The Different Types of Credit Card Fraud

Did you know that almost half of all Americans have been victims of credit card fraud? That’s over 100 million citizens, or about one-third of people living in the United States. Credit card fraud is a serious problem for both individuals and businesses alike.

Unfortunately, the world is rampant with this financial crime, which costs innocent people billions of dollars in damages each year. And it has only gotten worse with the pandemic. The Federal Trade Commission says over 30 million dollars of credit card fraud has been associated with Covid-19.

But what exactly is credit card fraud? Credit card fraud is identity theft. Thieves steal a person’s credit card information and often use it to make costly purchases.

There are many ways in which scammers can steal your information. So keep reading to learn about the different types of credit card fraud and how to protect yourself.

False Application Fraud

False application fraud is business fraud that targets a person’s credit information. In 2021, there were thousands of instances of false application fraud. And millions of dollars were lost by the victims.

Typically, scammers will create an account using your identity and information. This is carried out in several different ways. For example, a thief could steal your name and apply for a credit card.

Then they can max out the phony card, which will obliterate your credit score. Thieves can also apply for credit cards using your account information. They can use a fake name, then leave you with the re-payment fees.

This form of theft can leave a person or business devastated. To prevent this, always protect your bank information.

Account Takeover

An account takeover is a type of identity theft. It happens when a scammer steals your bank account info. Then, they can act as if they are you.

For example, they may contact the credit card company with your info and lock you out of your account. The scammer then changes your personally identifiable information (PII), like passwords and PINs.

People discover this theft in various ways. You could pull out your card at the store or during a family meal only to find that you no longer have card access. Or, you may try to log into your online account and find that you can’t log in with your previous information.

Card Not Present (CNP)

Card not present fraud totals billions of dollars worth of damages to businesses each year. CNP fraud occurs when a thief uses your credit card without having the physical card.

The most common form of this theft typically happens in e-commerce sales. After the scammer steals your card information, they’ll make a purchase online. It can also happen through mail orders and phone purchases.

CNP fraud is difficult to detect. This is because there is no way to verify someone’s identity during an online purchase. Sometimes you may be able to employ credit card chargebacks to address CNP fraud.

Merchants will have to return your money if you can prove that the charge was fraudulent. If you think you have a high risk business, you may want to seek additional help to protect yourself from fraud.

Credit Card Skimming

Credit card skimming has been a problem for almost a decade. However, the problem began in 2015. A card skimmer is a small device that hackers place inside card readers. When you swipe your card, the device steals your information and sends it to the thief.

You could become a victim of this crime anywhere you swipe your card. Most commonly, ATMs and gas stations tend to be the hot spots. This is because businesses leave them unattended.

So always be sure to check for a strange device inside credit card slots. This is an easy way for thieves to steal your information.

Lost or Stolen Credit Card Fraud

Lost or stolen card fraud is the most old-school way to fall victim to thieves. We all lose things, and some people can’t help but take advantage.

Whether someone picks up your card to keep it or steals it from your person, fraud will usually ensue. People can also steal your card info if you do not dispose of your cards properly.

Always keep track of your cards to prevent lost or stolen fraud. Shred old cards and close the account down. If you suspect you’ve fallen victim to this crime, contact your bank and freeze your account. Then you can cancel the account if any charges are tried.

Card Never Arrived Fraud

Card never arrived fraud is when a thief steals a card in transit. They could be a mail worker, a neighbor, or anyone who has access to your mailbox or letters.

The thief will skim through your mail and take new cards you recently opened. After stealing your information, they can make purchases before you realize what happened.

Always make sure to regularly check your mailbox, especially if you’re expecting a credit card. You can also install a lock on your mailbox if you live in a shady area.

Protect Yourself From Credit Card Fraud

We hope this article helped you understand the dangers of credit card fraud. Unfortunately, it can happen to anyone at any time. So always use fraud prevention and business protection.

Keep track of your credit cards, protect your online information, and contact your bank if you think you’ve become a victim. These are all steps you can take to ensure you’re protected from thieves. Visit our business section to read more articles like this today.

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