Credit card theft has become one of the most common types of fraud, with the U.S. projected to lose a staggering $165 billion in the coming 10 years due to card abuse. 

While the statistics on stolen credit card numbers seem bleak, you can take control and protect your payments. Our guide will help you recognize payment card vulnerabilities and stay on guard. We’ll discuss:

• How are credit card numbers stolen or hacked?
• What are the signs of credit card theft?
• What are the measures to follow if someone has stolen your credit card number and used it?

We will also share some effective safety tips and discuss how virtual cards can help protect you from card fraud.

How Are Credit Card Numbers Stolen or Hacked?

Card scammers and thieves are skilled at finding the existing vulnerabilities within payment systems. Becoming familiar with their techniques can help you retain control over your money.

From physical theft to advanced cybercrime, there are multiple methods fraudsters use to intercept data from credit, debit, and prepaid cards. Here are five of the most common methods:

1. Data breaches
2. Card skimming theft
3. Hacks carried out through a public Wi-Fi
4. Card phishing phone calls and emails
5. Spyware and malware

Data Breaches

A data breach occurs when confidential or protected information is exposed to unauthorized people or endpoints. According to a 2021 report by Identity Theft Resource Center^® (ITRC), the number of data breaches affecting businesses and individuals increased dramatically in the 2020–2021 period, which suggests that malicious actors have become more aggressive with their schemes.

When it comes to stealing credit and debit card data, the most common targets are:

Source: Khwanchai Phanthong

Card Skimming Theft

Card skimming is a type of physical data breach carried out with a device created to steal cardholders’ card info. The device, called a card skimmer, is a small chip that can be:

• Fitted in a machine that looks like a card reader
• Attached to an ATM, gas pump, or other point-of-sale (POS) terminals

The card skimmer illegally captures the credentials of cards inserted into the machine. The stolen data is then used to create fake credit or debit cards and commit fraudulent transactions.

Hacks Carried Out Through a Public Wi-Fi

Using a public Wi-Fi network for payments is a major security risk as hackers can easily intercept the transmitted data. Unsecured Wi-Fi networks are prone to man-in-the-middle attacks, where a hacker intercepts the exchange between two parties—often by compromising the router—and gains access to sensitive data.

There are three types of data typically stolen on public networks:

1. Login credentials
2. Payment data (card details, passcode, etc.)
3. Personal data (names, photos, Social Security numbers)

Card Phishing Phone Calls and Emails

Phishing is a method used by scammers to trick users into trusting them and providing their personal information or account data. 

Phishing for card details usually happens via emails, phone calls, and texts when bad actors pose as a trusted organization and send fake messages prompting targets to click a link or open an attachment. Once affected users’ personal info is obtained, fraudsters can log into those users’ accounts or even install malware into their systems to steal more sensitive data. 

Phishing messages can lead to heavy consequences, such as identity theft.

Spyware and Malware

Spyware and malware attacks are another common tactic used by scammers to steal data, and they are typically a result of phishing schemes.

Scammers start by prompting users to download malware, which is often disguised as a harmless email attachment. Once it starts running on your machine, the malware collects data such as used keystrokes, browser history, and shopping habits. Collecting used keystrokes is how hackers typically guess credit card numbers, PINs, and passwords.

How To Know if Someone Has Stolen Your Credit or Debit Card Number

It’s easy to lose track of transactions on your credit or debit card, especially if you use multiple cards. You may not notice your credit card has been compromised until it gets declined or you start receiving monthly bills for transactions you never authorized.

Here are some common warning signs that point toward card theft:

• Unexplained transactions—Never ignore suspicious transactions on your credit card bills or bank account statements, no matter how trivial they seem. For example, an unrecognizable $5 charge may appear insignificant, but it might be a hacker checking the validity of your card number before selling it on the dark web.
• Calls from unknown creditors or merchants—If you’ve been receiving calls from random vendors demanding money, it may not necessarily be a mistake. Verify if the calls have anything to do with unpaid credit card debt going into collections.
• Hard pulls on your credit report—A hard pull is a type of credit inquiry required for activities like opening a new bank account or requesting a loan. Unauthorized credit inquiries are often linked to identity thefts and, by extension, credit card fraud.
• Unexpected packages—If you’re receiving packages you didn’t order, that could be another sign that your card information has been compromised. These fraudulent sellers typically obtain consumer data (like credit card info) from the dark web to generate fake orders.

Source: cottonbro studio

Handling Compromised Payment Cards—Here’s What To Do

If you suspect your card details have been stolen, you should immediately call your bank or credit card company. They can freeze the card and investigate further to trace usage details, suspicious activities, and other signs of theft.

Calling your card provider is also important because it limits your financial liability. Under federal law, a credit card user’s liability generally may be limited to $50 if they report the fraud within 60 days. In the case of debit card theft, your legal liability may be as high as:

1. $0 if you report the theft before unauthorized charges are made
2. $50 if you report within 2 days
3. $500 if reported within 60 days
4. Potentially unlimited if reported after 60 days

Ways To Avoid or Mitigate Card Thefts

Consider these general security measures to reduce the risk of card fraud:

• Avoid any kind of transactions on public Wi-Fi networks
• Never share card details over the phone, in an email, or on an unknown website
• Be on the lookout for new card-skimming devices and avoid suspicious machines
• Never download suspicious files on the internet
• Verify the security of a merchant’s website by checking if the URL contains “https” (secured) and not “http” (unsecured) and/or is preceded by a lock symbol

While these methods can protect you to an extent, the two most effective ways to fight card fraud are:

1. Activating fraud alert notifications
2. Using virtual payment cards

Activating Fraud Alert Notifications

Most banks and credit card vendors offer you the option to receive fraud alert notifications—email or text alerts—warning you of potential card theft. 

According to Security.org’s 2021 Credit Card Fraud Report, users with enabled alerts were more successful in preventing money loss than those without. Unauthorized charges were not blocked for 81% of users who didn’t have the alerts turned on.

If you’re unable to block the fraudulent charges, there’s no guarantee they will be refunded or removed from your statement. Resolving an unauthorized transaction involves opening a claim with your card provider, which may result in an investigation and a potentially lengthy chargeback process.

Using Virtual Payment Cards

Millions of customers’ card data have been compromised in the past decade. No matter how vigilant you are, there is nothing you can do to prevent a data breach on a merchant’s website, but using a virtual card can shield your actual card data from being exposed.

A virtual card is a payment method you can use for online and over-the-phone purchases without revealing your actual card/account data to the merchant. The card contains a randomly generated 16-digit number with an expiration date and CVV. While the virtual card is tied to your real account, the merchant or a potential hacker can't access your actual bank details. If the security on the website becomes compromised, the hacker only has access to the virtual card, helping you protect your actual financial data from being stolen or misused.

Depending on the virtual card provider, you can customize details like spending limits and even pause/close the card at your convenience.

Stay in Control—Use Privacy Virtual Cards To Mask Your Card Details

Don’t put your real credit or debit card credentials at risk—hide them with Privacy Virtual Cards. Privacy enables you to generate virtual cards instantly. The cards belong to the Visa^® or Mastercard^® network and are accepted by vendors that accept U.S. credit cards.

Source: Andrea Piacquadio

Privacy offers Merchant-Locked and Single-Use virtual cards that give you the extra layer of security in case a merchant website experiences a breach—here’s how:

Privacy Cards can be easily paused or closed at any time. If you notice suspicious activity, you can pause or close your virtual card in a few clicks—–via either Privacy’s web app or mobile app—and Privacy will decline any subsequent payment requests on the card. You won’t have to block and replace your actual payment card, which is often a complicated and lengthy process.

The pausing/closing feature is especially useful if a specific Privacy Card has been exposed in a data breach or you want to block hidden/unwanted subscription charges. Keep in mind that you still need to reach out to the subscription provider if you’d like to cancel the service.

Sign up to create your first Privacy Card!

Take Control of Your Finances With Privacy

You can set spending limits on your Privacy Card to prevent overspending. You can also share your virtual card details with family members without revealing your underlying bank information. This can be especially useful for parents wanting to manage their children's online spending with full control of the card settings.

Privacy users can track their spending in real time. Get Privacy’s iOS or Android app on your phone and receive alerts and notifications of account activity to stay on top of any suspicious transactions.

How To Use Privacy Cards

Making payments online is faster, safer, and easier with Privacy Virtual Cards because of the straightforward interface and multi-platform accessibility. 

Here’s how to create a Privacy Card:

1. Create a Privacy account
2. Provide your KYC info as required by law
3. Connect your funding source, such as a bank account or debit card
4. Request and create a customized Privacy Card

For seamless checkouts, download Privacy’s browser extension—it instantaneously creates unique virtual card numbers and autofills the details for you, preventing you from having to look for your wallet when making a quick and spontaneous purchase online.

Privacy currently has multiple plans—explore more details on the pricing page.

Source: Ksenia Chernaya

Privacy is a BBB^®-accredited company with a dedicated customer support team. As a company handling sensitive payment data, Privacy complies with PCI-DSS protocols and exceeds additional industry security standards to ensure the safety of your data.

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