There are many urban legends circulating about 'a friend who' ..... and I've just received yet another one about 'A friend who went to the local gym and placed his belongings in the locker ..... he still had his credit card in his possession ..... a few weeks later his credit card bill came - a bill of £14,000 of which he had no prior knowledge!'

Most of these stories are based on facts, and probably happened to someone, so it might be useful to consider a few of the ways that we are at risk, and how to protect ourselves.

First of all, using your credit card online through a reputable site places you at less risk than using it in a shop or restaurant, thanks to encryption of your data which prevents it from being intercepted or used by a third party, and the agreement between the merchant and the credit card companies.

I recently came across a 'scam' perpetrated against a customer of a cross channel ferry operator, although it turned out not to be a scam at all in the real sense of the word.  The ferry operator in question offered a restricted return fare for less than the cost of a one-way trip.  The customer decided to book the cheap return and not come back. Having ticked the boxes and tacitly agreed thereby to the 'terms and conditions' he paid for his ticket.  Some weeks later the ferry company invoked one of its conditions, which was that should the return not be used, it would debit the passenger with the difference between the cheap return and the full one way.  So 'caveat emptor'  in cases like this.  The rule may seem illogical and unfair but that's how it is.

Here are a few ways that scams take place, particularly where your credit card is taken away from you. This is less common with handheld readers,  although these present their own dangers which I will mention later.

Credit card switching :

You hand your credit card over in a shop or restaurant and they return a different but similar looking one to yours,  or your  card is surreptitiously removed from your wallet and replaced with a similar looking, but expired or fake one.  If you don't use it often, it may be a while before you notice.  Most of the information that is required to make internet purchases is on the credit card (number, card holder name, commencement/expiry dates, and CVV number (what's this? http://www.torrid-tech.com/pcCardCode.html ).  Some online purchases require billing address verification which is usually easy enough to find.

If you think your wallet or bag may have been in someone else's hands, check that all your cards are there, and that they really are yours, and in the same way when a cashier or waiter returns your card, make sure it really is yours.  Some of these people have incredible sleight of hand.

Copying of data.

It is quite possible during the time it takes a waiter to take your card to a reader, for the data on your card to be copied, either photographically or electronically on a 'skimmer', or simply written down.  Again, for many purchases, this provides them with everything they need to go on a spending spree with your card.

Ideally, don't let your credit card out of your sight.

I'm tempted to scratch the CVV number off my cards in order to make it more difficult for someone who stole them to make use of them.  The only problem is I'd probably forget them, it's hard enough to remember all the pin numbers!

More on scams? Watch this space.