The Federal Trade Commission estimated that more than 5 million transactions were reported due to fraud in 2022 alone. These numbers are a consequence of the expansion of online shops. Credit Card hacks and Credit Card data leaks are an issue connected with this phenomenon.
Learning how these incidents occur and learning how to prevent them, are going to be the key subjects of this article.
How do Credit Card Scams Happen
Credit Card companies have made lots of efforts over the years to keep online payment a secure transaction system. However, databases on the dark web containing credit card data are becoming a reality more and more renowned, but how do Credit Card hacks actually occur?
There are several methods that attackers use depending on the attack vector that they choose.
- Phishing and Social engineering: Cybercriminals have been using phishing attacks or other strategies to steal credit card information from victims.Malware is malicious software that can be installed on a victim’s computer or mobile device without their knowledge, allowing hackers to steal data such as credit card numbers.Phishing attacks involve tricking victims into revealing their credit card information by posing as a legitimate company or financial institution.
- Skimming devices: These devices are physical devices that can be placed on ATM machines or payment terminals to copy credit card information. When a victim swipes or inserts their credit card in the rogue terminal, the device gets the information through the magnetic stripe. As most card issuers have these magnetic stripes on their credit cards, it’s a very common and effective scheme, though it requires the person holding the terminal to be either an accomplice or completely unaware.
- Keylogger: Keylogger device or software, spyware and other malicious software that cybercriminals spread through the web and that is made to record keystroke activity or targeted website activity such as e-commerce. This type of software, despite having to confront various preventive measures developed through the years, such as antiviruses, are still a part of the internet and still continues to expose personal information such as payment history and payment data.
Credit Card hacks can also occur through the same channel but in corporate environments. When companies or organizations store sensitive information on their servers, they are vulnerable to cyber attacks that can result in credit card data theft.
How to avoid Credit Card Hacks
In order to protect your payment information, you must ensure not only that you have taken all the necessary steps on your side but also that the payment processor of the online transaction does not leak any information.
On your side, always be sure to have the following in check:
- Implement two-factor authentication on your payments: You can make sure no one is able to conclude any transaction without you knowing it by enabling multi-factor verifications on all your online payments. This means that whenever you make a purchase online you must have the secondary verification method, which might add complexity when you need to make emergency purchases, however, this also ensures that, even in the event of a credit card hack, you still are not impacted as no one would be able to use your credit card data to perform any purchases.
- Activate Impossible Travel Restrictions: Impossible Travel Restrictions are restrictions applied to your account or payment method based on the location of your payments. For example, if one transaction occurs in a continent and the next one in a different one in less than an hour, the impossibility of covering such a long distance in a short time will trigger the blocking rule. You can also block any foreign transaction by default.
- Use Disposable Virtual Cards: Disposable Card issuers are quite popular these days. All smart banks provide this service, which, in essence, allows you to create a one-time usable credit card with data. Once the transaction is performed, the credit card company processes the payment and the credit card ceases to be valid right after. This method also makes it so that, even in the event of credit card hacks, your information are still unusable to anyone.
Keeping an eye on your online payment history and decrease credit limit for single transactions from your bank or payment processor profile dashboard is also a good habit, as it could be a way of containing data breach when all other preventions have failed.
Just because you are being responsible, however, that doesn’t mean the transactions you perform are completely secure. The Payment Processor also must implement security measures such as:
- Ensure the payment page issues an SSL certificate: Checking the lock on the top left corner of any website page will help you know whether the website uses Secure Socket Layer (SSL) connection. SSL encryption secures the information you send over the internet, including the payment data. A website that does not implement SSL encryption leaves you open to man-in-the-middle attacks and other eavesdropping techniques.
- Ensure Payment Gateway is secure: The payment gateway is the payment processing service provider (usually a third-party) that takes care of processing the online transaction. Make sure the payment gateway is compliant with Payment Card Industry Data Security Standard (PCI DSS). To know more, you can check the organizations advertised on the official page.
- Implement Tokenization: Some Payment Processors implement Tokenization, a process that transforms sensitive data, such as your credit card numbers, with a token. The token is data meaningless to anyone else outside the Payment Processor and the Token Issuer and cannot be used to conduct any transaction. Even if the Token is hacked or the information related to the payment are leaked, your payment information are still secure.
All these preventive methods mixed together will grant you a secure payment and a good protection level against information theft and exploitation even in the event of a data breach.
Online Payments are an habit that has become more necessary than favorable, as most businesses today are switching partially or fully to onlie shops due to lower percentage of fees and reduced complexity in handling virtual only payments.
Being able to perform these transactions safely is an essential skill that doesn’t require too much to master. Be sure to follow the suggestions in this article in order to avoid suffering from a credit card hack.