Why Does My Credit Card Keep Getting Hacked?

Credit card fraud remains a significant concern for consumers, with millions of cases reported annually. In 2023, Americans reported over 416,000 instances of credit card fraud, a number that has seen a steady increase since 2019. This pervasive issue can lead to financial losses and considerable frustration, particularly when individuals experience repeated compromises of their payment information. This article explores the common ways credit card information is compromised, highlights vulnerable situations, and provides actionable steps for both prevention and response.

Common Hacking Techniques

Cybercriminals employ various methods to unlawfully obtain credit card details. These techniques often exploit both technological vulnerabilities and human behavior to gain unauthorized access to sensitive financial information. Understanding how these attacks unfold can help in recognizing potential threats.

Phishing and Smishing

Phishing and smishing involve attackers impersonating trusted entities like banks or retailers through deceptive emails, text messages, or phone calls. These communications often contain urgent requests or enticing offers designed to trick individuals into revealing their card numbers, login credentials, or other personal data on fake websites. In 2022, over 300,000 phishing victims were reported in the U.S., resulting in millions of dollars in losses.

Malware and Spyware

Malware and spyware are malicious software installed on a device without the user’s knowledge. This software can include keyloggers that record every keystroke, allowing criminals to capture credit card numbers and passwords as they are typed. Malicious code can also redirect users to fraudulent sites or access stored information directly from a compromised device. Such software can be inadvertently downloaded through deceptive links or attachments.

Large-scale Data Breaches

Large-scale data breaches at companies and organizations are a significant source of stolen credit card information. These security incidents can expose vast amounts of customer data, including credit card numbers, names, and addresses. When a company’s systems are compromised, the personal and financial information of millions of individuals can be exposed, leading to widespread fraud. Social engineering, such as phishing texts and emails, contributed to over 50% of data breaches with confirmed data disclosure between November 2022 and October 2023.

Skimming

Skimming involves physical devices attached to legitimate card readers at locations such as ATMs, gas pumps, or point-of-sale (POS) terminals. These devices capture card data from the magnetic stripe or chip during a transaction. Criminals often use hidden cameras or keypad overlays to record the cardholder’s Personal Identification Number (PIN). There is also “e-skimming” or digital skimming, where malicious code is injected into e-commerce websites to steal payment data during online checkout.

Automated Brute Force Attacks and Credential Stuffing

Automated brute force attacks and credential stuffing rely on trying numerous combinations of passwords or using credentials stolen from other breaches to gain access to online accounts. Bots can rapidly attempt to guess credit card details, including the card number, expiration date, and CVV, by testing them across many e-commerce sites. If a user reuses passwords across different online services, a breach on one platform can compromise accounts on others, enabling criminals to access stored credit card information.

Vulnerable Touchpoints

Credit card information becomes susceptible to theft in various common environments and situations. Recognizing these vulnerable touchpoints helps individuals understand where their data might be at increased risk. The methods used by cybercriminals often target specific interaction points where card data is exchanged or stored.

Online Shopping

Online shopping presents a significant vulnerable touchpoint, particularly when consumers use insecure websites. Websites that do not use “HTTPS” (indicated by a padlock icon in the browser) fail to encrypt data transmitted between the user’s device and the website, making it easier for attackers to intercept credit card details. Fraudulent websites, designed to mimic legitimate retailers, also pose a threat by directly collecting card information entered by unsuspecting shoppers.

Public Wi-Fi Networks

Public Wi-Fi networks found in cafes, airports, or libraries are inherently less secure due to their open nature. When connected to an unsecured public network, hackers can easily intercept data transmitted over the network, including credit card numbers and login credentials. Attackers can also set up fake Wi-Fi hotspots that appear legitimate, tricking users into connecting and then monitoring their online activity.

Physical Point-of-Sale (POS) Systems

Physical point-of-sale (POS) systems, such as card readers at retail stores, restaurants, or gas stations, can be compromised through skimming devices. These devices, whether external overlays or internal modifications, capture card information during a transaction without the cardholder’s immediate awareness. Even legitimate POS systems can be vulnerable if their internal networks are breached, allowing criminals to access transaction data.

Mobile Devices and Applications

Mobile devices and applications also present potential vulnerabilities if not properly secured. Outdated operating systems or unverified apps can have security flaws that cybercriminals exploit to install malware or gain access to stored information. Insecure mobile payment methods or apps that store credit card details without strong encryption can also expose financial data if the device is compromised.

Email and Messaging Applications

Email and messaging applications serve as primary vectors for the delivery of phishing attempts and malware. While the applications themselves may be secure, the content transmitted through them can be deceptive. Clicking on malicious links or opening infected attachments received via email or messaging apps can lead to the installation of spyware or redirection to fraudulent sites designed to steal credit card information.

Protecting Your Credit Card Information

Taking proactive measures is essential for safeguarding credit card information and reducing the likelihood of future compromises. Implementing robust security practices across online and physical interactions can significantly enhance financial safety. These preventative steps focus on user behavior and technological safeguards.

Online Security Best Practices

Online security best practices form a strong defense. Creating unique passwords for all online accounts, especially those linked to financial services, is fundamental. Passwords should incorporate a mix of letters, numbers, and symbols and should not be reused across different platforms. Enabling two-factor authentication (2FA) wherever available adds an extra layer of security. Always ensure that websites used for transactions begin with “https://” and display a padlock icon, indicating a secure, encrypted connection.

Physical Card Security

Physical card security requires vigilance during in-person transactions. Always inspect card readers at ATMs, gas pumps, or retail checkout counters for any signs of tampering or unusual attachments before inserting your card. Using contactless payment methods or inserting cards with EMV chips can offer better protection against traditional skimming devices compared to swiping the magnetic stripe. When entering your PIN, always cover the keypad with your hand to prevent “shoulder surfing” or capture by hidden cameras.

Regularly Monitoring Account Activity

Regularly monitoring account activity is an effective way to detect unauthorized use quickly. Individuals should review their bank and credit card statements frequently for any unfamiliar or suspicious transactions. Many financial institutions offer transaction alerts via email or text message. Prompt detection allows for immediate reporting and mitigation of potential fraud.

Maintaining Software and Device Security

Maintaining software and device security is important. Regularly updating operating systems, web browsers, and antivirus software ensures that devices have the latest security patches to protect against known vulnerabilities. Installing and maintaining reputable antivirus or internet security software can help detect and remove malicious programs. Using a firewall can add another layer of protection by controlling network traffic to and from a device, blocking unauthorized access attempts.

Practicing Good Data Privacy Habits

Practicing good data privacy habits involves being selective about the personal information shared online. Avoid providing unnecessary personal details on websites or social media platforms that could be used to facilitate identity theft or targeted scams. Understanding and adjusting privacy settings on social media and other online accounts can limit the visibility of personal data to a wider audience.

Responding to a Compromise

If credit card information is compromised, taking immediate and decisive action is crucial to limit financial damage and protect personal credit. Swift response can mitigate unauthorized charges and prevent further misuse of your identity. Each step plays a role in the recovery process.

Contact Your Bank or Credit Card Issuer

Contact your bank or credit card issuer immediately upon discovering suspicious activity. Many card issuers offer 24/7 fraud hotlines. Prompt reporting is essential, as federal law, the Fair Credit Billing Act, limits your liability for unauthorized credit card charges, often to $50, but zero liability policies are common if reported quickly.

Cancel the Compromised Card

After reporting the fraud, request that the compromised card be canceled and a new one issued with a different account number. This prevents any further unauthorized transactions using the old card details.

Change Passwords

Change passwords for any online accounts where the compromised card information might have been stored, or for accounts that share the same login credentials. This includes online shopping sites, banking portals, and email accounts.

Monitor Credit Reports

Monitor your credit reports for any signs of identity theft or new fraudulent accounts. The Fair Credit Reporting Act allows consumers to obtain a free copy of their credit report from each of the three major credit bureaus (Equifax, Experian, and TransUnion) annually. Consider placing a fraud alert on your credit report, which requires businesses to verify your identity before extending new credit. For more severe cases, a credit freeze can be placed with each of the three credit bureaus, which restricts access to your credit report and prevents new credit accounts from being opened in your name.

File Reports

For significant fraud or identity theft, filing a police report may be advised. Additionally, report the incident to the Federal Trade Commission (FTC) at IdentityTheft.gov, which can provide a personalized recovery plan and assist in further actions. These formal reports can provide important documentation for disputing fraudulent charges and resolving identity theft issues.