Verifying your identity used to come with your handwritten signature. You used to make sure you are who you say you are simply by signing your name. Whether it was writing in a contract or a birthday card, people knew something was from you by how you signed your name.
Credit card purchases got the same treatment. Once a transaction was complete, you’d get a receipt to sign, verifying that the person who used that card and is signing that piece of paper is the same. But do you need to prove who you are with your signature, especially if the person collecting your signed receipt is none the wiser?
Credit card signatures used to matter
Legally binding contracts usually need your signature as an indication you understand and agree to the contents within. Credit card signatures once acted in a similar way — accepting and approving something you purchased.
It’s sort of like an early version two-factor verification: you would swipe your card and then sign your name. If the card swipe wasn’t confirmation enough, the signature was.
But the rise in identity theft has made credit card signatures useless. Many merchants don’t have any tools to prove that the person signing the receipt is also the person that the credit card belongs to. As long as there was a signature, though, merchants could carry on with the next customer, letting potential fraud run rampant.
Why credit card signatures aren’t a requirement anymore
Credit card signatures are no longer a stamp of approval but rather, a temporary hold-up from you leaving the coffee shop, restaurant or grocery store you happen to be buying something from.
As identity theft has risen, credit card signatures have been slow to respond. In 2018, four major credit card issuers ended signature requirements when making purchases. If you have a Visa, Mastercard, Discover or American Express card, you don’t have to sign receipts to verify you made purchases.
At one point, signatures proved that you were who the card says you were. But the rise in identity theft has caused credit card companies to increase consumer protections. Chip cards, with smart chip technology (where credit and debit cards have a microchip built-in,) allow for a more secure transaction. It’s harder for scammers to steal your information from a chip, which is why microchip technology is becoming more commonly used as credit card issuers shift to emv technology.
You may still be required to sign your name no matter how much your purchase amount because signature language is still ambiguous. There’s no hard-and-fast rule about requiring a signature. Some companies and smaller merchants may take longer to catch up to bigger stores that have no signature requirement.
How to handle credit card fraud if it happens to you
Now that major credit card issuers are no longer requiring signatures, you may feel a little uneasy about shopping. Remember that you don’t have to sign for your purchases when you buy something online. So the lack of a signature already applies in some of your shopping.
However, fraudsters are becoming increasingly efficient at stealing credit card information, whether it’s from your physical card or your credit card number. Here are a few ways to handle credit card fraud if it happens to you.
1. Stay on top of your transactions
Some credit card issuers can set up text alerts or notifications for unauthorized transactions occurring on your account. If you aren’t checking your account every few days or once a week, opt into getting notifications.
2. Report fraud immediately
The minute you discover a problem, contact your bank or credit card issuer. Many of them may already have a record of the fraud taking place, but need to verify other details, like the last transaction you made. This may be a pain because fraud can pop up at all the wrong times, but you should report it right away.
3. Keep track of your record
After you report your fraud, you may get some sort of confirmation code. If you ever need to contact your lender again about the fraud, it’s important to have this handy. Hold onto it until you’ve gotten an official word from your issuer that the matter has been resolved. Then file it in case you need to reference it in the future.
4. Update your accounts
This might be difficult if the fraud happened through a merchant you regularly buy things from (think: Target, who had a breach in 2013). But recurring payments could stop if your new card information isn’t added.
Take the time to update accounts that have your banking information for places you shop often or bills you pay for with your credit card. Being late on bill payments can cause your credit score to drop, making it hard to qualify for low-interest credit cards or loans in the future. It’ll save you a headache and your credit score if you take the time now.