A credit card shaving scam consists of a scammer trying different 16 character numbers until finding one which is a valid number of an active credit card account.
Once the thief finds such a number, he shaves the account numbers from a pre-paid credit card and then replaces them with the guessed credit card number. The thief also scratches the magnetic strip on the credit card to destroy it, so store clerks must manually key in the credit card number the thief placed on the card. Now, the thief has a working copy of someone's credit card account, although he never actually stole the credit card from his victim.
How To Avoid Being A Credit Card Shaving Victim: Since the theft involves guessing a credit card number, there's not much you can do to keep your credit card number safe. So the best defense is early detection of fraud by checking your statement.
Check your credit card billing statements closely. Checking your account more frequently than once a month will aid in early detection. You can do this by checking your account online or by phone at least once a week. Also order your annual free credit report copies. At annualcreditreport.com you can get a free credit report with no credit card required. Report Credit Card Shaving Fraud: Notify your credit card company as quickly as possible after you discover fraudulent transactions.
How to Dispute Credit Card Shaving Scams and Billing Errors: File a police report and then call your credit card company. Many credit card companies require a police report before they will remove fraudulent charges from your account. Check your credit report to make sure the account is correctly reported and that no other accounts have been compromised. As a victim of identity theft, you're entitled to an additional, really free credit report (in addition to the one provided under the Fair and Accurate Credit Transactions Act).
