Credit cards have many benefits for the savvy consumer, but they also come with a serious risk: fraud. Despite the best efforts of international financial institutions to reduce the risks associated with credit card use, fraud remains an international problem without an easy solution. Credit card fraud occurs when credit card information is stolen, or when a credit account is opened by a criminal in someone else s name. While both can be accomplished if a criminal obtains enough personal information to call the victim s bank, or to fill out a credit card application, the most common form of credit card fraud is known as skimming, whereby an employee of a store or restaurant copies customer credit card numbers for personal use or sale. Debit card users are also at risk for this type of fraud should their account information become compromised. While Egypt has relatively low rates of credit card use, and therefore less fraud, Egyptian credit card users and local bank branches have been impacted by recent issues with credit card theft in places like Dubai. In 2008, Dubai saw several instances of massive credit card fraud, including one case where $62 million was stolen when thieves set up a fraudulent website to obtain credit and debit card information from unknowing individuals. This case, and others like it, resulted in some banks being forced to block the cards of customers in Dubai, and those who had traveled to Dubai in a certain period at great inconvenience to all involved. The fact that such cases can occur in Dubai, which is both close to home and considered to be relatively advanced in banking security technology, raises concerns about credit card use here in Egypt. In Egypt, using cash is preferable in most cases as security, and communication between merchants, banks and credit card companies needs to be improved. Five star hotels and international retailers are safe places to use a card, but there is always a risk, said a customer service representative at a major international bank in Egypt on condition of anonymity. Major credit card companies have labored tirelessly to develop monitoring technology that can effectively identify fraudulent activity. Essentially, this technology works by correlating information about each customer s location, purchase history and spending habits with current transactions and then flagging purchases that fall outside a determined realm of feasibility. The under-regulated realm of the internet has been fertile ground for credit card fraud, with criminals using the internet to illegally obtain private credit card information as well as make fraudulent purchases via online merchants. Due to this risk, credit card companies work closely with online merchants to identify potentially fraudulent purchases before they are charged to a credit card. Red flags that merchants look for include inconsistencies between billing and shipping addresses, abnormally large orders, and changes in personal information on a user s online payment account. Transactions originating from certain countries and regions, including Nigeria, Russia, South America and Eastern Europe, are also given special attention by security systems as these areas have been linked to high instances of credit card fraud. Debit card users rely on their bank to protect their accounts from being compromised. Like credit card companies, banks collect information on the spending and cash-withdrawal habits of their clients, and use this information to identify the normal limits of each individual s possible purchases. When transactions that fall outside this realm occur, the bank may take the precaution of blocking the card to protect a customer s account. My bank stopped my debit card when they saw that something was purchased with it in Japan. I don't know how whoever used the card got the number, but the bank took care of it very effectively and just issued me a new card, said Mai El Shourbagy, a debit card user and customer of NGSB. Despite these security measures, the majority of credit and debit card fraud is identified by account holders who notice inconsistencies when checking their accounts or receiving statements in the mail. We encourage our customers to check their accounts regularly so as to report any unauthorized transactions immediately. Most of the time customers find out that someone has their information before the security systems detect any kind of fraud, so self-monitoring is essential, explained the bank representative In addition to being vigilant about checking account records, card users can take other precautions to prevent theft of their information. Common sense measures like not writing your pin number down, not letting other people use your card, not saving card information on public computers and only using your card at reliable merchants can prevent fraud, said the bank representative. When security measures fail, card users can take comfort in the fact that the financial consequences of fraud are normally minimal. In the case of credit card fraud, the merchant where the illegal transaction occurred is financially responsible for the charges. When a debit card is stolen, most banks hold customers liable to no more than LE 250 of unauthorized charges. As credit card use becomes more common throughout the country, security measures and coordination between merchants, banks and credit card companies can be expected to become more streamlined to provide more effective protection against fraud. Until then, card users much take precautions to protect themselves from the growing threat of credit card fraud. Tips for avoiding online fraud . Don t give out your credit card number online unless the site is a secure and reputable site. . Do your homework on the company to ensure that they are legitimate. . Send the merchant an e-mail to see if they have an active e-mail address. Be wary of sellers who use free e-mail services where a credit card wasn't required to open the account. . Be cautious when responding to special offers. . Be cautious when dealing with individuals/companies from outside your own country. . The safest way to purchase items via the internet is by credit card (as opposed to debit card) because you can often dispute the charges if something is wrong. . Make sure the transaction is secure when you electronically send your credit card numbers. . You should also keep a list of all your credit cards and account information along with the card issuer's contact information. If anything looks suspicious or you lose your credit card(s) you should contact the card issuer immediately.
