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By Amy Rich
Staff Writer, 1 May 2008
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Over the past week, the financial news headlines have included the chairman of Barclay's Bank has become a victim of identity fraud after staff at his own bank failed to follow security procedures.
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CREDIT card fraud currently costs the UK a staggering £1 million a day. So, what's being done about it?
With fraud on the increase, credit card companies are looking at new ways of boosting security for their customers. From the government-backed Chip & PIN technology to fraud monitoring and identity theft services, security is key where credit cards are concerned.
Credit cards are no longer just something that you whip out at the checkout to pay for your weekly shop – instead; they're used to buy goods online, by mail order and over the phone. For many, they are the pay option of choice.
Whatever card you hold, the likelihood is that they’ll be security measures in place without you even realising it.
But bandying your credit card information here, there and everywhere leaves you wondering just how safe your details are. So, what security factors have credit card companies put in place?
- Chip and PIN technology
- Fraud monitoring
- Fraud protection / Internet fraud guarantees
- Identity theft services
- "3D Secure" - a VISA and MasterCard service that allows you to set a password to use at participating retailers
The list of security options that some credit cards have is seemingly endless, with some companies offering up to six security benefits.
However, not all credit cards offer the same levels of security, and just like rates and fees, some cards are better equipped at keeping your money safe than others.
Halifax credit cards, for example, offer standard free security services including:
- Internet fraud guarantee
- Halifax Secure (part of the VISA and MasterCard secure program)
But if you want additional peace of mind from Identity theft, then you will have to cough up the cash and pay £6.95 a month for IdentityCare insurance.
Whereas Citi credit cards offer more security and even include Identity theft services for free:
- Internet fraud guarantee
- Active fraud protection
- Identity Theft Solutions
Barclaycard issued credit cards also come with a handful of security extras, including:
- Fraud guarantee
- Fraud protection
- Barclaycard Secure
- Identity Protection Service
Capital One is another issuer to start offering Identity theft services as a free cardholder extra.
Busting the jargon
Whilst security solutions sound impressive most of the time they’re not exactly written in easy-to-understand plain English. So what do the main ones mean?
Fraud monitoring / Active fraud protection: Credit card companies monitor the use of your credit card - usually looking for Internet use/card-not-present (CNP) usage and foreign transactions. If anything seems suspect, it is standard procedure for card companies to phone and discuss anything they deem suspicious with you.
Online fraud guarantee / protection: Guarantees you against any fraudulent use of your credit card made online without your consent or knowledge. If it does happen, simply phone your credit card issuer as soon as you know about it and they won't hold you liable for the cost - refunding any money back to your account.
Identity theft services: Identity fraud happens when someone uses your personal information - name, address, etc... - to open a financial agreement like a credit card.
Identity theft services will help you to restore your credit and name if you ever become a victim of Identity fraud.
3D Secure: VISA and MasterCard are taking extra precautions with their '3D Secure' service. It's a pretty new initiative, and if you haven't heard of it, 3D stands for 'Three Domains Secure':
1. The merchant
2. The acquiring bank
3. MasterCard / VISA
To take advantage of this security scheme, you'll need to register with Visa/MasterCard and create an account with them. Then, when you’re shopping online on sites that are part of the 3D Secure service you log into your account to proceed with the payment.
3D Secure is basically a double security check - as whilst anyone can get hold of your credit card (card or details) if they're determined enough, they won’t have access to all your personal information/passwords that are needed to make a payment on 3D Secure websites.
Unfortunately, the downside to 3D Secure is that not every shopping site on the Internet has implemented it – in fact, the majority haven't.
What about purchase security?
Alongside the fraud security measures is also Section 75 of the Consumer Credit Act 1974, which is the part of the law that holds credit companies liable for the proper delivery of purchases.
If a problem arises with a purchase (breach of contract, false information, faulty goods or non-delivery for example) the credit card company is held equally liable with the supplier by law and covers credit card purchases from £100 - £30,000 anywhere in the world.
Many credit cards will offer extra purchase security as a cardholder extra though.
"Purchase protection insurance" is often a free insurance that will cover goods bought against accidental damage and theft for usually up to 100 days after the purchase was made.
In the end...
Whilst the credit card companies are doing their bit for your security, make sure you do your bit too.
Whilst out and about make sure you hide your Chip & PIN number when paying at check outs, never write your Chip & PIN number down on a piece of paper and always watch out for unusual activity/people loitering about at cash points.
If you shop online make sure your virus protection software is running and up-to-date and your Internet connection is secure.
Don't give your credit / debit card or personal details away in an e-mail - even if you think it's your bank - it won't be! Banks will never ask for any of your personal details via e-mail - and if you’re unsure, simply phone them up from the telephone number on a recent card statement.
If you're eating out - try not to let anyone walk away with your credit or debit card - make sure they process the payment at the table, and if they need to take it to the till then go with them.
Check your statements! Either online or when you receive your statement each month - check each item and make sure they're all yours. If you see anything you don't recognise let your credit card issuer know as soon as possible - the sooner you report anything suspect the easier it will be to claim back any loses.
With all these measures in place, your personal identity, credit card details and peace of mind should remain intact.
 Credit card guide
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