'Tis the season for fraud — how to keep your credit card secure for the holidays
As you work your way through your holiday shopping list this year, take a moment to consider that while most of us may be filled with the spirit of giving, some nefarious types are all about taking.
According to fraud prevention technology company Forter, Dec. 24 and 25 are among the most popular days for financial fraudsters to strike: Fraud rates spike as much as 200% on Christmas Eve and Christmas compared to average rates.
One way to reduce the risk of holiday fraud is by using a mobile wallet, which boasts several layers of protection. When entering card details into most mobile-wallet apps, the data is encrypted and sent to the company maintaining the wallet. The information is then sent to the card's payment network, which assigns a Device Account Number unique to your phone. When you use your mobile wallet to make a purchase, the wallet generates a one-time security code for that purchase and sends it, along with your Device Account Number, to the payment network.
Using a mobile wallet is more secure because: 1) You're not sharing any account information with the merchant; 2) You're not physically handing your card to anyone; and 3) The data transmitted is both encrypted and unique to that transaction, meaning that even if the encryption is cracked, the data is only good for one purchase.
Even so, no technology is impervious to fraud. Here are five ways mobile wallets can help you safeguard your data and accounts.
1. Know your liability
With credit cards, your liability for unauthorized charges will be limited to $50 regardless of when you report the problem. With debit cards, your liability for unauthorized charges is also limited to $50 as long as you report the charge within two business days of discovering it. If you report the unauthorized charges more than two days after discovering them, your liability jumps to $500. If you wait more than 60 days from receiving your statement to report the unauthorized charges, you're out of luck and liable for the full amount.
2. Only download trusted apps
Counterfeit retail apps are sneaking into app stores just in time for the holidays. You can avoid these fake apps by going directly to the store or bank website and following the company-provided link to download the apps directly. Needless to say, don't download wallet apps from companies you don't recognize.
3. Don't ignore notifications
Some mobile wallets send instant notifications of transactions. Pay attention — they can be your early warning system to detect potential fraud or identity theft. For example, The Capital One Wallet notifications allow you to track purchases in real time, whether they belong to you, another cardholder or an unauthorized user. If you spot something suspicious, contact your bank right away to prevent further unauthorized charges.
4. Use remote card lock
Almost half of those who responded to a survey by Capital One Wallet said they have, at one point, thought they lost their credit card. More than a third indicated they've actually lost a credit card. Either way, some wallet apps allow you to instantly lock your credit card if you suspect it's been compromised or if you happen to misplace it. You can also turn it back on once you find your card.
5. Lock your phone
Speaking of locks, treat your phone like your home — just as you would when you leave your house, set your device to automatically lock if it's not being used. Don't share your passcode or PIN with anyone. If you happen to lose your phone, many smartphone manufacturers let you locate, lock or wipe the information on your mobile device remotely.
Unless noted otherwise in this post, Capital One is not affiliated with, nor is it endorsed by, any of the companies mentioned. All trademarks and other intellectual property used or displayed are the ownership of their respective owners.