13 Common Types Of Credit Card Fraud

13 Common Types of Credit Card Fraud

Anything is possible for fraudsters. Though there are numerous ways for safeguarding your credit cards, the criminals develop new ways of scamming credit card users or just put a new spin on an old trick. The idea is to be on the lookout for scams for protecting your credit card information which will help you to prevent unauthorized charges and fraud on your account. Credit Bazaar gives you a list of the most common types of Credit Card Frauds to look out for, given below in detail:

13 Common Types of Credit Card Fraud
  1. Card Not Present (CNP) Fraud: If someone knows the account number and the expiry date of your card, they can easily commit CNP fraud against you. This is possible through the internet, mail or phone. Primarily, it means that someone makes use of your card without being in physical possession of it in reality. Often the online merchants will require your CVV (Card Verification Value) number too, but if a fraudster can get your account number, it will not be difficult to get that number too. Moreover, there just 999 probable combinations for the verification code. So, many scammers try to order items of very small amounts until they figure out the correct number. Hence, you should look out for small payments on your statements too.
  2. Application Fraud: As the name goes, this type of fraud takes place during the time of processing applications. Stolen and fake data will be utilized for opening an account in another person’s name. Fraudsters use bank statements and utility bills to open fake accounts. This type of fraud takes place in conjunction with identity theft. It occurs when other people apply for a new credit card or credit, in general, in your name. They will generally first steal supporting documents required during the application process. These papers help them to substantiate their fake application. Banks possess various protection standards established for stopping such a kind of fraud from occurring. The most significant criteria are to submit original documents only. Furthermore, they will normally phone call employers for confirming identity. Generally, the fraudsters usually provide false telephone numbers for places of employment and resort in forging documents. However, there are always ways around some of the protection measures.
  3. Counterfeit Card Fraud: This type of fraud is usually done through skimming. This signifies that a fake magnetic swipe card carries all your card details. Then, the fake strip is utilized for creating a fully functional fraudulent card. Fundamentally, it is similar to your original card, which means that the scammers can simply pay for certain goods by simply swiping it in a machine. Such a kind of fraud can also be performed by somebody who knows the details of your card. They can utilize this information for creating a so-called ‘fake plastic’ card. At this point, the chip or the magnetic stripe on the card does not work. But it is usually easy to convince a merchant that there might be something wrong with the card, on which they will enter the transaction details by hand. This type of fraud is also called skimming. Basically, ‘skimming’ means when a device steals all your credit card details from its magnetic stripe and generally occurs when a device, called as credit card skimmer, is attached to a merchant’s terminal or an ATM. Skimming is also possible when someone with a credit card skimmer, brushes past you. The card details obtained through skimming can then be utilized for creating a counterfeit card or for taking part in some good old fraud such as a CNP scam. To be safe, you must always keep your card within the confines of your purse or wallet, and if an ATM seems tampered with, you must report it and move on.
  4. Stolen and Lost Card Fraud: This type of fraud means you losing your credit card or somebody stealing it. Either way, its possession is shifted from your hands to somebody else’s or just left lying somewhere. If fraudsters or criminals get their hands on your card, they will use it for making payments. It is difficult to use this through machines, as the PIN will be required. Although, a stolen or found card can be easily used to make online payments. This is the prime reason that you should cancel or freeze your cards as soon as you comprehend they have gone missing. This can be done by calling the bank or in some cases, just by clicking a button on the mobile banking apps. Moreover, in cases where you just decide not to use your credit card anymore, don’t just fling it into the trash because then the thieves can take it from there. They can use this card easily as it will still be active. Just when you feel you don’t want the credit card, cancel it immediately and also cut it up to avoid having your card stolen from the bin.
  5. Main Intercept Fraud: Ok! So you know your credit card expiration date is coming up? And, this means that by any day now you should be getting your card in the mail. However, the renewed card never makes it to you. What might be the reason? Wake up as this is probably a Mail Intercept Fraud. This fraud is so prevalent that it carries two other names – Mail Non-Receipt Fraud or Never Received Issue. In such a situation, the thief obtains card numbers by collecting them out of the mail before the cardholder receives it –  usually by grabbing it right out of the mailbox while the customer is away at work. Normally, cardholders will realize their card is expired, call the issuer company’s customer care, and learn that charges are piling up! Be aware and vigilant around the time when you are awaiting a renewed card to be mailed out to you. If you do not see them for a while before the expiry date, call your issuing bank for finding out when they were mailed. 
  6. Free Wi-Fi: Well, free Wi-Fi usually does bring a smile to the faces of most people. You might think it is pretty generous of people to provide free Wi-Fi. But remember, there is no such thing as free lunch, and here too, there may be a certain scam involved. You might immediately connect with the first free Wi-Fi hotspot you find, but this might not be a safe choice. Criminals adapt to this method so that they can virtually access any information sent by you over the network. If you check your credit card balance or log into your bank account, the criminals get hold of your username and password. Moreover, if you place an online mobile order, the criminals can get all your personal information and credit card details. They may also decrypt information or access information in your browser history sent over through secure websites too. Therefore, it is an intelligent idea to be wary of free Wi-Fi connections and being vigilant about the information you send through this network, as it can be intercepted by hackers.
  7. Assumed Identity: Assumed identity fraud refers to a criminal using a false name and a temporary address for obtaining a credit card. There are various structures in place with banks for safeguarding against this kind of fraud. For instance, they will ask new customers to give account references and these will be rechecked to determine that they are original and genuine. The banks follow a strict protocol and might ask you for any personal document, right from birth certificates to passports to original copy of driver’s license. They usually ask for such documentation before they send out a card, and therefore, this type of fraud is not that easy to do.
  8. Going Phishing: When you hand your credit card details to somebody under the guise of something or someone else, it is known as phishing. For instance, a general phishing scam takes place when a fake company that seems to be very similar to the real one (let’s say Denna Bank instead of Dena Bank) sends you an authentic-looking email asking for your card details. These phishers often have very similar or even the same logos as the original existing company with similar URLs for booting, so people can easily fall victim to them. This is a very common type of fraud in most countries. 
  9. Doctored Cards: Well, as the name goes, a doctored card is the one on which surgery has been performed. Its metallic stripe is erased using a strong magnet. Criminals do this and then administer to alter the details on the credit card itself so that they can match those of valid credit cards. This card will not work when a criminal tries to purchase something. Although, these fraudsters are very cunning and will then use their charm for convincing the merchant to enter the card details manually.
  10. Mail Non-Receipt Card Fraud: So you are waiting for your replaced or new card and haven’t received it as of now? Chances are a criminal might have intercepted your card. Such a kind of fraud is also called as intercept or never received issue fraud. The fraudster can then register your card and make use of it for making purchases and much more. Look, when you make a credit card application, 99% of the time that credit card will be sent by mail to you. In such situations, the interception could take place before the card arrives, or in most cases, the card thief might have just drawn it from your letterbox. For protection against such a kind of fraud, it is recommended to install a lockable mailbox, or at least to regularly check your mailbox.
  11. Account Takeover: Account Takeover is the credit card fraud that’s on a rise these days! Since the traditional card fraud methods are more challenging since embedded chips and holograms are difficult to make, this scam is rising according to recent findings. Most of the time, this crime begins with lax online card security. Here, the cardholder’s data is obtained by the hacker. Then, they act as if they are the authentic account holder and reach out to the particular card company. By reporting that they have lost their card, they try to gain sympathy and request a new one home. Then, they lure the agent to update their address info too. Therefore, that replacement card is not mailed to the real account holder, but the scammer. All that is left for the fraudster to do is just activating the card and begin online shopping. The real cardholder will not even be aware of this ordeal until they try to use their legitimate credit card, which the fraudster reported as lost or stolen. Remember, if this ever happens to you, place an immediate card to your card company for repairing the situation.
  12. Fake Cards: Creating fake credit cards is not a cakewalk! It requires a lot of skill, effort and time, however, that doesn’t stop a determined fraudster. A particular card needs to meet specific complex security aspects. Also, with cards becoming more and more advanced nowadays, it means this task has become much harder to do.
  13. Altered Cards: One of the significant ways in which scammers can deceive consumers and merchants is by using altered credit cards. Firstly, the fraudsters obtain a legitimate cardholder’s data. Then, they make alterations to the numbers on a bad card to match the same on a real account. Lastly, they run a neodymium magnet on the magnetic strip and chip to erase or scramble the original data of the card. They make purchases with the credit card. Of course, the information is not deciphered by the chip reader and the transaction gets failed.

Conclusion: Overall, the 13 most common types of credit card frauds are explained above and you need to be well-aware of them. You must be aware of such scams so that you do not fall prey to them. Credit Bazaar provides complete assistance for the protection of your credit cards so that you never have to be a victim of such credit thefts ever!

For any queries regarding Credit Score improvement or Loan contact Credit Bazaar CR Arcade 2nd Floor, Opposite Delta Garden, Next to Shree Mahalaxmi Restaurant, Mira Road East, Thane: 401107

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