How to Prevent Credit Card Scams?

credit card fraud
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Credit Card Fraud, The Biggest Security Breach!

Credit card fraud can mean a stolen wallet from your gym locker and as a result getting a considerable amount credited to your account. All of this before you even know what happened.

Or it can indicate a leak of 145 million records from websites like eBay. Either think of Target’s attack back in 2013, where 70 million identities remained compromised. No pun intended! Some of the major credit card scams include:

  • TJX chains hacked in 2003. Data compromised from more than 45.7 customers and 1 million dollars’ worth of jewelry and electronic goods purchased from Walmart.
  • 4.2 million credit and debit card numbers compromised from Hannaford stores. A supermarket retailer. Customer data collected via malware then uploaded to the servers and used in 2000 cases of international fraud.
  • 83 million accounts of JP Morgan Chase compromised in 2014.
  • Phishing attacks against Sony employees back in 2014. Caused monetary damage of $100 million and a loss of terabytes of data.

What is credit card fraud?

Credit card fraud is a broad term indicating theft or fraud committed using payment cards (like credit cards, debit cards). However, the user is mostly unaware of the illegal usage of his credit or debit cards. Consequently, the criminal is using your card to purchase things or take out money from an account.

Fortunately, the victim of fraud doesn’t catch any financial liability. However, it is important to report a suspicious transaction or a stolen credit card as soon as possible.

What to do in case of a debit/credit card fraud?

If you notice any suspicious transaction or a lost card, then you must undoubtedly contact your bank immediately.

Your bank can:

  • Block any further transaction from your credit or debit card.
  • Verify whether any fraud has occurred.
  • In case of any fraud, remove the fraudulent charges.
  • Issue a new card.

How does credit card fraud occur?

Credit card fraud happens when a consumer reveals his or her credit card number to unknown individuals. Either through hacking of financial companies or emails. Other ways include identity theft, credit card theft, counterfeit cards, skimming, etc.

Types of credit card frauds:

Counterfeit cards:

Counterfeit cards are essentially fake cards with stolen information from account users. These cards appear to be legit with exact details replicated on the card. Therefore, the victim is often unaware that their card is in misuse.

Identity Theft:

Criminals steal personal identities, such as a social security number to open new accounts or access existing account details.

These identity thieves can make transactions using these cards. Therefore victims of identity theft have to close down all fake accounts and dispute these charges as fraudulent. Identity theft is used to commit application fraud or a complete account takeover.


Skimming refers to creating an illegal copy of a credit or debit card using a device that can duplicate the existing card.

Possibly executed by any business owner, who then sells your information to criminals. The information is used to make illegal purchases or counterfeit cards.


Phishing is the use of deceptive websites or emails to fool consumers. It’s made to look legitimate with the use of bank logos and URLs resembling the banks’.

Thereby convincing the users to reveal their personal information such as passwords, account numbers.

Telephone phishing is a criminal who pretends to be a bank employee and tries to get the personal information, card details, a bank account number or password to make a counterfeit card.

Card not present Fraud:

This kind of fraud is related to a card without any physical involvement of the criminal. However, the expiry date, CVV code, card number (related to the payment card) is then known. This kind of fraud can be committed through phone, email or the Internet.

Credit card fraud statistics:

  • According to the Nilson report, almost 47.3% of global fraud losses occur from the US alone.
  • 10% of Americans are victims of credit card fraud and 7% of debit card fraud.
  • $5.55 billion is in credit card fraud worldwide.
  • Nearly 48% fraud originates from email.
  • In 2014, Card not present fraud amounted to 45%, counterfeit cards amounts to 37% and stolen cards 23%.

How to prevent credit card scams?

  • Note down your account numbers and bank contact numbers. Keep them in a safe place, preferably in a locker.
  • Keep copies of your purchases and ATM withdrawals. Validate them with the monthly statements. Notify your card provider immediately if you find any fraudulent use.
  • Keep your purse and wallet with you at all times.
  • Carry only the cards which you might need. Notify your card issuer if you are moving overseas or going on a vacation.
  • Notify the bank/post office if you change your address.
  • Never give your PIN or password to anyone.
  • Change your net banking username and password frequently.
  • Never provide your personal information to a telemarketer or on any website.
  • Watch anyone who is handling your card in a restaurant, supermarket or anywhere else. Make sure that the card you receive is your card and not a fake card.
  • Always avail e-statements of your credit card so that you can verify the charges quickly.
  • Be wary of any mail or random offers either in your email or mailbox.
  • Shred any document which might reveal your personal information.

With these tips, a consumer can remain safe from any fraud.

Be aware of your rights and responsibilities and avoid a higher loss and headache later.

Also Check: How To Identify Real and Fake Rs2000 and Rs500 Currency Notes?

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