Credit card fraud happens in various forms. It is not a single action but an umbrella term for multiple criminal acts involving credit cards and credit card information. The goal of credit card fraud can be to obtain money, steal identities and get free items.
As payment technology advances, so do the schemes and scams preying on it. Below are five of the most common types of credit card fraud.
1. Lost and stolen cards
When someone loses a card or is a victim of theft, the criminal who has possession of the card may use it to purchase goods or services. This usually takes place online, as physical transactions often require the entry of the PIN.
2. Counterfeit cards
Some people create fake cards using the details of another card. Obtaining this information usually takes place through a skimming device, which is a magnetic strip that steals card information when someone swipes the card. This creates an almost identical copy of the original card that the counterfeiter can use for purchases.
3. Account takeover
This crime involves much more than just stealing a card. In this situation, a criminal gets a hold of all login information, documents and personal details in order to get control over the credit card account. The person may contact the credit card issuer and request a replacement card with which to make charges.
4. Mail non-receipt
This form of fraud is also referred to as "never received." In this circumstance, a criminal intercepts a new or replacement card in the mail.
5. Fraudulent application
Application fraud usually occurs at the same time as identity theft. The thief may apply for a new credit card using the personal details of another person. If successful, the criminal may be able to obtain a card and use it for fraudulent purposes.
Criminal charges based on any type of credit card fraud may lead to significant legal problems that require a strong defense.