Credit Card Fraud

Our credit cards have a great amount of spending capacity and because of its electronic nature

What types of card fraud are there?

• Lost or stolen card fraud: This is when a card is physically stolen, or found after it has been lost, and then used by another person pretending to be you.
• Counterfeit card fraud (otherwise called ‘skimming’): A counterfeit or clone card is one that has been printed, embossed or encoded without permission from the card company. Most cases involve copying the information from a genuine card without the cardholder’s knowledge. Often you will be unaware of such a fraud until unexplained costs appear on your statements.
• Card not present fraud: This occurs when a criminal steals copies your card information during a transaction or from a receipt and uses it to make purchases where they are not present, such as over the telephone or through the internet.
• Mail non-receipt card fraud: This is when your card is stolen while in transit. Usually when your card issuer is mailing it to you.
• Identity theft on cards: This is when a criminal uses your personal information to open an account under your name. There are two types:
 Application fraud: This is when a criminal will steal documents, such as bank statements, from you and use them to open an account.
 Account take-over: This is when a criminal will use your personal information to pose as you and convince the bank to direct payments elsewhere.

How is card fraud prevented?

Chip and Pin was rolled out in February 2006 across the U.K. and is the combination of two security features. The first is the computer chip on the front of the card that stores the information more securely than a magnetic strip, the second is that your personal identification number (PIN) is required for all purchases. This makes the cards more reliable and harder to compromise than magnetic strips with signatures.

Many card issuers carry out their own fraud checks by monitoring any unusual transactions and then contacting you to make sure the transaction was legitimate.

What happens if fraud occurs?
Call the card issuer immediately! If a criminal has managed to commit fraud in your name you will almost always be protected from the cost. Not only will you be reimbursed for all money lost but you credit rating will remain unaffected, however this assumes you have taken sensible precautions like not telling others your PIN number.

What steps can I take to prevent fraud?
There are many simple steps you can make that will greatly reduce the chances of fraud. They are:
• Report lost and stolen cards immediately.
• Never let your card out of your sight.
• Keep your card in a safe place where it can’t be easily spotted and stolen.
• Keep your cheque book and cheque card separate from each other.
• Never tell anyone your PIN or keep any record of it with you.
• Check your statement carefully for unknown purchases as soon as it arrives.
• Never leave your card where details can be copied.
• Programme your card issuer’s lost and stolen number into your mobile. This way you can call them the moment your card goes missing.

About the Author

James Lee - Free lance Finance writer