What is Credit Card Fraud?
Credit card fraud is a widely common identity theft and refers to using someone else’s card for payment or receiving cash funds. Many people around the world become a victim of fraudulent charges, which cost them millions of dollars. Unfortunately, the rate of credit card frauds is increasing and it is difficult to stop them. However, you need to be vigilant in order to take necessary steps that can save you from becoming a victim of credit card fraud.
It has many forms of hackers are becoming proficient at stealing people’s bank credentials online.
Cases of terrible identity thefts are reported every day, despite the fact that the payment industry has been creating advanced technological breakthroughs to protect its customers.
It is not enough to use card-validation codes, holograms, or EMV chip in order to create an environment of safe financial transaction. To deal with the situation, it is essential to increase the knowledge of credit card holders to take full advantage of these standard security advances.
Having hands-on knowledge on this will help cardholders keep their account information protected. Moreover, it will help merchant businesses and banks prevent financial losses of payment fraud.
Considering consumer education a key part of this process, here we have enumerated some common types of credit card frauds.
Common Types of Credit Card Fraud
1. Manual and Electronic Card Imprints – This is one of the easiest and common types of credit card fraud where an identity thief scans card information from card’s magnetic strip. The information is then used for fraudulent transactions or to encode fake cards.
2. Application Fraud – Generally, an identity theft happens when a thief uses someone else’s name and documents to apply for a credit card. Stealing victim’s supporting documents is the first step, which is later used for substantiating fraudulent application.
Although banks have implemented various measures to prevent this from happening; there is still need to do more. The most significant step is the validation of original documents. In addition, there have to be some intelligent ways to confirm customer’s identity.
3. Card Not Present (CNP) Fraud – This fraud is committed via your card account number and expiry date. A fraudster can use your credit card through internet or phone without having its physical possession with him.
Sometimes merchants require the verification code of your card that makes CNP fraud a bit difficult for the fraudster, but if he knows your account number, guessing your code becomes very easy for him.
4. Lost Card Fraud – It is another possible and common type of credit card fraud. Here, you lose your card or it is stolen. The fraudster who gets your card can easily use it for making payments.
As credit card machines require a pin number to use it, thieves often use it for making online purchases. That is why it is important to cancel your credit card when you find them missing.
5. Doctored Cards – This fraud happens when your credit card’s metallic stripe is erased with the help of a strong magnet. Thieves do it to change your card account details to match them with other valid cards to be used for payments.
What To Do If You’re A Victim of Credit Card Fraud
With credit card theft on the rise, payment industries have designed various measures to reduce the risk of financial loss. Even then, credit card fraud has become an everyday thing around the world.
To deal with this endless aggravation, it is vital for you to be aware of the right procedure if unfortunately, you become a victim of credit card fraud. Here we have rounded up some important tips that you can apply to minimize the financial loss.
Contact Your Credit Card Company – This is one of the most important steps that you can take to be least inflicted by the criminals. Inform your credit card company to get your card immediately canceled if you find something suspicious on your bills.
Major networks work with ‘Zero Liability policy’, which is designed to benefit the customers for any unauthorized payments made with their account information. However, if your credit card company does not follow this policy, even then Fair Credit Billing rule limits your card fraud liability to $50.
Still, you need to be vigilant for any charges on your credit card bill that you do not recognize. Calling immediately to your credit card company will cease your account until your company issues you a new credit card.
Check Your Accounts and Set New Password – Being cautious is a key to play safe. Once you have informed your card company, it is essential to check your other credit card accounts as a safe side.
Although only one of your cards has suspicious charges there is no surety that your other card accounts are safe. A fraudster, who can get the information of your one account, may also get hold of your other accounts. So, immediately set new PINs and passwords for your all accounts.
Inform Credit Bureaus or Call Police – The matter gets worst if there is a pattern of fraudulent payments after the first suspicious activity. Informing card bureau or calling the police, in this regard, becomes crucial not only to alert them but also to stop thieves from inflicting further damage to you.
Upon noticing unauthorized charges in your account, file police report to investigate the matter. Remember that, what may seem to you a simple credit card fraud, may lead you to some serious trouble of identity theft. Therefore, it is important to work on this recovery plan.
Monitor Credit Reports and Statements – You need to monitor your credit reports and statements at least for 4 to 5 months and notify the credit card company in case of any suspicious activity against your bank credentials. Adhering to this step will help you keep in the loop if there is any other sigh of credit card fraud after your first experience.
Monitor Online Shopping Details – This step ensures that someone else is not using your card information that is saved on multiple shopping websites. If your online account is not secure, remove your card details and change the password as well.
Bottom Line
As anybody can become the victim of this fraud, we all should know these tips. These can help us stay alert to all credit card activities, which can be a weapon to handle credit card fraud.