Credit Card Frauds- How Can You Prevent It?

  • Richard Marley
  • September 28, 2019
  • 6 minutes read
  • 5118

Ever since credit cards were introduced, credit card fraud has been elevating. One needs to stay a step ahead to avoid credit card fraud because the security mechanisms get tougher hackers to get smarter too. However, it is not always some clever or sophisticated hack that compromises your data – sometimes it’s you! Surprised? Well, don’t be. In an overwhelming number of credit card fraud cases, users themselves have been careless with their passwords and PINs, clicking on fraudulent links, sharing personal data, making them an easy target for such hackers.

Credit card fraud has many shapes and forms. The purpose of doing credit card fraud also varies. Some frauds are done in order to perform a huge transaction and some are done to purchase expensive goods for free. Any financial institution is exposed to a large number of attacks that are performed through credit cards. 30% of credit card fraud are recorded in businesses and financial sectors. Many e-commerce companies face great losses due to credit card fraud.

Types of Credit Card Frauds:

There are different techniques of credit card fraud that are adopted by fraudsters to perform malicious activities.  Following are the most common types of credit card fraud:

Stolen and lost credit card fraud

In this fraud, the card is either stolen or lost. The thief then uses that card for his good. Although stolen and lost cards cannot be used in the machine but it can be used in order to make online purchases. The way to avoid such transactions is to report the bank as soon as possible to reject the request asked from that credit card.

Application credit card fraud

This fraud happens when someone has requested the bank for new credit card issuance. The identity is first stolen by the thief and then use that identity to write an application. Thieves take help from the supporting documents which make it possible for them to write an application through which they substantiate the application. In such cases, banks often call the applicant to identify the identity, which can also be forged by the thief. 

There are many ways to investigate the true owner, although these ways are time to time forged by the fraudsters and vice versa.

Card Not Present (CNP) fraud

If someone has stolen or knows the expiry date and account number of your card, they can perform CNP fraud against you. This can be done through mail, phone or the internet. Some merchants need verification code which is of form xxx. A fraudster can apply all possible combinations while performing small transactions and can get the number.

Fake credit card fraud

Although creating fake credit cards is much hard. There is a magnetic stripe, a chip or in some cases hologram associated with each credit card and to forge it a difficult task. A fraudster having all that information can do this.

Fake Identity

A fraudster uses a temporary address and false name to obtain a credit card. In many cases, banks keep a checklist in which they acquire a passport or driving license for verification purposes. This fraud is hard to do, but a determined criminal can do this.

Stolen ID fraud

This fraud is done by the person who knows your card number and password. He can perform a huge transaction from it or issue a new card from this. This is the hardest fraud when it comes to recovering it. Many times, this fraud is revealed when the transaction is already done.

Counterfeit fraud

An accurate copy of the card is created by fraudsters by having all the required information. He swipes it on the machine to perform a transaction.

 Tips To Prevent Credit Card Frauds:

 Here are some tips to avoid falling yourself prey of credit card frauds:

Card lost or stolen? Report on it ASAP!

When you realize your card is lost or stolen, call your bank and report it right away so they can block it, preventing credit card scam. Banks limit your liability for transactions made on the card, depending on which card you have, from the time of loss to the time of reporting.

Opt for Email Statements:

People usually crumple up and throw away old credit card statements. Shredding your invoice before throwing it away is a good practice. So Always shred your statements as they contain information that can be useful for a fraudster. Do not throw away expired cards as is – always cut them into pieces, especially remove the credit card number. 

Credit card frauds are on the rise. Credit card scammers are getting smarter they use all sorts of tricks from phone calls to Email, credit card skimmer and even Wifi hotspots to steal your personal information. You could be a victim of credit card fraud or falling for it soon and not even know it. All that is required is you to be more vigilant and monitor your transactions. If you find any fraudulent charge on your credit card, contact your card provider without wasting a minute.

Beware of phishing scams:

Phishing is one of the most common methods that fraudsters employ to trick you. Phishing is sending an apparently genuine email with a malicious link that prompts you to enter your card number, code, PIN etc on a fraud site set up just for credit card scams.

According to Mark Hmarick, senior economic analyst at Bankrate, there is a constant stream of phishing attacks where someone is constantly trying to lure as into providing the passwords so they can steal funds or commit identity theft.

Always carefully check the source of the call and sender of such emails. If unsure, call the authorized number of the bank and re-confirm to halt yourself from falling victim to credit card fraud or identity theft.

Paying online? Check if the site is genuine and secure

Just as people discover the ease and convenience of shopping and paying online, fraudsters are coming up with innovative ways to online scam people. Statistics from the Australian Payments Network has revealed “card not present” fraud has surged from 1.02 million transactions in the 2016/17 financial year to 1.8 million transactions in the 2017/18 financial year. This represents an increase of a staggering 76 percent year on year.

Thankfully there are some steps you can take to limit the chances of becoming a victim of online fraud. Always ensure the website you’re shopping on is genuine and is secure. In the site address bar, the company name and security certificate details are visible and which you can click on. There is also an image of a lock and the URL begins with https.