Credit Card Fraud Part 2: Concrete Measures to Prevent Fraud

Now that we understand the methods of fraud, let's organize the concrete defensive measures that we as users can take. Those who make full use of credit cards, such as point-focused card enthusiasts, mileage collectors, and business professionals, should protect their valuable cards and assets with the following measures.

Utilizing Instant Usage Notifications

Choose cards that send notifications via email or app every time they are used, such as the Amex or Sumitomo Mitsui cards I own. With real-time notifications, you can notice fraud immediately if it occurs. If you use a card without notifications, there is a risk you won't notice until it appears on your web statement days later.
Please check if similar settings are available for the cards you use. If they cannot be set, it is important to develop a habit of checking your usage statements frequently.

Setting Usage Limits and Temporary Suspension

For cards you don't use often or debit cards, it is safer to lower the usage limit to the bare minimum or keep them in a suspended state via the app.
For example, many debit and prepaid cards, including those from SBI Sumishin Net Bank, have features that allow users to set their own daily usage limit to 0 yen or suspend usage with a single tap.
By making these settings, even if a suspicious charge occurs, it will be automatically blocked, preventing damage.
In fact, I was able to prevent fraud before it happened by utilizing this "usage suspension" feature.

Even with credit cards, some, like Sumitomo Mitsui Card, allow you to temporarily lower your available credit limit. Consider raising the limit only when traveling or making large purchases, and keeping it low during normal times. Also, for many cards, you can immediately suspend usage online or via an app if lost. If you notice a suspicious transaction, being able to stop it via an app before calling the card company can prevent the damage from spreading.

Limiting the Number of Cards You Manage

When you have multiple cards for the purpose of earning points, management tends to become complicated. Therefore, limiting the number of cards to what you can manage yourself is an important part of risk management.
In my case, I have narrowed my credit cards down to four, and other than those, I only hold the bare minimum of debit and prepaid cards. For these cards, I always set the limit to 0 yen or keep them in a suspended state, only temporarily resuming usage when I need to use them. By doing this, I narrow down what I actually need to manage, minimizing both risk and effort.

By doing this, I narrow down the cards I need to check daily, preventing me from missing any fraudulent activity. Rather than holding onto many unused cards just because you "went to the trouble of making them," it is safer to only keep the cards you actually use active. If you must hold many cards, manage the list of cards, closing dates, and withdrawal dates in a mobile memo or household account app, and set a rule to check your statements at least once a month.

Be Careful How You Handle Card Information

When entering your card number online, always verify the legitimacy of the site. Check if the URL is the official domain, if there are suspicious redirects, and if it is encrypted with SSL. It is also safer to avoid making card payments in free Wi-Fi environments used by many people. If you really want to purchase from a site you don't trust, there is a way to use a prepaid card or virtual card. For example, Revolut's virtual card can issue a card number different from your physical card, which you can deactivate immediately after use. It is also effective to use a trusted payment service like PayPal or Amazon Pay to pay without revealing your card number to the shop.

By the way, I personally like PayPal. I created an account 7 or 8 years ago when I made a purchase on an overseas site, and I have used it as needed ever since.
Recently, it has become a small habit in our home for my wife and me to enjoy Chinese dramas together after the children have gone to sleep.
When I forget to record them, or when there is an "important episode" (lol) that I can't wait to see until the next broadcast, I sometimes use Chinese video streaming sites that handle works with Japanese subtitles.

PayPal is reliable at times like that. Since I don't have to enter my credit card number directly, I can pay with peace of mind.
Also, I make sure to delete my credit card information from PayPal as soon as the payment is complete, so I don't have to worry about security.
After all, you want to avoid entering your card number directly on any site where you feel even the slightest bit of anxiety.

Even at physical stores, if you are worried about handing over your card at a store you don't trust, use a card that supports contactless payment (NFC) or smartphone payment, and take steps to avoid exposing your card number or magnetic information to the other party. Of course, never open links in suspicious emails or SMS is the first priority. Even for emails posing as "urgent contact" from a card company, make it a habit to check the situation from the official site or app, and do not carelessly touch links or attachments in emails.

Strong Passwords and Identity Authentication

Strictly manage the IDs and passwords you use to log in to credit card online services (web statements and point management sites). Reusing passwords is strictly prohibited, and you should avoid words that are easy to guess or your date of birth. Also, do not share the password for the identity authentication service (3D Secure) provided by the card company with others, and store it in a safe way. If this password is leaked through phishing or similar means, you may not be eligible for compensation in the event of fraud.

Recently, 3D Secure is also shifting from passwords to one-time codes or biometric authentication, but in any case, handle it strictly so that others do not know it.

Utilizing Defensive Services Provided by Card Companies

Many card companies offer additional security services that allow users to control their usage range in detail.
For example, with Sumitomo Mitsui Card's "Anshin Usage Restriction Service," you can freely set whether or not to allow overseas usage or online payments.

I personally hold an ANA SFC VISA Gold card, and during periods when I am not going abroad, I always keep the restrict usage at overseas stores setting turned on. Since I mainly use Amex and JAL cards, I use the ANA card mainly when purchasing ANA airline tickets, and I rarely use it for online shopping otherwise. For this reason, I also keep the restrict online shopping usage setting turned on at all times. Furthermore, for the family card of the same card held by my wife, I also perform the same restriction settings in bulk from my management screen.

For my main card, Amex, I use the "push notification for card payment" feature, and I have set it so that I receive a notification immediately every time a payment is made. This allows me to notice suspicious usage by others in real-time, which makes a significant difference in my daily peace of mind.

My other main card, the JAL Card issued by Mitsubishi UFJ NICOS, also supports the "Online Shopping Authentication Service (so-called 3D Secure)," and when making online payments, you are required to enter an authentication code sent via SMS or email as an additional identity verification step. Because of this mechanism, even if your card number and expiration date are known to a third party, the authentication code that only you can receive is required, creating a significant barrier against fraudulent use.

Actively utilizing these security tools from each company and carefully adjusting settings according to the role and usage scenario of each card is extremely effective in reducing the risk of fraud. Notification functions and restriction settings are no longer just "options"; we have entered an era where they should be considered standard equipment for modern credit card usage.

There is peace of mind that can be protected with a little ingenuity and configuration. By maximizing the performance of your cards in terms of "defense" as well, you should be able to enjoy earning points and mileage activities with even greater peace of mind.

Utilizing RFID-blocking wallets, card cases, and shoulder bags to prevent skimming when traveling abroad

When traveling abroad with a credit card, one thing to be particularly careful about as a fraud prevention measure is skimming damage. Skimming is a method of stealing card information contactlessly, and sufficient vigilance is required, especially in crowded tourist spots, public transportation, and airports. There have been reports of criminals hiding RFID readers (IC chip scanners) in bags or pockets and scanning them as they approach you without your knowledge.

To prepare for such risks, utilizing wallets, card cases, and bags with anti-skimming functions is no longer an "option" but a "necessity." When I go abroad, I practice the following two measures depending on the climate and clothing.

[1] OGON anti-skimming card case x North Face waterproof jacket inner pocket

For autumn and winter trips, I love using a North Face waterproof jacket (Mountain Jacket series). This jacket has multiple inner pockets and is excellent in terms of waterproofing and storage, making it very convenient for carrying valuables.

I store my OGON Designs anti-skimming aluminum card case in that inner pocket. The OGON case is made of robust aluminum material and is specially designed with RFID blocking functionality. It also has high physical durability, allowing me to carry my cards safely and smartly without opening my bag at airports or in crowds.

Ideally, you should carefully select and carry only 1 or 2 main cards, but in my case, I always carry the following three:

• Hilton Amex Premium (for main payments abroad)

• JAL JGC Mastercard (issued by Mitsubishi UFJ NICOS) (backup when Amex is not accepted, and oneworld elite membership card)

• ANA SFC Visa Gold (issued by Sumitomo Mitsui Card) (Star Alliance elite membership card and for meeting overseas travel insurance usage conditions)

This configuration is necessary to prove the application conditions for overseas travel insurance and airline elite membership status. In fact, I once had an experience in the US where a oneworld flight was delayed and I was rebooked on a Star Alliance flight, and I was able to handle it smoothly because I held both JGC and SFC. Through this incident, I realized the importance of having a system that can support multiple alliances.

In addition to credit cards, I also bring a JAL Pay prepaid card (formerly JAL Global WALLET) for local ATM cash withdrawals and emergencies. With JAL Pay, I can charge Japanese yen from my smartphone app just before use, exchange it immediately, and withdraw it as foreign currency. The exchange rate is not the best, but I only need to exchange what I need, and I can also earn JAL miles, so I am personally satisfied with it.

Come to think of it, lately, except for hotel tips, I have almost no opportunities to use cash. In this sense, I feel that the importance of card management and skimming countermeasures is increasing more and more.

[2] Shoulder bag with anti-skimming pocket

On the other hand, during times like summer when I am lightly dressed and cannot wear a jacket, I utilize a shoulder bag with a built-in anti-skimming material (RFID blocking lining). I use the following one that I purchased on Amazon.

This bag has a crossbody design that fits snugly to the body and also has a storage pocket on the back, which is effective as a pickpocket countermeasure. Furthermore, a dedicated pocket with an RFID blocking function is placed in the center main storage compartment, so cards are safe.

Especially in tourist spots in Southeast Asia and Europe, "walking around with a wallet in your pants pocket" is extremely high-risk, and security awareness is also required when choosing a bag. When thinking about "how to carry things safely," this type of bag is a very reassuring ally.

Utilizing Household Account Book and Point Management Apps

If you are a card enthusiast who loves points, these services are highly compatible with point management apps and household account book apps. Services like Moneytree and Money Forward ME allow you to view usage statements for multiple cards in one place. If you set up links with the web statements for each card, you can check transaction history centrally, which helps you notice irregularities, such as "Wait, did I make this purchase with this card?" You can also notice sudden drops in point balances (if points were used without your permission), so it also serves as a countermeasure against point thieves.

Of course, there is no denying that there is a risk in entrusting your card login information to these external services. While there is a certain level of reliability in the security of data linking, it might not be for those who are worried. However, if you feel the convenience outweighs that, it is worth considering as one of your options.

In our home, we do not use such external linking services, but instead adopt a simple management style of utilizing only a household account book app. All cards are issued in my name, and I have issued a family card for my wife. I check the usage statements at least once a week using the official app of each card company, and share any new usage history with my wife each time. Based on that, my wife records it in the household account book app installed on her smartphone.

Through this system, not only has it become easier for us as a couple to share the flow of money, but it also naturally sparks conversation, so I feel there are surprisingly many benefits (laughs). To balance security awareness with family cooperation, it might be best to steadily continue such a "system that fits your lifestyle."

Dealing with the Aftermath of Falling Victim

No matter how careful you are, fraud can still happen. If you think, "I might have been hit,", take the following steps quickly and calmly.

1. Suspend the card

First, temporarily suspend or stop the card. Call the lost/stolen card desk on the back of the card, or if possible, immediately suspend it from the card company's app or web service. Recently, many cards allow you to stop usage with a single tap from the app, so it is reassuring to check the procedure in advance.

2. Check usage statements

Review your past usage statements for the last few months to see if there are any other suspicious transactions. Check not just for one transaction, but whether multiple small payments are mixed in, or if there is ongoing damage under the guise of regular billing. Even if time has passed without you noticing, you may be compensated if you report it, but as mentioned above, in many cases, it will not be covered if it exceeds 60 days. It is always better to discover it early.

3. Contact the card company and request an investigation

Call the phone number on the back of the card, explain the situation, and request an investigation. You will be asked for the date, time, amount, and merchant of the fraudulent use, so make a note of them and report them. After investigating, if the card company recognizes it as fraud, they will basically compensate you for the damage. The investigation may take several days to several weeks, so follow their instructions. In some cases, you may be asked to file a damage report with the police and submit the receipt number.

4. Reissue the card

Usually, a card that has been used fraudulently will be reissued with a new number. Reissuance fees are often free, or in cases of fraud, they are refunded later. By getting a new card number, you cut off the risk of the leaked old number being used. There will be a period during reissuance when you do not have the card, so use a spare card if necessary. Card enthusiasts likely have many spare cards, but it is good to be aware of the existence of such backups on a daily basis.

5. Change related passwords

Credit cards themselves do not have passwords, but if there are related online services (the card's member page, accounts for online shopping sites linked to it, etc.), change the passwords just in case. Especially if there is a possibility that login information was leaked due to phishing or similar, promptly change passwords on other sites where you were using the same password.

6. Check credit information

In addition to your credit card, it is also effective to request disclosure of your credit information from credit reporting agencies to check if any new loans or card contracts have been opened without your knowledge. If not only your card information was misused but your entire set of personal information was leaked, crimes such as unauthorized card applications (identity theft) are also possible. In Japan, you can go through the disclosure process with CIC or JICC, so if you are worried, please check them.

Summary: To Obtain Both Points and Security

Credit cards are powerful items for accumulating points and miles, and are an indispensable payment method for modern business people and frequent flyer program enthusiasts. On the other hand, they are also side-by-side with the risk of fraudulent use.

However, by making full use of proper management techniques and the latest security measures, you can significantly reduce that risk. In fact, I have maintained zero fraud damage with my credit cards for 20 years. The key is "not to let your guard down" and "to make technology your ally."

Finally, what I want to convey to all the point-focused card enthusiasts and frequent flyer program members is that you should have a perfect "defensive" system in place while utilizing cards for "offense." Keep track of the number of cards you have and your usage status, and make it a habit to deal with any suspicious signs immediately. Fraud prevention is a low-profile task, but once you become a victim, you will suffer losses and stress that exceed the points you have worked so hard to accumulate. Fortunately, many card companies protect users with advanced detection systems and compensation schemes. As users, we should also take all possible self-defense measures and enjoy our card life and point-earning activities with peace of mind and safety.

Thank you for reading to the end! If you found this article helpful, please let me know by "liking" and "following." It is very encouraging.