Credit Card Fraud

Credit Card Fraud

Introduction to credit card fraud:

On estimate, 0.1% of all credit card transactions are fraudulent, and this percentage may seem insignificant. However, it accounts for massive financial losses at the hands of scammers. Let’s talk about credit card fraud, what it is, and how it can be prevented.

A credit card fraud is commonly defined as fraud or theft committed using a credit or debit card. By committing credit card fraud, the scammer aims to purchase goods without paying for them, steal money from other people’s accounts, or it could be just a small part of a larger identity theft scheme.

Typical credit card scams and schemes

  • Application Fraud

Application Fraud generally occurs as part of a greater identity theft scheme. In this method, the scammer applies for credit or a new credit card while using your name and stolen personal data.

  • Credit Card Imprints

This is when a criminal skims information contained on the magnetic strip of your credit or debit card. The data can then be used to encode a fake card or complete fraudulent transactions.

  • Counterfeit Card Fraud

This is a type of fraud that is typically committed using skimming. This holds your account information on a false magnetic strip. This can also be achieved by knowing your card details to create a fake card because the magnetic stripe or chip on the card can’t be used. The fraudster may sweet-talk the merchant into believing that there is just something wrong with their card to get away with this crime.

  • Doctored Cards

A scam artist uses a strong magnet to erase the card’s metallic strip to create a doctored card. They do this so the card details can be changed to match those of valid cards allowing them to make purchases using someone else’s account.

  • Mail non-receipt card fraud

This crime takes place when you are expecting a new card to arrive via mail. The criminal intercepts the card’s delivery and will then register the card to use to make purchases.

  • Card not present fraud

This fraud occurs when a scammer learns the expiry date and account number of your card. They use this information to make transactions without having a physical card. They might not know your CVN, though, so look out for small charges on your account, which may indicate that a scammer is trying to guess the code.

  • Stolen Card ID

A credit card fraud in which a criminal compromises your credit card details. Your details can then be used to take over a card account or open a new one. Here come the most challenging types of fraud to identify and recover from since it is difficult to detect.

  • Account Takeover

Such a situation occurs when a criminal gets ahold of relevant documents and personal information; this is usually done online. The scammer then contacts the credit card company and impersonates you so that they can change the address. The replacement card is then sent to the fake address, and the criminal will make changes.

  • Fraud via Data Breaches

This occurs when a customer’s information is stolen from the merchant’s database. When a data breach compromises your account details, you will receive a letter or email from the merchant to inform you that your financial data has been compromised in a data breach. However, this is only when the merchant can detect the violation.

  • Phishing

Phishing is a cybercrime where scammers send out fraudulent emails, calls, and sales pitches to bait a cardholder into giving away personal data. These criminals often impersonate a company, a bank, a credit card company, the police, or other government authority to bait you into giving away your details.


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Credit Card Fraud Detection:

Let’s move on to discussing how to detect credit card fraud. Read the bullet points below to learn how to see fraudulent transactions on your credit report or bank statement, along with other hints for detecting scammers.

  • Regularly check your bank statements. This is so you can quickly detect mysterious transactions so you can immediately contact your card provider to resolve the issue before any substantial damage is caused.
  • Check your credit reports regularly. This can show you when and if someone has applied for credit cards using a fraudulent application.
  • If your credit card is suddenly declined or the provider tells you that you have reached your credit card limit, check your transaction history to check if a scammer has held the details of your card.
  • Check for an unauthorized large number of payments, but you don’t recognize it, along with small, repeated transactions that could indicate the criminal is trying to guess your CVN.

If you spot any suspicious activity, then report it immediately; banks may hold you negligent if you don’t inform them of the fraudulent transaction within a specified timeframe.

Credit Card Fraud Prevention Methods:

The software which can spot fraudulent transactions and estimate the probability of a fraudulent purchase is already in usage by card issuers and banks to help keep your account safe. Still, sometimes a scammer can slip through the cracks. This is how you can take responsibility for your finances and avoid credit card fraud.

A cardholder’s responsibility in preventing credit card fraud is to secure your sensitive personal data. To ensure the safety of your financial status, you should always keep documents in a safe place and out of site, shred letters before they are thrown away, still log out of online accounts, especially if you were using a public computer and ensure that your passwords and PINs are secure and safe.

We also advise that you be cautious of suspicious letters, emails, house-callers and prevent falling for a phishing scam. If you suddenly receive an email or phone call and don’t know who it is from, always be on your guard for questions that could compromise your personal information.

You should also ensure general computer hygiene by making sure that your system software and applications are up to date, not using public wi-fi for making purchases, and generally avoiding suspicious wi-fi sources, and making sure that the websites you purchase from our secure (for example, SSL protected).

Reporting Credit Card Fraud:

Suppose you suspect that you are a victim of credit card fraud, contact your credit card company immediately. Then, change your passwords and PINs. Scammers may have received access to just one account or many accounts and services, so be sure to be thorough.

You will also need to comb through your past bank and credit card statements a few months prior. We also advise that you get a copy of your credit file to ensure that no one has impersonated you to apply for credit cards or loans.

How can I get help?

For high-quality advice, you can always rely on a Trader defender. We can also help in the reporting of a scam. Visit us online for a consultation, and we can get the all round support you need.