Common Types Of Credit Card Frauds And How To Avoid Them
In present times invariably everyone owns a credit card, because of several reasons including perks and benefits associated with these cards. With all its usefulness credit card has its imperfections and there is always a chance of credit card fraud. What is a credit card fraud? When a person (fraudster) uses another individuals’ (owners’) credit card while the owner never gets to know. The situation surfaces when the fraudulent transaction noted and reported to the bank. To combat the frauds effectively, it is essential to first understand the ways in which credit card fraud are executed. Mentioned below are 6 common types of credit card frauds and ways to avoid them.
- Account Takeover
The first one is Account takeover which is in fact, one of the most common type of credit card fraud. In this a criminal will somehow manage to obtain all your information (name, house address, mother’s maiden name, etc.) and relevant documents after which he will contact the bank pretending to be you with a request to change the mailing address.
Criminal will be asked proof of identity which they will provide, since they already had your personal details. A replacement card will be then sent to the fake address and criminal gets a new card on your name. This is usually done online.
It isn’t rare for this type of fraud to occur. Therefore, protecting your personal information is the key element to avoid this type of scam, your password should be unique and strong and you should never leave such documents at a place where they can be seen by strangers.
- CNP Fraud
If somehow a criminal knows your card’s expiry date and account number of your account, they have the power to commit CNP fraud that is, a card-not-present fraud against you. This can be done online or via email order and telephone transactions. In simple words, the fraudster who has the knowledge of expiry date and account number of your credit card can use your card without actually having it physically.
You can prevent yourself from this fraud by keeping an eye out for frequent small payments on your statements.
- Counterfeit Card Fraud
The creation of counterfeit cards plays highest threat in credit card frauds. This type of fraud is usually committed through skimming; this means that criminal steals all the information that is placed on the magnetic strip found on the credit card, and then all the information is used to create fake card. These cards can be manufactured and encoded and will swipe like an original credit card. You can also say that it is an exact copy and fraudsters can simply swipe it to pay for their purchases. This type of fraud can also be committed by a criminal who acknowledges your card details. They can use these details to create a ‘fake plastic’ but here the magnetic strip on the card does not work actually. However, sometimes it is easy enough to sway a merchant that there is something wrong with the card and they will enter the transaction by hand.
This fraud can be avoided if merchants/cashiers look closely enough, they can tell whether a card is fake or real. To protect themselves from this sort of fraud, people who experience credit card related transactions must be taught how to tell apart fake and real.
- Lost/Stolen Card Fraud
This type of fraud is the easiest way for a fraudster to get hold of your credit cards without dealing with technology. Your credit card will be taken from your possession, either because you misplaced it or through theft and credit cards can be stolen in many different ways. Cards can be stolen or robbed from the mail before the card is delivered to you. The criminal who gets hold of the card will then use it to make payments. Withdrawing cash from ATM is a big no-no, because that requires a pin number. However, online purchases can be made from a stolen/lost card.
This is a typical cybercrime case and difficult to solve it needs a certain expertise to trace this type fraud. For this reason, it is important that when you realize that your credit card has been stolen or missing, immediately cancel your cards. Your funds stay safe this way.
- Application Fraud
This type of fraud happens when a criminal apply for a credit card in your name by fabricating an application using your personal information and supporting documents by stealing them first and providing fake contact numbers and other made-up details.
There are certain measures that have been devised by banks specifically for this theft. . The most important one is demanding original documentation only. Additionally, they will often call the employers to confirm identity.
- Electronic Credit Card Imprint
Now that you are aware of what credit card frauds are, you must take appropriate steps to prevent criminals from committing credit card frauds against you; save yourself and others from loss of money, and even imprisonment.