply by selecting the appropriate buttons on the credit card.

Many of the technologies being introduced will be widely used by mid-2011. For many countries, this technology has already been introduced. In Europe, for example, consumers use a chip and PIN instead of a magnetic strip. Why the United States is hesitant to move from magnetic strips is not quite clear.

In addition, Visa, MasterCard and Apply are developing new technologies that will allow consumers to use their cell phones to pay for credit card purchases.

If so, you may find a new design that will transform your credit card into a money manager quite practical. This new design, in short, will change the way electronic money transactions take place.

The Introduction of Card 2.0

Simply put, your ordinary credit card may, in the future, feature a paper-thin computer that will allow you to easily and effortlessly manage your credit.

The design, which will be referred to as Card 2.0, will be fully programmable and rewritable. Any type of information, including account information and payment information, can be changed by the user at any given time.

Recently unveiled at the DEMO Fall 2010 show in Santa Clara, California, this specialty consumer credit card will feature several buttons; each button is linked to a specific account. To use, simply press the button on the card that corresponds to the correct credit card account.

Once the button is pushed, the purchase will be deducted from the corresponding account. The account information is written onto the electronic stripe of the card.

Hidden and your Privacy

Card 2.0 will have another application, called Hidden, which may address problems with credit card fraud and identity theft. Hidden will feature five buttons on the face of the card. The display on the credit card will hide a portion of the credit card number and in order to fully view the credit card number, the user will need to enter a personal code to unlock the entire credit card number.

Once the code has been entered, the full credit card number will be written onto the electronic stripe, thereby allowing for in-store transactions.

In addition, the card’s numbers for Hidden will be erased from the electronic stripe, thereby protecting the consumer until the personal code is entered once again.

Card 2.0, although not currently available, may be a catalyst for changing the way we handle our credit and how we protect our personal information.

Unfortunately, many of us do not, which therefore leaves us quite vulnerable to a credit card thief. It is important to understand that credit card thieves are constantly finding new ways to steal other individuals’ credit card numbers and identity. Although we can’t always protect ourselves from credit card thieves 100 percent of the time, there are many things that we can do to help ourselves from becoming an easy target:

• Don’t let a clerk walk away from you when you are making a retail purchase. If your credit card is out of sight it can spell trouble in terms of credit card fraud and identity theft. If possible, request that the clerk remain at the counter with your credit card at all times.
• Never give out your credit card information over the phone unless you have initiated the phone call and you have researched the company’s credibility. Remember: a company will never, ever initiate a phone call and ask for any of your personal information, including credit card numbers.
• Never give out your personal information or credit card information through an email. And never, ever provide information of this kind if a company solicits you by email claiming to be your bank or credit card company.
• Never give out your credit card information on a website that isn’t secure, or one that you don’t fully trust. It is best to always shop with trusted retailers on the Internet and to make sure that your computer’s antivirus and firewall protection are comprehensive and up to date.
• Invest in a good shredder and take the time to shred all of your personal documents, including credit card statements and credit card offers.
• Don’t carry around a wallet full of credit cards. Instead, carry only the credit cards that you will need and keep the rest at home.
• Check your credit card statement carefully and immediately report any activity that you don’t immediately recognize. Remember: many credit card thieves will charge only small purchases so that many credit card customers won’t catch them!

“See ID”

While some consumers are not signing at all, others are writing the words “See ID” in the signature space on the back of their debit and credit cards. While it seems like a clever idea to leave that card unsigned or to refer merchants to your other form of identification in order to stop would-be cons in their tracks, there are a few things to keep in mind.

“Card Not Valid Unless Signed”

Take a close look at your card. Many of them say this on the back. It does not really specify that the signature has to be your name, so writing “See ID” might be acceptable.  However, this clause is rarely enforced, as the credit card company can not possibly know whether you singed your card and how you signed it and the merchant would have to take a good look at the card to know that the card is not considered valid unless signed. Which brings us to another point.

Merchants

Try as they might to beef up the security of credit cards, merchants and technology are not helping us much. For the signature to even matter, as mentioned before, the merchant would have to take a look at the card, see if it was signed, check ID, etc. Few even bother to do this these days. They ring up a purchase, take the card, run it and hand it back. It’s almost as if they have a “Don’t ask, Don’t tell” kind of policy. Maybe they are just trying to get through their day; maybe they simply want to get their money and let others deal with the issues of credit card fraud on their own. Either way, they have gotten lax, so it is easier for a thief to use a card without authorization.

Technology is not on the consumer’s side either. In this day and age of do-it-yourself card swiping for purchases, you only have to swipe the card, press a button or two and go. No one is checking identities here and PINs do not always protect you. It is easy to bypass the PIN request on most POS machines with a debit card. As for credit cards, rarely do you use a PIN unless at an ATM.

Your best bet? If you would prefer not to sign your card, do not leave it blank. Write “See ID” in bold letters with permanent ink. Keep the card safe and secure at all times, lessening the chance of a thief getting their hands on it. When using your card at a merchant who does run the card for you, offer up the card with your ID. Insist they take a look. This protects you, even if it annoys the merchant. However, your insistence might also lead some store clerks to start requesting ID and checking cards. At the very least, you can be an example in credit card integrity.

You might not be able to completely prevent fraud and theft, but you can do your part to protect yourself and encourage merchants to offer a more secure environment for the use of credit and debit cards.

It’s a great idea to do this. However, it does not mean your mischievous little prince or princess will necessarily follow the rules. To a child, rules were made to be broken and even if they hear that there are consequences for such actions beforehand, they don’t always understand just how serious the ramifications of their actions might be. Then, there are some kids, who no matter what you tell them, are going to challenge the rules, just to see what they can get away with. Either way, their actions are rarely thought out or well-planned.

Kids and Plastic

Plastic makes great toys for kids, but not when it comes to credit cards! If Billy or Susie have found your credit card and have figured out how to use it, they have most likely made some wild and frivolous purchase. It’s probably something expensive, after all, the true value of a dollar probably has not struck them yet, and maybe even something you had never or would never have considered buying. Still, the damage is done. The situation does call for discipline, however, don’t be too harsh, no matter how upset you may be. The child will feel bad enough as it is, and this is a financial lesson best learned sooner rather than later.

No Need to Panic. The Law is on Your Side (and your child’s too!).

Here’s another reason not to be so harsh when you find out about the kiddo’s faux pas. Sure, he or she will need to learn the consequences of their actions, so return the item they bought, take away their allowance and make them think they are paying you back in installments, or have them take out the trash and do a lot of chores to “work it off.” However, you don’t really have any cause for panic. Children often misbehave and make mistakes. It’s part of growing up. In this case, however, the law is on your side and will protect both you and your minor child.

For one, you nor your child can be held financially responsible for this transaction. They’re underage and do not fully understand the cause and effect of their actions. You as the parent and credit card holder should not and will not be held responsible. Both the law and the credit card company will work with you to see that this is the case. Just be sure to report the transaction as fraud to your credit card company or issuer as soon as you can and explain the situation in all honesty.

Your Rights

While the company who sold the item to your minor child might be understanding about the return, you could  encounter one who is less than accommodating. Your credit card company will have issued a charge back. so of course, the merchant might very well dispute it, angry at having lost that profit. Also, they might be feeling pretty foolish at this point for selling such a big ticket item to a mere child. They shoulder some of the blame and should have been much more responsible.

If the company disputes the chargeback, you have the right to request that they observe your lawful rights and either make arrangement to pick up the item or allow you to return it to them yourself, in new and clean condition, of course. If they still refuse, send them a legal notice as to your intent to liquidate the item in question if it is not allowed to be returned or picked up by the company by a specified date. The law says that within thirty days, the property can be considered abandoned, and you, as the new “owner” now have the right to liquidate it. With the law on your side, odds are,  you will also be allowed to keep the proceeds from said liquidation.

Hopefully, Billy or Sally (or both if they were in cahoots) have learned a valuable financial lesson from this. Hide your credit cards and reemphasize the rules and consequences of this kind of unacceptable action. While the damage could have been much worse, you can breathe a sigh of relief. You child’s use of your credit card can not and will not led to financial ruin.

Identity Theft

Few other countries have as big a problem with this, as they do not use the system of social security numbers that we use in this country. This number, which we are warned to keep private, is readily available to anyone looking for it, simply because we are asked to use this as a standard form of secondary I.D. on just about every form and application we fill out, among other things. A person who is up to no good, can steal your identity, take over your life and do with it as they please, leaving you to pick up the pieces later on.

Credit Card Fraud

Credit card fraud in itself does not constitute identity theft. Still, the idea that some dishonest thieving individual has your card or number and is racking up charge after charge is still unsettling and can disrupt your life as much as identity theft can. It can be very difficult to try and get those charges off your bill and your back and to get everything back under your own control so that no one is using your account for their ill-gotten gains. Luckily, there are laws that protect honest citizens from this kind of thing. Still, once again, the damage is already done by the time prosecution occurs.

Beating Thieves at Their Game

Follow all the steps recommended for protecting yourself from identity theft. Shred those personal documents, don’t give out personal info over the phone or to unknown persons, keep your social security card protected and in a place where no one else can access it, etc. You can find many tips and tricks to protect yourself from identity theft by doing an internet search. The best resources will be from government entities, such as the FTC.

To safeguard yourself from credit card thieves, do the following:

• Check your billing statements closely every month and report any fishy activity immediately.
• Be responsible with your credit card. Don’t loan it out, and don’t leave it where someone could gain access to it without your knowing.
• Should your card come up missing for any reason, report it immediately.
• If you don’t intend to use a credit card, cancel the account and shred that card.
• Sign yourself up for e-mail alerts on card activity. Should someone have your card or number in hand, you’ll know it sooner and can take action fast.
• Use of the CVV (the little 3-digit number on the back of your card) is a good security measure. Many websites ask for this verification code to prove that you do, in fact have the card. The downfall? If someone else has your card, they have the CVV, and once you enter the CVV into a website or use it to verify some other purchase, well… anyone with access to the purchase info who also has shady intentions now has both your card number and CVV. There is a new piece of technology to the rescue, however. This handy little gadget, usually attached to your key chain, will randomly choose a new number every few seconds, based on certain factors, to act as your CVV for any given purchase. This is a great investment if you’re looking to protect yourself.

While you certainly cannot single-handedly put and end to credit card fraud and identity theft, you still have plenty of options for protecting yourself. Be proactive and don’t tolerate thieves who want to take advantage of your good name!

This jump in credit card fraud represents an amazing 63 percent increase from 2008. In addition, the number of identity theft victims rose 12 percent to 11.1 million.

Other numbers reported by Javelin’s annual identity theft fraud report include:

• Total losses from identity theft rose 12 percent to $54 billion in 2009, up from $48 billion in 2008.
• Theft amounts, per victim, were approximately $4,481 in 2009.
• Debit card fraud dropped to 33 percent of all identity theft, down from 35 percent in 2008.

It’s no surprise that identity theft is steadily increasing, given the amount of time that individuals spend on the Internet, notebooks and PDAs.

So, what can you do to ensure that you’re not the next victim of credit card fraud?

• Use one credit card exclusively for online shopping. This will allow you to better monitor the card and the activity on the card. You may also want to request a lower credit limit on the card to prevent a credit card thief from going wild on your credit card.
• Make sure all of your credit cards have ample credit card theft protection. Carefully read the terms and conditions of your credit cards so that you are aware of your responsibility should your credit card be stolen.
• Never, ever, ever make a purchase online unless you have the most up-to-date firewall protection.
• Pay close attention to merchants when handing over your credit card. Many of the identity thefts of today can steal your credit card numbers in a matter of second using small, handheld devices called skimmers. Many times, this theft is done when the merchant walks away from the counter to complete your purchase.
• Use the power of the Internet to check and recheck your credit card accounts. Easy-to-navigate credit card websites allow us to check our current balances, view recent transactions and pay online. Use this technology to keep a close eye on your credit cards so that if your credit card account is compromised then you can deal with it sooner than later.

From stealing your credit numbers to your identity, credit card thieves are craftier than ever, which can cost you big.

The following are the most frequent types of credit card fraud, and what you can do to prevent it:

Skimming –

• What is it – Skimming is a fairly new type of credit card fraud that happens when you hand your credit card over to make a purchase. The thief takes your credit card and, in a matter of seconds, steals your credit card numbers using a small, handheld device called a “skimmer.”
• What you can do – Pay close attention to anyone that takes your card for a purchase, particularly those individuals that must walk away in order to complete your transaction.

Phishing –

• What it is – Phishing is credit card fraud that happens via email. Phishing are usually bulk emails that are sent to consumers. These emails, which usually disguise themselves as the individual’s bank or credit card company, ask consumers to provide their personal information. They may appear to be legitimate, even possessing the company’s logo or replicating the company’s web site.
• What you can do – Never, ever respond to an unsolicited email requesting your personal information. Banks and credit card companies will never ask for your personal information via an email message. If in doubt, contact your credit card company or bank directly to inquire about the validity of the email. In addition, make sure you type your bank’s address so that you aren’t re-routed to a fake website who can gain access to your credit card number or other personal information.

It is important to understand that, although credit card thieves are finding new ways to steal consumers’ identities every day, you can protect yourself by never responding to emails, by never providing your personal credit card information to anyone over the phone unless you have initiated the call, and by always paying close attention whenever you pass off your credit card to anyone.

Many of us already know that retailers are now using the security codes on the back our credit cards as a way to curb credit card fraud. For example, the last time you made a credit card purchase over the phone or online the retailer likely asked for your credit card’s three-digit security code, as well as the card’s number and expiration date.

This is done to prevent credit card thieves from placing unauthorized charges on your credit card account without your knowledge. In other words, having a credit card holder’s credit card numbers is now simply not enough for scammers; they must also have the card’s security code to break into your account.

The Newest Scam and how it Works

Credit card scammers have now found a new way to fool credit card customers into giving up their three-digit security code (surprise, surprise), so here’s what you need to know about this scam so it doesn’t happen to you.

The scam goes something like this: a credit card thief (who is already in possession of your credit card number) calls you, claiming to be from your credit card company; probably from the security or fraud division of your credit card company. The caller then recites your address to ensure that you are the cardholder, and lets you know that your card may have been stolen, or that unauthorized charges were placed on your account.

The caller then asks you to verify that you have the card in your possession. And, of course, the only way to do this is by reciting your security code to the caller. Bingo – you’ve just been scammed.

It is important to understand that, at no time, will your credit card company ask you to reveal any private information, including your security code. If you have any doubt about the legitimacy of a call, simply hang up and contact the credit card company directly.