Credit card fraud is a worldwide problem, and the poor economy has made it even more of a problem. It is vital that you protect yourself from credit card fraud, and there are a number of steps you can take to do so.

First and foremost, only keep the best credit cards. If you have two or more credit cards that are costing you too much in interest – close them down!

So, assuming you’ve got rid of your excess credit cards, what do you do about the ones you still carry around? Several things. For one, if it’s just a quick trip to the market for milk, leave your credit card at home. That way you don’t risk dropping it, or losing it. If you’re like most people, though, carrying your credit cards is a way of avoiding having to carry around large sums of cash, and that is a good thing. If someone takes several hundred euros cash from you, you really have no recourse. But if someone takes several hundred euros in the form of a credit card, your losses are limited.

Here are a few ways to avoid credit card fraud.

• If anyone calls you or e-mails you saying they are your bank and they need your credit card details for some reason that might sound perfectly legitimate, do not provide any of that information. Instead, call or e-mail your bank directly and ask if they contacted you wanting account details. Most will never call you asking for such information, so that you know that an e-mail or call asking for your credit card details is deceptive and dangerous.
• Do you ever play those games online where you have a formula for creating your “pirate name,” or your “stripper name”? Often they’ll say you use your mother’s maiden name for part of it, and then the name of your street for part of it, and maybe your pet’s name for part of it. It sounds innocent enough, except that these are the exact details you use online or over the phone to establish your identity, and if those details get into the hands of someone stealing your identity, they can do a lot more damage.
• Report any suspected credit card fraud immediately. If you report it within 24 hours, you usually won’t be held responsible for anything charged on the cards. But if you wait you may be out a certain amount, say €50, which isn’t that much when someone’s rung up thousands of euros worth of charges, but it’s still €50 that you’d like to keep if you can.

Credit Card Theft is a funny thing.  Just possessing stolen credit card can still be enough to get somebody in trouble.  It used to be that a person had to commit an actual larceny to be convicted of a crime.  With the Internet, the use of credit cards online, and identity theft, credit card theft is now often covered under a more general crime of identify theft.

Consumers are protected by consumers’ protection acts that limit how much they are on the hook if somebody steals their credit card.  Somebody still has to pay for all that fraud.  The Bank where you apply for a credit card is usually responsible for the bad debt or fraudulent purchases. In the US, The Department of Homeland Security reports that credit card fraud could be as much as $500 million dollars a year.  Credit card fraud in the UK was estimated to be 535 million pounds in 2006.

In the US, understanding the difference between felony and misdemeanour is easiest explained by the time spent in jail.  Generally, if you do something so bad that you end up in jail more than a year, you must have committed a felony.  Everything else are called misdemeanours.  Crossing the line to a felony means losing rights even after the felon puts time in behind bars.  Felons often face restrictions when travelling abroad, and lose the right to run for public office or carry firearms.  Countries that do not use this distinction use some other form of categorization.  In the UK and the Republic of Ireland, crimes are categorized as summary offences and indictable offences.

In the US, both federal and state law determines what can happen to a person who commits credit card theft. Federally, credit card theft falls under the Identity Theft and Assumption Deterrence Act in 1998.  Offenses under this law can carry up to thirty years in prison (definitely a felony). In order to be charged federally, the crime has to meet certain requirements.  Two examples are crossing state lines or mailed through the US postal service.

State law varies regarding how credit card theft is handled.  Usually the following information is used in determining if state law will charge the person with a misdemeanour or a felony:

• How much did he or she charge with the stolen credit card?  In many states in the US, if the amount is over $300, the charge crosses from being a misdemeanour to being a felony.
• What kind of criminal record, if any, did the person have before committing credit card fraud?  In some states, the charge for the first time somebody commits credit card fraud is a misdemeanour.  The second time they do it, they receive a felony charge.

Besides getting incarcerated, people found guilty of credit card fraud will usually have to pay fines and may be required to do community service after they serve their time.

It has been a common refrain throughout the recent economic downturn: yet another criminal has been charged with credit card fraud or identity theft. An August 2009 case in the U.S. saw three men charged with stealing more than 130 million credit card and debit card numbers. The card numbers were stolen from Heartland Payment Systems, Hannaford Brothers, 7-Eleven and two other unidentified corporate victims.

While it is unlikely that very many Irish credit card numbers would have been stolen, it is not an impossibility. The stolen information is the information encoded on the back of the credit or debit card in the magnetic stripe, along with the expiration date. Still, consumers are asked to closely monitor their credit card statements online for any unauthorized charges. If you have been the victim of credit card fraud, you will be reimbursed the amount illegally charged to your card.

The method used to steal the credit card information was a sophisticated hacking technique that took advantage of holes in credit card issuers’ security. While there isn’t much you can do as a consumer to keep your credit card issuer from being the victim of a hacker attack, there are steps that all cardholders should take:

1. Report lost or stolen cards as soon as possible.
2. Sign new cards as soon as you receive them.
3. Cut up your old cards into small pieces when you receive a new one.
4. As much as possible, keep your card in sight when you make a transaction.
5. Monitor your credit card statements and inform your card issuer of any transactions you don’t recognize.
6. Never give out your PIN, even if a caller or an e-mailer claims they are from your card issuer.
7. Try not to be distracted if someone tries to gain your attention as you type in your PIN when using a cash machine.
8. Keep phone numbers of your card issuers handy in case your card is stolen.
9. Thoroughly shred key financial information that you are disposing of.

Credit card fraud is still increasing in Ireland, but it is increasing at a slower rate than it was before the “chip and PIN” system of using cards was widely implemented. In 2006, credit card fraud in Ireland accounted for €12 million in losses, and in 2007 it was €14 million. The latest increase is due to the prevalence of “card not present” fraud where card numbers are used over the phone or internet rather than the physical card being swiped.