Federal laws protect credit card users from the responsibility of fraudulent transactions. Depending on the circumstances of the situation, the responsibility will fall back on the merchant, the bank, or the credit card company, but that does not mean a consumer won’t be harmed or at least inconvenienced by credit card fraud. One of the simplest ways credit cardholders can protect themselves against fraud is with their signature.
A credit card signature serves two important functions. First, it verifies identity. Credit card companies require a signature on the back of a credit card. The expectation is that the signature on the card will match identification and/or the signature on a receipt created at a point-of-sale terminal. Store clerks tend to skip this verification process, which makes it easier for a credit card thief to sneak by, but in theory, a merchant could catch a thief if they adhere to this verification.
Secondly, a signature can protect all parties involved in a purchase, including the merchant, the credit card company, and the customer. In the event of a purchase dispute, verifying the signature on a receipt can help prove whether or not it was the credit cardholder or a thief who made the purchase.
When a Signature Isn’t Required
Some credit cards have a lower purchase limit that does not require a signature. This is a convenience for quick, small purchases at a grocery store or gas station, but just because a signature isn’t required for small purchases, doesn’t mean that a merchant will sacrifice this security measure in order to protect themselves from fraud. Maintaining the practice of signing for credit card purchases, no matter how small, can help protect the consumer as well.
Keep in mind that some credit card companies require a signature in certain merchant categories, no matter how small the transaction. This includes gambling purchases, direct marketing, money transfer, automated fuel dispensers, and financial institutions.
Electronic Signatures Add Extra Security
Some merchants have moved to the more technologically advanced authentication process of employing digital signatures at the point-of-sale. Various trusted methods of e-signature transactions identify the user participating in the transaction and make the process more secure for all parties involved.
Writing “See ID” Is Not Secure
The back of a credit card has a spot for a signature along with the words “Not valid unless signed” or something similar. Merchants are expected to check a cardholder’s signature against identification. Some consumers write “See ID” in the signature line with the hope that cashiers will ask to see their ID rather than their signature (which is more secure). If a thief were to steal the card, the cashier would ask for his or her ID and the thief would be caught.
However, this doesn’t work because most cashiers don’t bother to look at the signature on the card. Not only that but some stores have point-of-service terminals that allow the customer to process the credit card themselves, which means the store clerk doesn’t see the credit card at all.
Credit card companies such as MasterCard have specific rules and guidelines about the process of signing the back of a credit card. When it comes to a lost or stolen card that isn’t signed, credit cardholders would be wise to follow this simple protocol.
Initiating a Chargeback on a Purchase
When cardholders find what appears to be a fraudulent or accidental charge on their credit card statement, the first step is contacting the credit card company to open an investigation into the particular charge. The onus is then on the merchant to prove that the cardholder was indeed the one who made the particular purchase. This can often be done with a signature. If the customer’s signature is not on any documentation related to the purchase or the signature doesn’t match other purchases, then it is most likely that the merchant will have to issue the chargeback.
In terms of secure transactions, there are many ways that credit card companies work to protect themselves – as well as retailers, financial institutions, and consumers – from the hassle and expense of fraudulent activity. Cardholders can do their part with just a few strokes of the pen. Signing the back of a credit card and receipts is a small price to pay for protection against credit card fraud.