Credit Card Fraud: What You Should Know

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Credit card fraud has been an increasingly prevalent issue. In fact, the U.S. Federal Trade Commission (FTC) has classified it as the most common form of identity theft in the country.

Even the most vigilant credit and debit card bearers can have their information stolen and their cards used to make unauthorized purchases or get cash advances. Hence, the crucial nature of credit card fraud detection solutions. From the most basic precautions to the most advanced AI-powered tools, leveraging machine learning and data analysis, let’s explore the techniques available and define the best approach.

Understanding Credit Card Fraud

Credit card fraud is a common form of identity theft where criminals gain access to someone’s credit card, debit card, or bank account without permission. They use these means of payment to make purchases or get cash advances without consent from the cardholder.

The Evolution of Credit Card Fraud

In the early days of credit cards, when a simple swipe and signature were all it took to make a purchase, credit card fraud was as easy as physically stealing someone’s wallet. Of course, this can still happen, but cloning, card skimming, account takeovers, and card-not-present theft – where fraudsters obtain card or account information through phishing, hacks, or by purchasing it on the dark web – are now much more prevalent. As these attacks have become more sophisticated, being “careful” is no longer sufficient, and reliable credit card fraud detection is crucial.

Common Types of Credit Card Fraud

Credit card fraud includes various scams ranging from simple card theft to identity theft, where criminals open new accounts in their victims’ names. This is why credit card protection methods must be well-rounded and technologically advanced.

Credit card theft: This is the most basic form of credit card fraud. It involves stealing a physical credit card through pickpocketing, snatching it from a restaurant table, grabbing someone’s purse or wallet, retrieving a newly issued card from a mailbox, etc.
Account takeover: This attack relies on impersonation. The fraudster contacts the bank or other card issuer, providing enough personal information about the cardholder to gain access to their mailing addresses, passwords, PINs, and other details. This allows thieves to control the account and lock out the rightful user.
Phishing: This is often how account takeovers can be achieved in the first place. This scam consists in sending fraudulent communications that appear to be from a reputable and legitimate source, often through text messaging or email. The attacker aims to gain access to sensitive data, install malware on the victim’s device, or sometimes simply convince the victim to send them money willingly.
Cloned cards: This is a practice by which criminals create a duplicate of their victim’s card number for illicit use. This is achieved by fitting devices called “skimmers” over card readers – particularly on gas pumps – and sales terminals.
Card-not-present theft: This refers to any fraudulent use of a credit card without possessing the physical card. Since online purchases don’t require the card itself, having access to the cardholder’s name, account number, and security codes can be enough to use it. As for obtaining the information, it can be done through hacking or phishing. Some criminals even specialize in selling credit card information online, typically on the dark web.

If you have been a victim, contact 360 Consumer Law™ today!

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