Types of Credit Card Fraud

Tracey_JohnstonCredit cards have made life easy. All you require now is one swipe, and all your money-related worries are solved, at least for the time being. What’s more is that they are easy to carry around, which makes them a better option than cash. The latter is more visible as well whether in a purse or wallet which, in turn, leaves you open to dangerous situations such as theft. Moreover, these plastic swipe cards have made shopping a breeze! Some even offer discounts on particular items, which further facilitates your purchases. Among numerous such benefits, there is one so-called advantage which credit card companies use heavily to promote the sale of these cards – safety. Since the cards are linked to your bank account and less visible than cash, they are claimed to be a safe way to conduct transactions. However, several people who have experienced first-hand credit card fraud would not agree to the safety claim of this plastic.

Credit card fraud is a broad term which refers to a situation where theft and fraud are committed, and a credit card is either involved or used. However, it isn’t as straightforward as it sounds. This is because there are about eight different types of credit card fraud! Knowing and understanding each scenario can help an individual take preventive measures to protect themselves against treacherous acts.

Following are the eight kinds of credit card fraud:

Stolen/missing card

It refers to a situation where a credit card holder becomes the subject of theft/burglary and finds himself without a card. It is the most common fraud and should be immediately reported to the company so that any financial damage could be minimized.

Acquisition of the account

This is a situation where a holder is oblivious to giving out personal information to a thief. The latter, once equipped with the knowledge, contacts the credit card company, declares a missing card and asks that the account address be updated. The result is that the thief acquires the card under the original card holder’s name.

Fake card

This involves a thief making a replica of someone’s credit card and using it to make purchases. Recently, though, such fraud has reduced because credit cards now arrive with an EMV chip embedded in them.

The card isn’t received

In such circumstances, what happens is that a to-be cardholder doesn’t receive his card at all because it gets stolen directly from the mail.

Dishonest application

A situation where a fraud uses another individual’s name and other information to request and obtain a card.

Multiple imprint

It refers to a situation where an old-fashioned, swipe card imprint machines are used. The fraud takes place in the form of a single transaction being recorded numerous times.

Collusive traders

Credit card fraud in such situations is a result of employees working together with thieves to swindle banks.

Card-not-present deception

This type of fraud is targeted towards businesses using eCommerce, mail order, telephone, and online methods to conduct trade. It involves using stolen credit card numbers to make purchases.