Types of Credit Card Fraud

If you are using nervous while using a credit card in daily life, then you are not the one. All the people in the world are concerned about credit cards frauds.

Credit card fraud is a big problem seen by merchants all over the world. According to the U.S. Department of Justice, credit card fraud accounts for 40% of all financial fraud and as much as $6.5 billion worldwide.

As well as, 46% of merchants in a web-based survey said that fraud is turning much harder to detect. Sometimes it takes about 45 days to detect fraud however by that point the damage is already carried out to a merchant.

Types of frauds

Below are some of the types of frauds done by spammers:

Non-Receipt Card Fraud: This type of fraud happens when a brand new or a replacement of the original card is distributed by the bank via mail and it never reaches the real person. A few of the banks have tackled this drawback by organizing a system of sending inactive cards and the respective consumer has to call back to activate his/her card.

However, nonetheless, there are some banks that haven’t adopted this process and ship the activated card to their clients.

Card stolen or lost: This is the second most reason for credit card fraud. This type of fraud constitutes 15-20% of the total no. of credit card frauds. If your card is misplaced or stolen, report it immediately to your bank.

If someone finds it then there are more chances of them using your card in a fraudulent way. Your loss depends upon how much time you take to report a stolen or lost card.

Phishing: Phishing is a type of fraud that occurs while you shop online. When you make any payment on unsecured websites, hackers can easily clone your information like your card number, expiry date, CVV, or even more details.

This is always suggested that before shopping online, be ensured that the website is secured. The website should have an SSL certificate and show it on the web, or begins with “HTTPS.” The “s” stands for secure.

First Party Fraud: This type of fraud is not done by any fraud person. In this case, the thief is the owner of the credit card. This commonly occurs when a cardholder doesn’t want to pay his dues. Firstly, they use their card and then report that as an unauthorized transaction to not to pay from their pocket.

Counterfeit Card Fraud: The biggest reason for credit card fraud is Counterfeit Card Fraud. Almost 40% of credit card fraud is done by this method. Counterfeit credit cards are fake cards that have real account data stolen from victims.

Usually, the victims nonetheless have their real credit cards, so they do not know a criminal offense has occurred. One of many recognized methods used is card skimming whereby data contained on magnetic stripes of credit cards is recorded into chips illegally put in into EDC machines or via wiretapping technology.

Identification theft: Identity theft is among the most popular kinds of fraud. It could possibly affect not only your credit cards but your whole life as well. Credit card fraud by way of id theft happens when an individual has taken over your id by the use of accessing your driver’s license number and different important details about you. These identity thieves then collect and gather cards in your name, and use them.

Thus there are various forms of fraud that may happen related to a credit card. The one solution to be protected against credit card fraud is to be aware. Your documents may be stolen in so some ways, and that you must make sure that you all the time maintain a close eye on your funds.

There are particular insurances you possibly can take out to protect you, in the event you should ever turn out to be a victim of credit card fraud, and it’s a good suggestion to take a look at these options for further reference.

Tips to Avoid Credit Card Fraud

  • The most important safety factor is keeping your card safe. Maintain your cards close to your body, in a handbag, or pockets, and be sure you hold onto those items closely and be cognizant of where your personal objects are, and who is around you. Additionally, as an alternative to carrying all of your debit and credit cards with you on a regular basis only carry those that you want.
  • Have a look at the signs once you approach an ATM. If there’s wording similar to ‘enter PIN number twice to finish your transaction,’ go to Another ATM.
  • Never share your credit card details with anybody even if he/she is your best buddy. by no means disclose your card number, Expiry date, CVV, or any other details. These details can be used to make fraud transactions easily. Even for those who get calls from individuals claiming a bank employee, never share the details with them also because real bank employees never asked to share card details.
  • All the time maintain your contact information up-to-date along with your bank or credit card company. The bank needs this data for those who ever need to dispute expenses or to tell them of any fraud activity.
  • By no means use your credit card in online transactions on any website. When buying online, be sure that the website is secured. The website should have an SSL certificate and show it on the web, or begins with “HTTPS.” The “s” stands for secure.
  • Be VERY aware of spam emails. Beware of Financial Help Spams. Never click on any of the links from the unauthorized emails.
  • In case your card is stolen or misplaced, report this instantly to the issuer instantly. Many firms have free emergency numbers, particularly for such calls. By regulation, you have no further responsibility for unauthorized costs after you have reported it. Calling as soon as possible will reduce your liability for unauthorized transactions, and will assist the card issuer to catch the fraudster or block the transactions.
  • Read more tips

This concludes the article on Types of Credit Card Fraud and some tips to avoid this fraud. To read more content related to personal finances, insurance, investment, stock market, mutual funds, etc., stay tuned to our blog.

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