Credit cards have become an indispensable part of our lives. With the increasing popularity of their usage, the chances of credit card fraud are also at an all-time high. Scammers have more ways than you can think of getting access to your credit card and rob you of your finances. Credit card fraud is a kind of identity theft in which a criminal uses your credit card to make purchases or get cash advances. They may physically steal your credit card, use your PIN and account number, or create a new credit card account in your name without your authorization. Once they accomplish their mission, they run up the charges you have to pay to the credit card company.
Here, you will get crucial information about credit card frauds and their elements.
Elements of Credit Card Fraud
Criminals can commit credit card fraud in multiple ways. Some types of credit card fraud elements include:
- When a person takes, uses, buys, sells, obtains, or forges a credit card information
- When an individual uses their own card to make a purchase even after knowing that it has been expired or revoked
- When someone sells a product or service even after knowing that the credit card has been obtained illegally or without authorisation
Types of Credit Card Fraud
Credit card fraud is a broad term, the ultimate goal of which is to evade payment and steal your money. While physical theft of a credit card from someone’s wallet is a simple form of fraud, today, scammers can fraud with just the card’s information without stealing the card itself. Credit card companies are well-aware of the scourge and keep developing new methods to mitigate unauthorised card usage; fraudsters also keep inventing workarounds to accomplish their ill missions.
Some common types of credit card fraud include:
- Stealing information and opening a new account in your name
- Taking over your existing account
- Using a fake or counterfeit card
- Purchasing without the card’s presence
- Using a stolen or lost card
Stolen Card
Physically stealing someone’s credit card is an old stand-by type of credit card fraud. You may simply lose your card, or someone may steal it along with your wallet or purse. You may lose your card during a car break-in or house burglary, or someone may steal it from your mailbox. When a fraudster gets access to your credit card, they may try to steal your money by running a shopping spree. The perpetrator will try to rack up the charges as fast as possible before you can report it to your credit card company or the police.
Card Imprints
Earlier, fraudsters used to make an impression of your card on carbon paper and steal the credit card number and other details. Although they don’t use carbon paper these days, they have a modern version known as the electronic card skimmer. It can read the card information from a magnetic strip on your card. There can be two types of skimmers: portable reader and stationary reader. A portable reader can read information about credit card when you walk down the street carrying your card in your pocket or purse. A stationary reader is like an ATM that remains affixed to a location. The fraudsters can then use the imprint to create a fake card that functions just like the real one.
Data Breach
Sometimes, the fraudster may only get the credit card number and not the complete card information. This usually happens when a hacker steals a company’s customer information. Companies that save their customer’s credit card details can have this information stolen. Then, the hacker may use the card number to make purchases over the phone or over the internet.
Identity Theft
This is one of the most severe types of credit card fraud. Once a fraudster takes your personal identity, they can use it for various fraudulent activities. They can open new accounts in your name, contact credit card companies on your behalf, or change details to take over your current accounts.
Credit card fraud is the ugly side of the convenience that comes with credit cards. However, vigilance and knowledge can help you prevent or at least limit the damage. While credit card companies are improving their in-built protection systems, the first line of defence begins with you as a cardholder.