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5 Ways to Protect Yourself From Credit Card Fraud

By Priya Anand, MarketWatch

In the last five years, 41% of Americans have faced credit, debit or prepaid card fraud, and about half of people who engage in “risky behavior” — like writing down a pin number or throwing away documents with banking information on them — end up being victims, a new study finds.

The U.S. ties with India as the country with the third-highest card fraud rate over the last five years, behind China at 42% and the United Arab Emirates at 44%, according to the study by the payments company ACI Worldwide and Aite Group, a research firm.

The U.S. is the last developed country to adopt technology to store card data on a microchip rather than the magnetic stripe, with a goal of fully migrating to the system by October 2015. The chip-and-pin card system — also known as also called EMV, which stands for Europay, MasterCard MA +0.06% and Visa V -0.05% , the companies that began developing it in 1994 — is considered more fraud-resistant.

Data breaches — and the card fraud that could follow — have hit a nerve for millions of consumers in recent months. Target Corp.’s TGT -0.18% bombshell holiday-season compromise late last year put up to 110 million customers’ information at risk and marked the start of seemingly unending headlines about similar leaks or hacks at other companies. P.F. Chang’s China Bistro said earlier this month that an unknown number of credit and debit cards used at the chain’s more than 200 restaurants were part of a “security compromise,” and it didn’t know which ones.

“I wonder whether or not people are becoming a little bit numb,” says Michael Grillo, senior product marketing manager at ACI, who adds that he’s surprised people still do things the report outlined as “risky behaviors.” The study found that 50% of people who engaged in those activities were victims of card fraud, compared with the 38% of people who did not but still experienced fraud.

Using credit and debit cards less — like the Swedes and Dutch, who each saw fraud rates lower than 15% — is one way to reduce risk, given that fraud can happen even to those who use their cards responsibly, as evidenced by the breaches. But people aren’t powerless.
Avoid these five behaviors to cut your fraud risk:

1. Leaving a smartphone unlocked while not using it.

11% of Americans leave their smartphones unlocked while not using them, compared with 33% of people in Mexico, putting information stored on the phone at risk.

2. Throwing away papers with bank account numbers on them.

Paperwork with personal information should hit the shredder before the trash. The study found that 13% of people in the U.S. toss documents with account numbers on them in the garbage.

3. Using a public or unsecure computer for banking or online shopping.

It seems obvious, but 7% of people in the U.S. shop or bank online from public computers or machines that don’t have security software.

4. Replying to emails or calls requesting your banking details.

In Brazil, 7% of people still give their information away over the phone or email, compared with 5% in the U.S., according to the study.

5. Carrying around a note with a PIN number written on it.

That sticky note that 6% of U.S. consumers carry around with them can easily slip into the wrong hands.

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