Credit Card Fraud And Prevention

Credit card fraud refers to deceptive use of credit card information, such as CVV number, with the intent to make fraudulent transactions or commit identity theft. In such instances, a scammer may use your credit card or its details to make purchases without your knowledge. 

 

If left unmonitored, such transactions could lead to heavy financial losses. You must promptly alert the necessary authorities about such unauthorised activities. 

Credit card fraud may be committed in different forms, each posing a distinct threat to cardholders and financial institutions. Here are some common types of credit card fraud:

• Counterfeit Card Fraud

Fake credit cards are created by copying information from a stolen or comprised ATM card. This often involves skimming devices or compromised point-of-sale terminals.

• Skimming

Skimming devices are used on card readers  to capture the magnetic stripe data from credit cards, which is then used to create counterfeit cards. 

• Lost or Stolen Card Fraud

When a credit card is lost or stolen, unauthorised individuals may use it for fraudulent transactions until the cardholder reports the loss and the card is deactivated.

• Application Fraud

Stolen personal information is exploited to apply for credit cards in others' names, resulting in unauthorised charges and potential identity theft.

• Card Not Present (CNP) Fraud

Unauthorised online or phone transactions are made without the physical card. In this case, the information may have been obtained through illegal means.  

• Phishing and Social Engineering

Deceptive emails, messages, or phone calls are made to trick individuals into revealing their credit card information or other sensitive details.

• Identity Theft

Personal information is stolen to impersonate the cardholder, apply for a credit card, or make transactions in their name.

• Mail Theft and Fraud

Criminals intercept credit card statements or new cards sent by mail, enabling them to make unauthorised transactions.

 

If your credit card is lost, the chances of you becoming a victim of credit card fraud is very high should the card fall into the wrong hands. As a precautionary measure, it is advised to inform the authorities immediately about your lost card.

 

Here are a few ways through which you can identify if you have been a victim of credit card fraud. 

• Regularly Monitor Your Statements

Review your credit card statements regularly for any unauthorised or suspicious transactions. Ensure that all charges are familiar and legitimate.

• Set-up Account Alerts

Most credit card issuers offer account alert services. Set-up alerts for large transactions, online purchases, or any unusual activity. This allows you to be notified promptly of potential fraud.

• Check Your Credit Report

Obtain and review your credit report regularly to identify any unauthorised accounts or inquiries. You are entitled to a free annual credit report from major credit bureaus.

• Verify Unknown Charges

Keep an eye out for small, unfamiliar charges, as fraudsters often test stolen cards with small transactions before attempting larger ones.

• Use Two-factor Authentication

Enable two-factor authentication whenever possible, especially for online transactions. This adds an extra layer of security by requiring additional verification.

• Protect Personal Information

Avoid sharing sensitive details over the phone or online unless you are certain of the recipient's legitimacy.

• Check for Skimming Devices

Before using ATMs or card readers, inspect for any unusual attachments or signs of tampering. Skimming devices may be used to capture card information.

• Use Secure Websites:

Only make online transactions on secure and reputable websites. Look for ‘https://’ in the website address and use secure Wi-Fi connections.