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Close a huge loophole for credit card fraud
Posted on Jul 18, 2009 by Tom Fragala
There is a huge loophole for criminals that want to take over your credit card account. They can get your account number and change your home address and phone number; redirecting all future statements and calls from customer service. Any calls alerting you to fraudulent transactions will go to the crook, not you! It costs them nothing, even the dumbest crook can do it, and it allows them to do it even if you put a PIN/password on your account. They never have to go online or call the credit card company. It's so simple you're going to laugh. It's also very effective.
The thief just needs to reach into your mailbox (if you have a "rural mailbox" that is standalone) and grab one statement. Now they have your name, address and account number. The real trick comes next: they turn your statement over, fill in the change of address form on the back and mail it in! There is NO authentication by the credit card compainies for this change of address and telephone. Any idiot can do it and it has zero security. If the thief tried to call to change your address, they'd have to enter your SSN, possibly mother's maiden name, and a PIN/password (if you have one and you should). That's too many hoops for the typical thief to jump through. But using the change of address form on your paper statement is as easy as it gets. I don't know of a single credit card company that notifies you when you change your address using that form (if you do, please let us know in the comments). Frankly, it should be a best practice to notify the cardholder before changing the addres, or at least sending a postcard to the OLD address after changing it.
So, the takeaway is this: go to paperless statements (or get a locking mailbox). I know many of you use the paper statement to remind you to pay your bills. I empathize with that need. But nearly every card issuer has an online service that will 1) send you an email notifying you that your statement is available, and 2) notify you several days before the payment is due (if you haven't paid yet).
I know this first hand because it has happened to me and it is no fun trying to unwind the mess.
Filed under: Credit, Fraud, Identity Theft, Tips
Comments
CreditLendingBlog on Aug 29, 2009
Going paperless provides good protection against identity theft. Its a bit inconvenient though, there is just something about paper mail.
Donna on Oct 25, 2009
This happened to my parents only they didn't change the phone number - so that's how they found out - when they were called.
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