Introduction to credit card fraud

Credit card fraud is a type of LINK Identity fraud that typically occurs as a direct result of Identity theft, where the scammer will employ one of several techniques to steal a customer’s personal banking information and use that information for their profit.

There are two main types of credit card fraud. Application Fraud and Account takeover.

Application fraud involves a scammer setting up an account in your name and using in to either get loans or using it in further online crimes. Account takeover is where a scammer takes over an existing account. This account deals mostly with account takeover. You can read about application fraud here.

How Do They Get Your Banking Details?

The techniques scammers use to get your banking information can vary and for the most part covered in other places on this site. See below for both online and offline methods.

The online techniques used to compromise victims accounts include
phishing attacks,
malware installations,
advanced fee fraud,
and fake online resellers.
(click the links for more details)

Offline techniques include
Skimming, where employees of an otherwise legitimate company steal your information by cloning your card details
And theft - where scammers literally steal a credit or debit card.

What They Do Once They Have Your Details?

When scammers employ any of the above techniques to compromise a victim’s account is would be the natural assumption that the scammer withdraws the money or purchases items using the fake details, and often this may be true, but the chances of a scammer being caught is heightened if they do this. This had led to more sophisticated crimes being committed with compromised credit card details.

Once a scammer has a victims details, they may use them in conjunction with several other types of scams. These scams come in many variations that are similar to their check cashing fraud counterparts. Many of these variants are identical to the deviations associated with check cashing fraud, with the fake check being replaced with an unwitting victims bank account details or the details of a bank account set up in a victim’s name (see application fraud)

You can see common variants by clicking here and reading our article on check cashing fraud, which explains some of the templates scammers use to get victims to wire them money after they have passed stolen credit card details to the customer.

Preventing Credit Card Fraud

There are several things a customer can do to avoid having their credit card details stolen –

- Only purchase items from reputable sites. Scammers can operate sites that typically sell cheap goods. Mostly these sites are just after the money you spend on the fake goods but many of these sites will also try and steal your credit card information. Never enter your credit card information on a website you do not know. Many small websites will use secure merchants like Paypal to deal with their payment transactions.
- NEVER email your credit card information. It is unprofessional for any company or business to request you email these details and email can be very insecure.
- Always run up-to-date antivirus software. A popular way of stealing credit card information is for the scammer to install malware on a victims computer which steals these details.
- Be wary of emails from your bank. Many scammer pretend to be from your bank and within the email will put links that forward the victim to a webpage designed to look like the webpage of the victims bank. The webpage however will simply steal the victims banking details. Don’t click on links on emails that claim to be from your bank. Go directly to the bank homepage instead by opening your browser and typing in the relevant web address.