Why you need to sign your credit card
Does signing the back of your credit card still actually help prevent fraud?
This post comes from Matt Brownell at partner site Credit.com.
On the back of every credit card are two security measures. One is the CVV code, a three-digit code used for "card not present" transactions like making an online purchase. Any reputable online retailer will ask for that code upon checkout to make sure that you actually have the card in your possession (and aren't a thief who's simply stolen the data from the front of the card).
The other security measure sits right next to the CVV code, and it's comparatively low-tech: a signature field, with a warning that your card is "not valid unless signed." Much as online retailers are supposed to ask for the CVV code, so too are merchants supposed to check for your signature on the back of the card and compare it with your signed receipt to make sure they match.
But if you're hard-pressed to remember the last time a cashier examined your signature, you're not alone.
Signing your card "could possibly deter someone from using a card that's been lost," says Raul Vargas, the manager of fraud operations at Identity Theft 911. "But I'd say that's outdated --merchants no longer check it." While checking every card's signature might catch the occasional fraudulent transaction and thus protect the merchant from chargebacks by the bank, Vargas says it's still not worth the merchant's time.
That's especially true considering that a thief could easily forge your signature on the receipt. After all, it's not as if the average cashier has training in handwriting analysis. (Post continues below video.)
"I think you'd be hard-pressed to find anyone in the security industry who sees it as a substantive and significant security measure in isolation," says Alistair Newton, an analyst at research firm Gartner specializing in the banking industry. "It's pretty unsophisticated."
That's not to say it's entirely useless, though. Newton points out that if the person who stole your card spends five minutes practicing your signature before using your card, that gives you another five minutes to discover the theft and call to cancel your card.
And it's not entirely out of the question that a merchant will ask to see the back of the card.
Vargas says he was recently asked for his signature when making an expensive purchase at a jewelry store, as such high-value merchants are frequently targeted by credit card thieves who want to quickly purchase an expensive item, then pawn it for cash before the theft is discovered. So it's worth taking 10 seconds to sign the back of the card for those rare occasions when a fraud-wary merchant asks to see it.
Of course, most credit cards offer zero liability on fraudulent purchases, so you might not be too worried about credit card fraud. But if you haven't signed the card, those protections might not come into play. Your signature, says Vargas, serves to ratify the cardholder agreement between you and the issuing bank. (Indeed, he says the signature field was implemented in part to make sure cardholders couldn't try to escape charges by claiming that they never agreed to the terms of the contract.) As such, the bank could say that an unsigned card isn't covered by the fraud protections in the contract.
"If it's not signed, then technically the contract between the bank and consumer has not been ratified," he says. "If (a thief) makes tons of charges and the merchant tells the bank that it wasn't signed, they can refuse fraud protection."
So while signing the back of your card isn't an ironclad protection against fraud, there are definitely scenarios in which doing so can save you a lot of trouble. If you haven't signed your cards yet, find a pen now.
More from Credit.com and MSN Money:
VIDEO ON MSN MONEY
area marked signature. You will never have to worry about it again.
(The post office is the only one that will not accept your card without
a valid signature.)
Some of you need to get your facts straight before you post wrong information. If a card is signed you do NOT need to show ID. The merchant can ask for it all day long if they want to, but you don't have to show it and they still have to accept the card, that is part of the merchant agreement. This is taken straight from the Visa website.
When should you ask a cardholder for an official government ID? Although Visa
rules do not preclude merchants from asking for cardholder ID except in the
specific circumstances discussed in this guide, merchants cannot make an ID
a condition of acceptance. Therefore, merchants cannot as part of their regular
card acceptance procedures refuse to complete a purchase transaction because
a cardholder refuses to provide ID. It is important that merchants understand
that the requesting of a cardholder ID does not change the merchant’s liability
for chargebacks. However, it can slow down a sale and annoy the customer. In
some cases, it may even deter the use of the Visa card and result in the loss of
a potential sale. Visa believes merchants should not ask for ID as part of their
regular card acceptance procedures. Laws in several countries also make it
illegal for merchants to write a cardholder’s personal information, such as an
address or phone number, on a sales receipt.
Signing your card or not? Well I know the card is valid when I call and activate the dam piece of plastic from my residence. They have no Idea if I have signed it or not so take your chance and write check ID
and if they don't accept the card then that might be a good deterrent thing for the criminal because it is invalid to them for sure.
Total B.S. I put "see I.D" on the back of my cards. I welcome a server at a restaurant or merchant to ask me to see my I.D. when I make a purchase. That way I know that they are paying attention and the scumbag that steals your card would have to completely assume your identity by forging an I.D. to match the card. I'm pretty sure that takes longer than 5 minutes to do.
Security expert? Yeah....
I never sign the back of my cards. I prefer the salesperson to ask for photo ID.
That is how I have it listed on the back "Ask for photo ID".
Too bad many places allow you to swipe a card and never show ID
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
RECENT ARTICLES ON CREDIT CARDS
A Fidelity study found that adult kids and their folks aren't on the same page when it comes to discussing finances.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'