How Do They Do It,

Credit cards are a convenient payment method, although they do carry risks. Credit and charge card fraud costs cardholders and issuers hundreds of millions of dollars each year. While theft is the most obvious form of credit and charge card fraud, it is not the only way fraud occurs. A more subtle form of fraud is misappropriation.

The use of your card number (not the card itself) without your permission. Misappropriation may occur in a variety of ways. It doesn't matter whether or not their website is encrypted. Encryption means that your data is secure between your computer and the merchant, not between your computer and the processor. The merchant will have your card number regardless.If you're buying from an unfamiliar or likely untrustworthy store, consider using a temporary/virtual card number that card companies like Citibank provide. Watch out for suspicious behavior of your customers. Some characteristics are in common with fraudulent transactions, although none of this can be an actual proof of fraud it still remains a good measure of identifying suspicious behavior.

This is another trap to avoid. 3. Credit Card Fraud. Security of your account information is poor. Visa found only 17% of the 231 large merchants it questioned were following payment card industry guidelines regarding customer data security. You hear about some kind of identity theft every day in the news. This is a compelling reason to avoid creditcards altogether, and to monitor your credit report using an alert service to notify you when your credit is checked.

In this series we are going to cover one of the biggest problems all over the world. For those who may not exactly know what credit card fraud is, a simple definition. Credit card fraud is the act of making a purchase using someone else's credit card information. Sounds like something that should be difficult to do.

There are many types of credit card fraud, the most common we'll cover in this article. First there is what is called "mail non-receipt fraud" which is when a new or replacement card is sent by the bank and never received by the person it was supposed to go to.

This has been mostly combated by the banks sending out inactive credit cards where the person has to make a phone call in order to activate the card. Otherwise it can't be used. Unfortunately there are some banks that do not do this and still send out cards that are already activated. Then there is what is called "chargeback fraud" where a legitimate cardholder uses the card to purchase goods or services. Then when the statement comes they call the credit card company and claim they never received the item or service or that they never authorized the transaction.

Another type of credit card fraud is called "skimming" where an employee or merchant makes a second copy of the person's credit card details before processing the payment. This copy is then sold on the black market to professionals who clone illegal copies of these cards. Fortunately, skimming has become less of a problem since the introduction of CVV and CVS codes.

These are not encoded on the card strip but are physically written on the back of the card. This is a required three digit code to finalize all transactions. Without this code even a cloned credit card will not work. Skimming at ATMs has also been a problem. What the illegally set up ATM machine does is place a skimmer device somewhere in the machine that reads the magnetic strip attached to the card. This is used together with various devices that monitor the keypad of the ATM by attaching a fake fascia over the original keypad. Fortunately, this is not as common today as it was years ago when ATM machines were relatively new. Then of course there is "online credit card fraud" which is the most common type of credit card fraud today with all the transactions that people do each day.

Perpetrators use a variety of Card Fraud methods and keep changing their approach to trick their victims. The most common Card Fraud types in South Africa at present include Counterfeit Card Fraud, Lost and Stolen Card Fraud, False Application Fraud and Card Not Present Fraud. Card Fraud is difficult for the banking industry because perpetrators prey on the vulnerabilities of bank customers and do not target banking systems. Counterfeit Card Fraud involves illegally manufactured cards that use personal information stolen from the magnetic strip of a genuinely issued card.

In other cases, lost and stolen cards or old cards are encoded with the new information that was stolen from a genuine card for purposes of committing Counterfeit Card Fraud. Perpetrators usually use card skimming devices to steal the information needed for Counterfeit Card Fraud. Card Not Present (CNP) Fraud refers to a fraudulent transaction where neither the card nor the card holder is present at the point of sale.