Eleven Types of Credit Card Fraud

These are the most common types of credit card related fraud. By understanding them you will be aware of the risks and be able to prevent credit fraud from being perpetrated against you.

Application Fraud
For the purposes of this article, application fraud is taken to be identity theft for the purpose of applying for credit or a new credit card.
A thief will attempt application fraud by first stealing supporting documents from the victim.These documents are then used to substantiate the thief's fraudulent card application.
Although banks try to safeguard themselves from this sort of fraud by requiring original substantiating documents, telephoning employers and so on, criminals have been known to forge documents and even give false telephone numbers. Where there is a will, a way will be found.

Manual or Electronic Credit Card Imprints
Data from a legitimate card is imprinted or the magnetic strip is skimmed. The information from the card is then later used for fraudulent transactions or for encoding fake cards.

Card-not-present (CNP) fraud
Credit card fraud can be perpetrated against you if the account number and expiry date of your card are known. The fraud may be by way of mail, phone or internet and does not require your physical card to be present unless the merchant requests the card verification code.
To ensure the card works a criminal may attempt to process a small transaction. Scrutinise your bank statements for these types of charges. They are often only the beginnings of a major fraud attempt.

Counterfeit card fraud
This fraud usually involves skimming. The data is then transferred onto a fake magnetic stripe card. A skimmed counterfeit is used to produce a fully functional counterfeit card. There is an exact copy of the magnetic stripe.
A counterfeit card can also be manufactured when your account number and expiration date are known. The information is used to make what is known as a "fake plastic". The magnetic strip will not be functional but a fraudster will probably be able to con the merchant into punching in the transaction by hand.

Lost and stolen card fraud
This occurs when your card is physically stolen or lost and then used by a criminal, posing as you, to make unauthorized charges on your account.

Card ID theft
This occurs when a criminal has managed to obtain details about your card and uses the information to open or take over a card account in your name.

Mail non-receipt card fraud aka intercept fraud aka never received issue
This happens when your new or replacement card, having being sent to you, is intercepted by a criminal. The criminal registers the card and uses it.

Assumed Identity
In this type of fraud an individual uses a false name with a temporary address.
Banks have systems to protect against this type of fraud. They require account references for new customers and will check these account details to ensure they are not false. Banks may also require personal identification such as a birth certificate, passport or drivers licence before handing over credit cards.

Doctored Cards
The metallic stripe on a card can be erased using a strong magnet. A criminal will do this and then alter details on the card to match those of a valid card. The card will not work and the criminal will then con the merchant into punching in the card details manually.

Fake Cards
Producing fake cards takes a lot of time, effort and skill. There are many security features particularly difficult to reproduce, for example, holograms.
A fake card with fake numbers and a fake name is forged and used for transactions. The card is not linked to any real account and the credit card company is not liable to pay for the transactions as there is no user information.

Account Takeover
This can happen when a criminal, having gathered your relevant documents and information, calls your credit card company requesting a change of address to one controlled by the criminal. The criminal impersonates you by submitting "proof" of identity to the credit card company and requests a replacement card to be sent to the new fake address.

These types of fraud are not rare. Understand them and take steps to stop criminals from getting access to your cards and personal information.