Credit card fraud refers to the unauthorized use of a credit card or credit card information to make purchases or withdraw cash There are several ways that credit card fraud can occur, including:
Types of Credit Card Fraud:
Skimming: This is when a device is placed on a card reader, such as an ATM or gas pump, to capture credit card information when a card is used.
Phishing This is when a scammer pretends to be a legitimate organization such as a bank or retailer, to trick you into giving them your credit card information
Lost or Stolen Cards : If you lose your credit card or have it stolen, a thief can use it to make unauthorizeed purchases.
Account Takeover This is when a scammer gains acces to your credit card account information and uses it to make unauthorized purchases.
Fake Websites: This is when a scammer creates a fake website that looks like a legitimate retailer and asks you to enter your credit card information
Mail Theft: This is when a thief steals your credit card information from your mail, such as a pre-approved credit card offer or a billing statement.
Old-fashioned counterfeiting: This is when a thief creates a fake credit card with your information on it and uses it to make unauthorized purchases.
Insider fraud This is when an employee of a business that accepts credit cards uses their access to credit card information for fraudulent purposes
Data Breaches: This is when a hacker gains access to large database of credit card information and uses it to make fraudulent purchases.
Mobile wallet fraud: This is when a thief gains access to your mobile wallet or mobile payment app and uses your stored credit card iFraudulent Card Not Present Transactions: This is when a thief uses stolen credit card information to make purchases online or over the phone
Card-swapping: This is when a thief intercepts your credit card at a store or restaurant and replaces it with a counterfeit card with their information on it.
Application Fraud: This is when a thief uses your personal information to apply for credit card in your name.
Bait and Switch: This is when a thief offers a good or service at a low price, and then switches it out with a more expensive item once they have your credit card information.
Employment or Loan Fraud: This is when a thief uses your personal information, including your credit card information, to apply for a job or a loan in your name.
Card Testing: This is when a thief uses a small, authorized purchase to test if a stolen credit card number is valid before making larger purchases.
Triangulation Fraud: This is when a thief uses multiple credit cards and shipping addresses to avoid detection by fraud detection systems.
Card-cracking: This is when a thief uses a software program to generate multiple credit card numbers and uses them to make fraudulent purchases.
Refund Fraud: This is when a thief returns merchandise purchased with a stolen credit card and receives a refund to a separate account!!!
Cash Advance Fraud: This is when a thief uses a stolen credit card to take out a cash advance at an ATM. Information to make unauthorized purchases
Example of Skimming: Credit Card Fraud
Credit card skimming is a type of credit card fraud where a device is placed on a card reader, such as an ATM or gas pump, to capture credit card information when a card is used . The skimming device reads the magnetic strip on the credit card and colects the information, which can then be used to make fraudulent purchases or create counterfeit cards.
Here is an example of credit card skimming in action:
- You go to a gas station to fill up your car.
- You insert your credit card into the pump to pay for your gas.
- Unbeknownst to you, there is a skimming device attached to the card reader.
- When you insert your credit card, the skimming device captures the information from the magnetic strip.
The thief can then use this information to make unauthorized purchases or create a counterfeit credit card. Using chip cards and covering the keypad when entering your PIN can help reduce your risk of credit card fraud.
Triangulation Fraud Example
Triangulation fraud is a type of credit card fraud where a thief uses multiple credit cards and shipping addresses to avoid detection by fraud detection systems!!! The thief will purchase goods or services using a stolen credit card, but have the items shipped to a different address to hide their tracks.
Here is an example of triangulation fraud in action:
- A thief obtains stolen credit card information from a data breach.
- The thief uses the stolen credit card information to purchase high-value items, such as electronics or jewelry, from an online retailer.
- The thief provides a different shipping address for the items to be delivered to, such as a vacant property or a friend’s address.
- The items are delivered to the alternate address, and the thief is able to pick them up without detection.
- The thief can then sell the items for a profit or use them for personal gain.
Triangulation fraud can be difficult to detect and prevent, as it requires coordination between multiple parties and a thorough understanding of fraud detection systems.