With the increasing adoption of plastic money, there’s also an increase in the number of credit card data breaches across the world. In 2017, the credit-reporting agency Equifax had a massive breach that compromised information, such as credit card details and Social Security numbers, of almost 50% of Americans. However, this was not an isolated incident. Most recently, the food-delivery service DoorDash confirmed a data breach that compromised the personal data of roughly 4.9 million customers and workers. It added that the leaked data might contain names, phone numbers, delivery addresses, the last four digits of customers’ credit cards and passwords in an encrypted form. However, the company added that the leaked information isn’t enough for the fraudsters to wrongly charge customer accounts. Yet, the company is contacting the affected DoorDashers and asking them to change their passwords. And, rightly so.
Yes, credit card data breaches are very common. Every year, millions of people fall victim to frauds that may cost them dearly.
But First, What Is a Credit Card Data Breach?
A data breach can be defined as an incident in which sensitive information, such as confidential personal information that you may have saved with a merchant, is stolen. Such data could include your credit card number, email password, full name, address, etc.
A fraudster can use this information to steal your credit card information and make unauthorised purchases on your card. With your personal details, they can also open new accounts in your name and make illegal transactions, landing you with a hefty bill and potentially impacting your credit score, too. Fortunately, in most cases, nothing happens to your personal account after a data breach is announced by the affected company. However, once your information is leaked, unless you take action to change your passwords and other details, you are, in a way, living on the edge and just hoping to be lucky that nothing goes wrong.
Data Breach Does Not Affect Your Credit Directly
You read that right; a data breach does not directly impact your credit. The impact depends upon how the stolen information is used, if it is used at all, and the type of information that has leaked.
1. Stolen Personal Information
Personal information includes details such as name, address, and birthdates, which are not enough on their own for a thief to commit identity theft. Yet, a fraudster may use this information to carry out a phishing attack and coax you into sharing additional information, such as your account or credit card information or Aadhar number, which will enable them to defraud you of your money.
2. Stolen Usernames and Passwords
Stolen usernames and passwords from a free blog site may not impact you at all. However, if the details pertain to your bank account or credit card account, it is definitely a risk. Losing the login details for your email account is also high-risk, as fraudsters can intercept important information from your email to defraud you.
In case you suspect your login details have been compromised, do go ahead and change your password immediately. It is, anyway, recommended to change your passwords periodically to keep your accounts safe.
3. Stolen Email Addresses
While your email address isn’t enough for a fraudster to commit a credit card fraud, if your email id has been stolen in a credit card data breach, the thief might try to phish information from you by sending fake emails that appear to be from legitimate businesses.
We urge you not to click on any such emails, however genuine they may seem, before contacting the concerned financial institution. It is also recommended to make any payments directly from the merchant’s site rather than accessing the payment link from your email after a breach has been announced.
4. Stolen Debit and Credit Card Numbers
Once again, stolen credit or debit card numbers may not be enough to commit fraud. A thief also requires additional information, such as your name, expiry date, and the CVV that’s printed on the backside of the card. However, if all this information is stolen in a credit card data breach, the thief could use it to create a fake card and make fraudulent purchases. Encrypted pins may also be taken in a credit card data breach, and the threat of fraud depends upon the level of encryption used by the merchant.
In case your credit or debit card number is stolen, do monitor your credit card activity regularly and report any unauthorised charges immediately to your credit card issuer to limit your liability for the theft.
Here are some top tips for detecting a credit card fraud:
- Review your credit card statement every month and check for any suspicious or unfamiliar transactions.
- Sign up for an auto-alert service that will alert you each time there’s a transaction on your card.
- Don’t click on suspicious links or share sensitive financial and personal information on the phone.
- Check your credit report regularly for any unfamiliar enquiries or accounts. You can access your credit report for free from any of the credit reporting bureaus, once annually.