One in four people who use credit cards have experienced some level of fraudulent activity in their accounts over the past year, according to a new study.
The survey of 40,197 participants, by research firm JD Power, offers a sobering look at the dangers that consumers face as they head into the holiday shopping season.
The research also found that nearly three out of 10 banking customers with a checking, savings, or debit account have also seen some level of fraud.
“Financial institutions are spending billions on cybersecurity to address the constant threat of fraud, but there’s only so much they can do on their own,” JD Power Senior Director for Banking and Payment Intelligence Jennifer White said in a press release.
“Customers really need to do their part by making use of the various tools provided to protect their accounts, but many are still not aware of the resources that are out there to help them.”
Gen Z is most at risk
The study found that Gen Z is most at risk as 43 percent have experienced banking fraud and 41 percent have experienced credit card fraud.
The younger generation’s high fraud rates may have to do with its “increased use” of debit cards and person-to-person payment apps such as Venmo and CashApp, JD Power suggested.
Lax attitudes toward account safety from financial firms and consumers of all ages may be contributing to the alarming fraud rates, too.
For example, in the past 90 days, nearly 30 percent of credit card customers didn’t exercise security measures to protect their accounts, and half of bank customers haven’t received a prompt from their bank or card issuer to implement security measures, JD Power found.
How to protect yourself during holiday spending
With the holiday season underway and consumers ready to put their credit and debit cards to work, there are several simple steps you can take to protect your financial information.
Use virtual card numbers
First, if a credit card offers virtual card numbers, consider using them, Peter Horadan, CEO at identity verification firm Vouched, told The Independent in an email.
“This gives you a different card number to use with every merchant,” Horadan said. “Once the card is used with a given merchant, it can’t be used with any other – which means it can’t be stolen for fraud.”
Digital wallets offer protection
Horadan also recommends using digital wallets such as Google Wallet, Apple Wallet, and Samsung Wallet, which consumers can use for payments without giving a merchant their actual card number.
Real-time alerts can help you spot fraud
Another way to protect your transactions in the coming weeks is to set up real-time alerts through your bank or card issuer, Terri Luttrell, compliance and engagement director at banking software firm Abrigo, told The Independent in an email.
These alerts will let you know when big purchases are made, helping you address any transactions you didn’t make.
Act quickly if you suspect an unauthorized transaction
Yet even if you take all possible precautions to safeguard your financial information, fraud can still happen. When it does, Luttrell emphasized that quick action is critical.
“Report the unauthorized transaction as soon as you spot it,” she said. “The issuer can freeze or cancel the affected card, issue a new one, and initiate the fraud-investigation process.”