Last week, I received a phone call from a distressed family member. The first words out of his mouth were, “My credit card information was stolen again.” This is the second time this has happened to him within a year. And for the second time, he had to go through the incredibly time-consuming and annoying process of getting a new card and making sure that none of his connected accounts was affected. The crazy thing is both times, he had the credit card in his possession — at no point was it ever lost.
It seems like we’re always hearing of some new way hackers and thieves have developed to steal our credit card and banking information. Credit card fraud costs over $16 billion a year globally, with around 47% of the fraud occurring in the U.S.
Unfortunately, most experts believe these numbers will continue to increase. There are so many ways thieves can steal or access your information that it’s hard to keep track and protect yourself against them all. These include online hacking, skimmers in retail stores, even someone walking past you on the street with a card reader in their pocket.
But what if I told you a thief could easily steal your credit card information without doing any of those things? It’s true. It happened to the relative I mentioned above. Here is how he had his card hacked and why there was nothing he could do to prevent it.
It’s a Numbers Game
The first six numbers of a Visa card identity the financial institution that issued the card. The next seven–15 numbers are usually the account number of the cardholder, and the last digit is usually a check number.
Anyone could Google this information, so it’s not the least bit surprising that a criminal could simply guess your credit card number. And research has shown that it can be done in a matter of seconds.
Cybercriminals have developed sophisticated software that takes the first six numbers of a Visa card and then repeatedly tries to construct the rest of the card number until it finds a combination that works.
But how will the hackers know when they hit on a valid card number? Well, they’ve designed the software to test each card number on multiple websites. If one particular sequence is a dud, it will simply move on to the next combination of numbers.
Thanks to this same software, credit card expiration dates can be figured out by trying as few as 60 different combinations. And the CVV code can be deduced by attempting approximately 1,000 combinations — which a computer could do in practically no time at all. During testing of similar programs, one group of researchers was able to guess a valid card number in as little as six seconds.
This begs the question: What can you do to protect your card number? After all, it’s not like you have any control over its composition.
Play Your Cards Right
The first line of defense comes down to the credit card companies. If you have a MasterCard, you’ll be glad to know that MasterCard will block a card after 10 failed processing attempts. Unfortunately, other companies don’t have this protection in place, so a computer can make as many guesses as it takes.
The most important thing you can do to protect yourself is to put a freeze on your credit. This means that unless you contact the credit reporting agencies and give them explicit permission, no company will be able to run your credit. For example, when I appeared on ABC’s Shark Tank, the producers called me and said, “Jason, we’re trying to run your credit, but the credit reporting agency won’t allow us to.”
I’ve had a credit freeze in place for over 15 years, and clearly, I had forgotten to lift it. This was a great reminder that nobody can access my credit without permission, which is exactly the way I want it.
To place a freeze on your credit, you must contact each of the three major credit-reporting agencies: Equifax, Experian and TransUnion. After you’ve contacted all three agencies, they will respond to your request with a confirmation letter of your freeze, usually within 10 business days.
Each agency will also provide you with a PIN number to use when you need to allow someone access to your credit history. To temporarily release your credit freeze, simply call the credit agencies and give them your PIN.
Another thing you should do is check your credit card statements each month for any unauthorized transactions. If your card is compromised, the sooner you catch it, the better.
And lastly, here’s one final piece of advice. Now that most credit cards have RFID chips in them, thieves can also digitally obtain your credit card information when they’re in close proximity to you using a hand-held chip reader. I recommend buying an RFID-blocking wallet — or you can carry an RFID-blocking card in your wallet, which is what I do.
These simple precautions don’t require much time or money, and they could potentially save you a great deal of each if your credit card information is stolen. So take action today and save yourself from a major headache later.