What College Students Need to Know About Credit Card Fraud

Almost two-thirds of college students aren’t concerned about falling victim to identity fraud, according to a 2015 report by Javelin Strategy & Research. At the same time, students experienced the most severe effects of fraud of any age group.

It’s not always possible to prevent credit card fraud, but learning how to keep your information safe and how to detect fraudulent activity can keep a thief from destroying your credit before you’ve even had a chance to start building it.

Why Students Are Particularly Vulnerable to Credit Card Fraud

As a college student, you experience a lot of things for the first time, especially when it comes to your finances.

“For many college students, this is the first time that they’re living on a budget or even using money on their own,” says Vered Gottesman, vice president of marketing at e-commerce fraud prevention company Forter. “They’re also new to what credit cards entail and how credit works.”

Most states don’t require financial literacy classes in high school. Your parents may never have thought to talk about identity theft and how it can impact your credit scores and reports.

[Read: The Best Student Credit Cards of 2018.]

As cases of identity theft grow, particularly through credit cards, it’s essential for college students to learn how to spot the signs of fraud.

A Credit Card Is Safer Than a Debit Card

You might think that an easy way to avoid credit card fraud is to avoid credit cards altogether. But fraudsters also target debit cards, and having money stolen from your checking account through your debit card could cause a ripple effect.

“With a credit card, you’re using the credit card company’s money,” says Paige Hanson, chief of identity education at Symantec. “But with a debit card, you’re spending your own money.”

Even if you report a fraudulent transaction on your debit card immediately, the bank may not reimburse you until its investigation is completed. “So you still have your rent, your car payment and your phone bill, and you’re not able to pay that,” says Hanson.

And if it happens shortly before tuition is due, you may be forced to take out student loans to cover the cost.

If you report fraud on a credit card as soon as it occurs, you likely won’t be responsible for any of the unauthorized charges.

Federal law limits your liability with unauthorized credit card charges to $50. Even so, many credit card companies offer zero-liability fraud protection, which means if you report a fraudulent purchase promptly, you won’t be on the hook for any of it.

In contrast, you could be responsible for up to $500 of fraudulent purchases made with your debit card if you don’t report the fraud within two business days after you learn about it. If you don’t notice the fraud until more than 60 days after you received your bank statement, you could lose all that money.

5 Ways Fraudsters Get Access to Your Credit Card Information

There’s no shortage of opportunities for identity thieves to get access to your information. Even if you keep your physical card on your person at all times, fraudsters can still find a way.

Credit card skimmers. Thieves use devices, called skimmers, that can scan information from your credit card’s magnetic strip. They can then create a fake credit card using the stolen information. The credit card industry has tried to combat this by introducing the EMV chip, which encrypts your card information.

But fraudsters can still install skimmers disguised as card readers at gas pumps, ATMs on campus and even some small businesses where you swipe your card for transactions. While it’s possible to spot and avoid a skimmer, it’s easy to miss it if you’re not thinking about it.

Data breaches. A data breach happens when hackers steal protected or confidential information, often from a company’s server or website. If a website where you’ve stored credit card information is breached, your card number could end up in the wrong hands.

Even if a data breach reveals just your username and password, fraudsters can still manage to get access to your credit card if you use the same login information on another website. For example, say that thieves get access to your university username and password. They may try to log in on sites like Amazon.com and Walmart.com to see if the login information matches. If it does, they can use any credit cards you have stored to make purchases.

[Read: The Best Starter Cards for Building Credit.]

“It’s far easier to take over an account and appear to be somebody else than it is to conduct a transactional fraud with a stolen credit card,” says Gottesman. According to Forter’s Fraud Attack Index, this type of fraud, called takeover fraud, increased by 31 percent in 2017.

Public Wi-Fi networks. If you have a password-protected Wi-Fi network at home, you generally know who has access to it. But if you’re on campus or at a Starbucks using a public Wi-Fi network, you may be at risk.

Hackers can exploit security flaws in a public Wi-Fi router and scan data that pass back and forth between the router and your laptop. If you log in to your online credit card account, shop online or share any other sensitive information while on a public Wi-Fi network, the hacker can see it and use it or sell it.

Unsecure and phishing websites. Even if you’re on a secure Wi-Fi network, it’s still possible to fall victim to hackers. One way is if you enter credit card or other personal information on an unsecure website — a site with an address that begins with “http” instead of “https.” In this situation, a hacker can eavesdrop on your interactions with the site.

Having an https designation doesn’t necessarily mean the website’s motives are pure, though. Fraudsters can set up secure sites and accomplish the same goal.

Familiar fraud. College students are four times more likely to fall victim to familiar fraud, according to Javelin Strategy & Research. This happens when someone you know steals your credit card information or your Social Security number to open a fraudulent account in your name. Perpetrators can be a family member, friend or even a roommate. Leaving your wallet lying around or not protecting your phone or laptop with a password could make it easy for people close to you to steal your card or information.

You can be especially vulnerable when it comes to new roommates, says Hanson. “You are just meeting these people for the first time, and you really don’t know anything about them,” she adds.

7 Tips for Preventing Credit Card Fraud

There’s no surefire way to prevent credit card fraud entirely. But there are some things you can do to limit your exposure. Use these tips to keep your information safe and stop fraud.

Keep sensitive information close. Avoid leaving your wallet or any other personal information out for your roommates or anyone else hanging out in your dorm room or apartment to find. Keep them safe in your room, and, if possible, lock it when you leave the apartment.

Use a virtual private network. If you’re on campus Wi-Fi or some other public network, you can use a VPN to encrypt your connection with the network router. That way, hackers can’t access any information you submit or receive online.

Password-protect your devices. If you use a laptop for school, it’s essential that you have a password to prevent others from accessing your device, along with your personal information. The same goes for your phone, tablet or any other devices you have.

[Read: The Best Low-Interest Credit Cards of 2018.]

Use a password manager for online accounts. Now that you’re an adult, you may need to have your own accounts on sites like Amazon and Netflix, and you may need to create several accounts for your studies.

While it’s tempting to just use the same password for all of your accounts to easily remember it, you’re making it easy for hackers to access all of your information.

Instead, consider using a password manager like LastPass or 1Password. In addition to helping you create complex passwords, these services can store them all in one secure place.

Check your online accounts regularly. If someone steals your credit card information or takes over one of your accounts, the simplest way to spot the fraud early is to review your latest transactions every few days or once a week. Resist the urge to overlook the small purchases, though, says Hanson. “Some fraudsters will test a credit card to see if it’s actually working, and when they test them they will typically do smaller transactions,” she adds.

Check your credit report and score often. According to the Javelin Strategy & Research report, students are the least likely group to spot fraud on their own. Fraudsters take advantage of that fact, so it’s important to be vigilant. If someone opens a fraudulent account in your name, you may never find out unless you notice how it affects your credit. You can get a copy of each of your three credit reports for free each year through AnnualCreditReport.com. Some credit cards and various websites offer free access to your FICO credit score.

Report fraud immediately. If you learn that someone has used your credit card or opened a credit card account in your name, report it immediately to the credit card issuer and the three national credit bureaus: Experian, Equifax and TransUnion. The longer you wait, the more time the thief has to damage your credit. Also report fraudulent debit card transactions right away because if you wait too long, you may be liable for those charges.

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What College Students Need to Know About Credit Card Fraud originally appeared on usnews.com