Money Stand

Keep your credit cards safe this Christmas

December 21, 2009

While we’re all hoping Santa Claus will break into our house and leave us a bounty of presents, there are plenty of other yuletide security-breaches that won’t leave such a warm glow. And despite credit cards getting savvier than ever, they will never be impenetrable. In fact, Wired has shown just how easy it is to fake a credit card, which will prove harrowing season at a time when people will need to rely on plastic far more than usual. CPP predict that 315,000 shoppers are likely to experience card fraud this winter, with the average sum lost hovering around the £600 mark.

Richard Hurley, communications manager of the UK’s Credit Industry Fraud Avoidance System, offers a timely warning: “the festive season traditionally reminds us of the high street threats of thieves and pickpockets stealing our wallets. We must, however, protect ourselves equally from their latter-day counterparts who target our identities.” CIFAS noted at the start of December that 68,000 people suffered from online identity theft in the first ten months 2009 – a 37% increase from the year before!

But just as serious a problem as actual fraud is the perception of fraud; if consumers have no faith in online security, they won’t be willing to take advantage of the many great online offers and settle for more expensive, but seemingly safer, real world purchases. A survey from Verisign claims 22% of British consumers are “held back” from shopping online this Christmas due to fears of having their identity stolen and 14% automatically distrust ecommerce sites on principle.

While is is always more comforting to have rely on picking up tangible goods from a trusted brick-and-mortar store, it isn’t as though real-world credit card purchases are truly much safer. Last month, the BBC reported on the largest credit card recall in history. In Germany, over 100,000 German credit cards were replaced due to the threat of personal data theft. The breach supposedly took place by a Spanish company, potentially posing a threat to any visitors to the country over the last few months.

What is important, no matter where you shop, is to spot the tell-tale signs that suggest your credit card is in safe hands. At present, there are numerous safeguards shoppers can look out for ensure they are as protected as possible. Most importantly, make sure the URL in the address bar either begins with https:// or has a padlock sign, to see that any data you enter will be encrypted. To check the security of the encryption, it is worth checking to see if the the payment service has been verified with an ISIS (Internet Shopping is Safe) or Shopsafe logo.

Jack Dorsey’s ‘Square’, a portable phone-based card-reader, stores no transaction data, making it far safer than any contemporary practice – so perhaps we are headed to a more secure future. But as they won’t be ready for Christmas, caution and common-sense are two of the best friends you can have over the holiday season.

This is a Guest Post from the team at Financial Facts, a great UK personal finance blog.  If you’d like to write a guest post for MoneyStand, get in touch!

Filed under: Credit Cards