What Exactly Is Credit Card Fraud?

Last year credit card fraud totalled £609m just in the UK (according to Apacs.) It is a growing problem and one that is linked quite closely to the ever-increasing incidents of identity theft. Despite the level of credit card fraud, many people will still carry cards instead of cash because they feel that their plastic is more secure. However, there are actually a few ways in which credit cards can be used to fraudulently run up large bills in your name.

What Exactly Is Credit Card Fraud?

A few examples of credit card fraud are –

  • Card theft
  • Card not present
  • Skimming

Here they are again with a little more detail –

Theft of the card

In this scam someone physically steals your credit or debit card from your bag, car, wallet, etc, and then pretends to be you in order  to deceptively gain goods or services.

Or, alternatively, they can then use the credit card for ‘card not present’ fraud.

Card-not-present fraud

In card not present fraud your card details may be acquired by stealing the card, skimming, using credit card receipts or by copying the necessary information during a transaction.

Using the 3 digit security code found on the back of the card on the signature strip the fraudster can then easily use this information to purchase via mail order, fax, phone or, more commonly, through the internet, all with YOUR credit card.

Counterfeiting (aka ‘skimming‘)

In this version of credit card fraud a dishonest employee in a petrol garage, coffee shop, etc, runs your card through an electronic device which reads all the information from it’s magnetic strip.

This information can then be used for card not present fraud as above.

What should you do if you believe your credit card has been lost or stolen?

  • Call your credit card issuer immediately to have the card stopped. Generally, you are only liable for a small amount of fraudulent use though, typically, most credit card companies will waive this fee.
  • Check credit reference agencies – alert them to the fact that your credit card has been used fraudulently in order to protect your credit rating.

Quick tips on preventing credit card fraud

  • Always keep your credit cards safe and be vigilant, watching what cashiers are doing with them at all times
  • Never disclose your PIN number, especially to your credit card company
  • Check your credit card statements thoroughly and regularly, looking out for any unexpected transactions
  • Shred your paperwork – some fraudsters will go as far as rummaging through your rubbish bin in order to obtain your personal details
About Lee Munson

Lee's non-technical background allows him to write about internet security in a clear way that is understandable to both IT professionals and people just like you who need simple answers to your security questions.


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