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What Really Happens After Your Credit Card Is Stolen

(consider this) credits cards are: Some major retailers, such as Target and The Home Depot, have already been hacked for credit card information. Getty/Alex Wong

After a hacker steals your credit card number, you may receive an email, text, or phone call from your bank to alert you of criminal or fraudulent activity with your credit card.

This is a helpful and necessary measure implemented by financial institutions to help protect your accounts. However, sometimes the alert is too late and the cybercriminal has already replicated your card and gone on a shopping spree. Have you wondered though, what exactly happens to your stolen credit card number, and what is it worth to a criminal?

Well, we took a peek inside the cybercriminal underground to explore this interesting and frightening reality.

Cybercriminals have to race against the clock to use your credit card information before you or your bank shuts down the card. So, where does a stolen credit card go when it gets into the wrong hands?

Credit card thieves have to move fast once they have your data. Here's a look at their methods:

  1. They take your stolen card data and add it to their stockpile.
  2. They sell a group of credit card numbers to other cybercriminals on websites designed to process these transactions (think of it as an eBay for eVil).
  3. The buyer of the group may resell them again or begin using the stolen data at online retailers.
  4. The criminals also have hardware on hand to print fake plastic cards in case they want to use the them at physical stores.
  5. The criminals make purchases of goods that they can resell for quick cash.

(consider this) credits cards are: Not all credit cards are worth the same. The more info criminals have about you, the better deal it is. Flickr / John Lambert Pearson

How criminals price cards

Once they have your card data, the criminals selling the info have to price it. And not all credit cards are worth the same price to criminals who are buying. Here's how they determine what's "good."

  1. The criminal who wants to purchase a batch of cards may make a few small transactions to test if the card is still active, or known as "live."
  1. If the card is sold with the victim's address and additional information can be appended to it, such as mother's maiden name, SSN, and date of birth, those additional details make the card more valuable.
  1. If the criminal selling the card can also provide purchasing behaviors, that's even better. For example, the behavior data may indicate that you routinely used your card at Target and Lowes in South Carolina. By adding your shopping habits to the card, the card is worth even more money because the criminals know that the victim or financial institution might miss a fraudulent charge if they can pretend they are you and shop like you in your hometown.

Eventually, the card data reaches the hands of criminals who can use the cards and associated data to commit fraud. Armed with these stolen cards, the criminals have the tools to make fraudulent purchases of goods that can be resold, including gift cards and consumer electronics. Once those goods are sold, the value of the card is realized. All of the intermediate reselling of card data in the supply chain hinges on the ultimate purchase and reselling of goods in this process.

How retailers can protect themselves & their customers

If you have a business that takes credit card information from your customers, Payment Card Industry (PCI) compliance is often not enough to protect your customers' debit and credit card data. Consider taking these three steps to better protect this data:

  1. Make sure that any remote access to your network does not have a side door that leads to your credit card data.
  2. Train your employees on how to spot suspicious emails to avoid letting the cybercriminals in through your trusted staff.
  3. Practice a credit card and debit card theft disaster to make sure you know what to do in the event your systems are breached.

(consider this) credits cards are: Once criminals have your cards, they might try and copy your shopping habits to avoid raising suspicion. Dru Bloomfield via Flickr

Cybercriminals will continue to hit retailers, because that is where the money is and their tactics have worked so far - they have breached Target, Home Depot, and according to law enforcement, potentially thousands of other companies.

The key is not to become immune to the news of another data breach or cyber incident at your favorite store. These incidents are damaging to you as the retailer, your bank and, ultimately, your wallet. Overall, NPR reporter Elise Hu gets it right: "the damage does fall disproportionately on retailers. They spend a lot of money on security to prevent breaches of their payment systems and keep their names out of hacking-related news."

Consumers can't always rely on an alert from their bank to let them know their credit card has been stolen. For their own good, it's up to consumers to keep an eye on their bank and credit card statements to catch any fraudulent charges as they come in - and work to correct the damage immediately, which means contacting the financial institution and reporting the fraud, and closing the card before further damage can be done.

If your Social Security number was stolen in a breach, you also could be at risk for a criminal to open new accounts in your name. Checking your credit reports regularly can help you spot unfamiliar accounts so you can shut them down. You're entitled to your credit reports for free every year from the three major credit reporting agencies.


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How To Keep Your Credit Cards Safe When Shopping Online

(consider this) credits cards are:There are few things in the world that feel quite as terrible as having your credit cards stolen. It’s bad enough to have them stolen due to your own carelessness – like leaving the car door unlocked with your wallet sitting in plain view on the seat. But when your credit card information gets stolen online, it’s a whole different story.

The following are a few simple steps how to keep your credit cards safe when shopping online.

The last thing you should ever do is shop online with a computer that’s riddled with spyware or keylogging software. Some of these viruses and malicious software applications look specifically for transmitted credit card information, so if you buy items with your credit card on a computer that you’re not certain is free of viruses or spyware, you will be placing your credit card information at risk.

The best option is to only shop online using your own computer, and before doing so, take the time to clean up and secure your PC using the latest antivirus and spyware removal tools.

MakeUseOf’s preferred free antivirus softare of choice is AVG Anti-Virus. Check out Mark’s review of AVG here. Many people have claimed that even the free version of AVG detected viruses that Norton missed. Aside from the fact that it’s a great anti-virus program, the key features that specifically protect your credit card information include the fact that it removes malicious tracking cookies from your browser, and it will alert you if any search results contain unsafe websites. Of course, it also has a very cool front end too.

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Once you’ve installed the anti-virus software and cleaned up any of the lingering viruses you’ve got on your PC, the next step is to wipe out malicious adware and spyware that’s lying dormant, just waiting for you to start transmitting 16-digit credit card numbers.

To accomplish this task, there are a number of additional software apps that you should download and install from Aibek’s list of 7 Security Tools You Absolutely Must Have 7 Essential Security Downloads You MUST Have Installed 7 Essential Security Downloads You MUST Have Installed Read More . For starters, to protect your PC, the best apps are Malwarebytes Anti-Malware and Spyware Terminator. If you don’t already have these two applications, install them and run them right now before setting another foot in any online store.

Even if you are very careful online, you’re bound to occasionally end up with infected files, such as the ones Malwarebytes found on my own laptop.

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You never know which of these infections could put your credit card transaction at risk. The Spyware Terminator is equally effective at finding and removing spyware from your system.

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Think about it, how comfortable would you feel typing your 16 digit credit card number and 4 digit expiration date into the online form if you knew that there was a “Computer Monitor Keylogger” running in the background on your computer? Don’t take any risks, install these software apps and clean up your PC.

Once you know your computer is clean of any malicious software, the next level of security that you need to enable is your browser. There are many different browsers to consider, but for the sake of this article I’ll consider the two most popular, Internet Explorer and Firefox. If you’ve already installed Spyware Terminator above, then you’ve likely discovered the Web Security Guard add-on in both Internet Explorer and Firefox, which gets installed automatically.

When you’re shopping on any website and you want to make a purchase, you simply click on the Web Security Guard button in the Crawler toolbar, and you’re alerted as to whether the site is reported safe or not.

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When you click to “view website info,” the application provides a full report of the source server’s IP and geographic location (city/state) as well as the server visitor load, so that you know you’re not dealing with some fly-by-night operation.

Another great add-on for Firefox that was reviewed by Dave here Keeping Safe on the Web: 8 Firefox Addons for Privacy and Security Keeping Safe on the Web: 8 Firefox Addons for Privacy and Security Read More , is the NoScript app. One of the most difficult aspects of locking down your browser from running Javascript, Java and other active scripts is that you do want to allow those scripts on some websites that you know are safe. NoScript lets you open up scripting capabilities for those trusted domains, but blocks harmful scripts from running when you are visiting a brand new website that you aren’t sure you can trust. The warning pops up at the bottom of the screen, and you just click “options9rdquo; to select whether or not to enable scripts for that site.

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At first, as you visit your usual websites, you’ll need to “allow9rdquo; scripting on those sites. But after a while, you’ll completely forget this add-on is running in the background until you land on a malicious website and it saves you from a script installing anything on your PC that can place your online financial transactions at risk.

Another great security add-on from Aibek’s list of 7 security tools is WOT. WOT stands for “Web of Trust,” and it’s available for either FireFox or Internet Explorer. This is probably one of the best add-ons that you can use to be sure that your credit card information is safe, because the ratings at WOT are based on trustworthiness and reputation of a website. Obviously, it wouldn’t make a lot of sense to offer your credit card information to a business that most people rate as untrustworthy.

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Ratings are pretty straightforward, with green as very trustworthy, orange as unsatisfactory, and red as poor or very poor reputation.

So you’ve cleaned up your computer, you’ve installed extra security through browser add-ons, what else can you do to keep your credit card information safe online? Simple – use common sense. When you’re looking for products to buy online, always make sure that there’s a phone number or some other method to contact someone from the company. Never provide your credit card information through an anonymous online form that offers you no way to interact with a real person.

Additionally, all browsers are configured these days with a notification that you’re on a secure website, meaning the transmitted data is encrypted so that nothing in the “middle9rdquo; can view the data. You know that the connection is secure when you see the “lock9rdquo; icon in the lower bar of your browser.

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The examples shown above are Internet Explorer on the left and Firefox on the right. In both cases you can see the small padlock appear whenever your connection is secure. Never enter your credit card information into a website unless that padlock icon is at the bottom of the screen. Otherwise, you’ll be placing your credit card number at risk of getting intercepted as the transmission bounces from server to server through the Internet.

Remember, when it comes to the security of your credit card information online, there’s no such thing as too much security. Make use of all of the tools that are at your disposal and you can guarantee that your online shopping experience will be both fun and secure.

Do you have any methods you use to keep your credit card information safe when you shop online? Share your favorite applications or techniques in the comments section below.

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