What is Credit Card Fraud?

While transacting with your credit card can be quick and easy, it is important to keep your credit card safe and secure. Failing to do so can result in you becoming the victim of credit card fraud. A credit card fraud is a form of identity theft, wherein a scammer uses your physical credit card or your card details, i.e., your credit card PIN and number, to transact without your knowledge.

What are the Types of Credit Card Fraud?

To ensure credit card fraud prevention, it is important to be aware of the various ways in which card scammers try to steal your money. Some examples of credit card fraud are mentioned below.

1) Credit Card Skimming

This type of credit card fraud occurs when you swipe your card for offline transactions. The Point-of-Sale (PoS) device is modified for such frauds and a small skimming device is attached to it. The device scans and stores the information on the credit card when swiped to complete the transaction. Like PoS devices, ATM card slots too may have such skimming devices attached to them along with a small camera to capture your credit card details. Watch out for such suspicious equipment and notify the authorities if you’re doubtful.

2) Credit Card Phishing/Vishing Attacks

Fraudsters can send false links as official bank communication to scam you. As soon you click on the bait, your credit card information becomes accessible to them. This is called phishing. A similar fraud known as voice phishing, or vishing, is common too. Here, fraudsters impersonate bank officials over the phone and ask you to verify your identity with your credit card details, etc. When you share the requested details, your credit card information becomes available to them. They may even ask for OTPs in a bid to validate illegitimate transactions they are trying to make through your card.

3) Credit Card Dumpster Diving

This credit card fraud occurs when you discard credit card bills or documents without destroying them. Thieves or hackers retrieve the information from these documents and can access your credit card account.

4) Credit Card Application Scams

This type of credit card (CC) fraud occurs when scammers impersonate you to obtain a credit card. They can use stolen documents and personal information to validate the claim. Usually, banks have strict credit card application processes to detect fraud, and they conduct a thorough background check to resolve such threats. However, as scammers can use this information to make changes to your existing information too, it is important to be aware of such common credit card scams to keep your account safe.

5) Credit Card Keyboard Capturing

This is one of the latest credit card frauds that leverages online transactions. Here, malicious software is used to collect your credit card details. The software gets automatically downloaded and installed on your system as soon as you click on the suspicious link. It then records every key you press on the system to capture your financial (card) details.

6) Theft or Loss of Card

If your credit card is lost or stolen, the chances of you becoming a victim of credit card fraud is very high if it falls into the wrong hands.

Why is Credit Card Fraud Detection Critical?

A credit card scam can impact your finances in several ways. Some of the common issues you might face include:

  • Fraudulent transactions made on the credit card are added to your statement which you then have to pay.
  • Failing to clear such bills on time attracts late payment fees along with regular interest charges.
  • Such high credit utilisation on the card can bring down your borrowing limit significantly.
  • If left unchecked, piling expenses and failed payments will lower your credit score.
  • A poor credit score hampers your chances of availing credit in the future.
  • The low credit card score may also result in the bank blocking your card.

What Steps to Follow if you are the Victim of Credit Card Fraud?

Each bank has a credit card fraud detection system in place to protect you from identity theft. However, if you notice a fraud credit card transaction before the bank does, it is critical that you report it and block the card. There are several ways of doing so:

  • Log in to your credit card netbanking account, block your credit card, and apply for a new one.
  • Call the credit card customer care, verify yourself, and report the credit card fraud.
  • Log in to your mobile banking app and block your card.
  • Visit your nearest bank branch and ask an executive to block your credit card.

Ways to Prevent Credit Card Fraud

With credit card scams becoming more and more prevalent, it is critical for you to take the necessary precautions to avoid becoming a victim of fraud. Here are some ways to protect your credit card information:

  • Do not leave your credit cards unattended.
  • Store your credit cards in a safe place when not in use.
  • To prevent online credit card fraud, check for the safety and authenticity of the websites before making any transactions.
  • Do not click on suspicious links received through email or SMS.
  • Do not share your credit card PIN, card number, or other card-related information with anyone.
  • Shred and carefully discard any credit card related documents, such as your credit card statement.
  • Report loss or theft of the credit card immediately.
  • Review your credit card account statement without fail.
  • Do not save your credit card information online.
  • Ensure that your credit card is swiped in your presence.
  • Check the ATM card slots and POS devices for suspicious cloning attachment before you swipe your card.

With all these precautions in place, you can go about using your credit card worry-free. In case you do not have one, you can also apply for credit card easily from the Finserv MARKETS website, which offers the best credit cards from some of the most popular banks. Apply today!

Frequently Asked Questions About Credit Card Frauds

  • ✔️How does fraud happen on credit cards?

    You can be a victim of credit card fraud if your card information falls into the wrong hands. The common types of credit card frauds are skimming, dumpster diving, phishing, vishing, keyboard capturing, and card application scams. 

  • ✔️How serious is credit card fraud?

    Credit card fraud can have a massive impact on your finances. If left undetected, your credit card score can take a bad hit, which will reduce your chances of getting access to credit in the future.

  • ✔️How much trouble can you get in for credit card fraud?

    Every fraudulent transaction made on your card gets added to your credit card statement. If you fail to clear the bill, you are charged late fees and interest on the outstanding amount. Also, your credit utilization ratio on the card takes a hit, bringing down your borrowing limit and, eventually, your credit score. A low credit score reflects negatively on your credit profile and reduces your chances of getting access to credit in the future.

  • ✔️Do credit card frauds get caught?

    Due to the increase in the number of credit card scams of late, banks today have efficient credit card fraud detection systems in place to identify and protect you from credit card identity theft. 

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