Credit card fraud is a crime of deception. This occurs when a person claims to be the cardholder and encourages a merchant (company, service provider, seller, etc.) to exchange goods or provide services, while maintaining the belief that the account credit card will pay for the services. Almost always, the trader eventually learns that they will not be paid or that the payment received will be recovered by the card-issuing bank because he has been the victim of a credit card fraud. That's why most traders become more vigilant than ever when it comes to checking credit card numbers.
Credit card fraud is technically classified as a theft of identity. However, credit card fraud can take place in many ways –
The stolen card – The most obvious way to steal your identity is the theft of your card. This allows the thief to charge unauthorized charges on this card until you obtain a hint and cancel the charge or the credit card issuer warns you of the reason you are going over your limit.
Although technically, companies are supposed to verify the identity of the cardholder, this hardly ever happens today. This allows identity thieves to potentially charge thousands of dollars in services and goods before reporting on them. It is particularly easy to acquire items on the Internet and at gas stations where no one is available to verify the identity of the cardholder.
Mail Fraud – A type of credit card fraud involves using a stolen credit card number or an identity card with a fake number generated to order goods and have them shipped to a temporary transfer address. The thief then takes the ordered goods and sells them. When the person holding the card realizes that there is a fraudulent charge on his credit card report, she calls her credit card issuer and disputes it. This results in what is called a chargeback. The trader then loses the money from the transaction, in addition to the merchandise that he does not recover. This is not just the most common type of credit card fraud, but also the most expensive.
Flying Replacement Cards – In this scenario, a thief intercepts a card you ordered to replace a lost card and uses it. This happens sometimes if your card has been stolen once. Thieves may know that you are waiting for this second card and watch your mailbox. That's why so many banks are now asking you to confirm your withdrawal with your social security number, your mailing address, your maiden name and your personal questions. This type of theft has also encouraged credit card companies to make the new cards inactive until you call to activate a new credit card.
Third-party fraud – Not all credit card thefts are perpetrated by thieves. Sometimes the thief is the cardholder. First-party fraud or "billing fraud" usually occurs when a legitimate cardholder pays a good or service as usual but then claims to have never authorized the transaction or that the good or service has never been received. After having challenged the debit, the cardholder only has to pay a liability fee of $ 50.00 for $ 800 that he could legitimately buy with his card.
Skimming – Skimming is the theft of credit card information by a corrupt employee who can use a magnetic device to extract information from the magnetic stripe of your card or manually copy your numbers to sell to thieves or use them in their own circle of identity theft. Magnetic skimmer devices can extract your three- or four-digit security code from the black strip of the card. However, do not forget that most criminals do not need your PIN to perform "card not present" transactions over the Internet or over the phone.
Criminals check stolen numbers using a process called carding. This involves charging a very small fee, the ones you do not notice, on a credit card to see if it is still valid or if the PIN or password is working. If this is the case, they will reserve a day when they will maximize it and leave the merchant responsible for these charges.