Real time text alerts crucial for fighting credit card fraud

CHICAGO (WLS) -- Real time text alerts can be crucial to fighting credit and debit card fraud. Fraudulent charges can rack up fast, so if you don't have text alerts on your phone you could be in jeopardy.

Consumer Investigator Jason Knowles found out after being a victim of credit card fraud.

He had one charge for $59.38 and just minutes after another for $76.75. Both were made at the same gas station in Chicago. However, at the time those charges were made he was using his credit card at lunch in Wauconda an hour away. He was alerted to the charges by text while he was on a friend's boat in the north suburb.

A Chase fraud expert told Knowles the bank sent the text alert after it detected "suspicious activity."

Knowles quickly replied "No" to the text, and then called the fraud hotline supplied in the message.

"The banks and credit cards want you to sign up for it so if there is a charge for the text you won't complain about it, but it is definitely a charge," said Professor Bill Kresse, a fraud expert at Governors State University. "But it is a charge well worth paying because as soon as they get any hint that there might be fraud with accounts they will send you that text with a way of responding to it so you can cut it off immediately."

Knowles' fraudulent transactions were reversed and the credit card was cancelled. A new card was sent automatically.

Chase also told Knowles that crooks used a physical card with his card number on it, otherwise known as a dummy card or a clone card.

"Until you responded to that text alert they were able to use the card to make purchases and charge them to your account," Kresse said.

And dummy cards are easy to make.

"They can use their own credit card or they can use a stolen credit card," Kresse explained. "Disable the chip and then, with a small investment of less than $200, you can get the machinery and software to encode your stolen numbers on to the back of that dummy card."

Those dummy cards are typically created after a criminal captures your information on a skimming device, which are usually at gas pumps or ATMS where you can still swipe the card.

RELATED: Card skimming incidents on the rise: report

Kresse said one way to avoid skimmers is to choose a pump in sight of the attendant.

"[Criminals] tend to place them at pumps that are out of the direct line of sight of the attendant booth at the gas station," he said.

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Consumer Investigator Jason Knowles has an I-Team Quick Tip to help you spot a credit card skimmer at the gas pump.

Under the Freedom of Information Act the I-Team found that Chicago police have responded to five reports of skimming devices so far in 2019. Most were discovered by random audits and technicians at ATMs. At one North Side bank, police said 76 cards were compromised.

If you do not have text alerts, you can fight the charges but it's harder when you have to file a dispute days later.

When fraud is flagged in real time your bank will most likely reverse the charges before they are posted as a final sale.

Also remember, more is at stake if the card is a debit card which could be depleting your checking account.
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