Credit Card Frauds

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Credit card frauds are the thefts and scams committed while using other's credit card fraudulently. Credit card frauds are the cases where one uses other's credit cards to purchase goods or services using the funds of other accounts, without their authorization. It's a sort of identify theft.

When we think of credit card frauds, the first thing that comes to our mind is stealing the credit card and then using them for buying products. However, according to RCMP, around 23% of credit card frauds happen in this way. 37% of the credit card frauds happen due to counterfeit card use. Criminals make use of the latest technologies to “skim” the data stored on the credit card's magnetic strip. Phishing scams are also other methods adopted by the criminals where fraudulent e-mails and websites are used to deceive the credit card holders and reveal their credit card and other personal and financial details.

Types of Credit Card Frauds

Credit card frauds can happen in several ways. But the biggest point of concern is that, criminals are using latest technologies to come up with new methods of frauds regularly.

Stolen Cards

Stolen cards are one of the very well-known modes of credit card frauds. Stolen credit cards remain usable until and unless credit card holders call up the card users and block their cards. Criminals can use the stolen cards to purchase any products or services if the card is not blocked.

Phishing Mails

Internet is a huge medium of credit card frauds. In case of CNP (Card Not Present) transactions, merchants have to rely on the person who is providing the information on the credit cards. Hence, if one can provide all the information relating to the credit card (such as credit card number, name of card holder, expiry date of the credit card and the CVV or verification number) during an online purchase, one can easily use the card while buying products/services. As correct information about the card is provided, the merchant recognizes him/her as the original owner of the credit card.

Criminals use various ways to steal information about the credit card. Phishing mails are one of the most well-known methods of stealing credit card information, where mails are sent to the credit card holders asking to provide information on the cards. Phones are also used to collect credit card information from the card holders.


Skimming is stealing credit card information through various means in an otherwise genuine transaction. In these cases, some ‘insiders’ (dishonest employees of the merchant) help criminals to steal information on the credit cards. Here, small electronic devices are used to read the information stored in the magnetic tape of the credit cards. Photocopies of the receipts are also used to steal the information.


Carding is the process to verify the authenticity of the stolen data of the credit cards. Criminals provide the information of the card in the website that deal with real-time transaction processing. If the information is accepted, it is understood that the information are correct.

Application Fraud

Application fraud is the scam during the application process. Here fake or stolen data is used to open an account in the name of others. Utility bills, bank statements are used to open fake accounts.

Account Takeover

Account takeover is taking possession of other's account. Criminals gather all the necessary information about the credit card and the cardholders. Then they contact the card issuer and masquerade as genuine cardholder and request them to change their billing address. At a later stage, they report a card loss and request for a new card (replacement) at the new address.

Precautions to Be Taken

There is always threat of credit card frauds. However, you can take some precautions to avoid those. Following are some of the ways you can prevent credit card frauds:
  • Being vigilant is the most useful way to protect your credit cards.
  • Don't give your credit card details to anyone.
  • CVV (Card Verification Value) or CSC (Card Security Code) is a three-digit secret code printed on the back of your credit card that you must not divulge to anyone.
  • While going for any online transaction, make sure that the website is a trusted one.
  • Don't click on any unknown link in your mail, it could be phishing mail.
  • While getting new credit card, make sure that you get that in sealed condition.
  • Sign on the back of your credit card immediately after you receive it.
  • Regularly monitor your account.
  • Memorize the PIN number of your card and DO NOT write it anywhere in your card.
  • Do not share your personal account information with anyone else.
  • Do not handover your card to anyone. Be physically present during a transaction.