Types of Credit Card Fraud

Personal Loan Info

With credit card nowadays being able to purchase anything, the information one has stored in his credit card is enough information to be good as cash. And we all know that anything that involves cash and purchasing power is subject to fraudulent acts. There are a number of types of credit card frauds that happen and victims often have a hard time recovering the lost cash unless the act was covered by an insurance term.

Here are some of the credit card scams you can be aware of to help you prevent it happening to you.

  1. Identity Fraud

This is a common fraud recurring in the credit card industry where a scammer applies for a credit card under someone else’s name. This type of fraud can be done through applying for a credit card using someone’s personal information or skimming an existing card to steal the information and imprint on a fake card. Stealing someone else’s personal information, the scammer is able to obtain a credit card that he can use and purchase goods and services. The charges applied are then charged to the person whose identity was stolen. The scammer is then free from paying the purchases he has made.

  1. Account Takeover

This is a type of fraud where the fraudster steals the information of the account owner and uses the information to request for a new card on a new address. Once the new card is in the hands of the fraudster, they are able to activate the card and use it freely without the owner’s knowledge.

  1. Counterfeit Cards

This happens when a valid credit card is “cloned” or copied and a duplicate card with the needed information is created. This duplicate card allows the fraudster to use the cards without the account owner’s knowledge until he receives the statement where he sees purchases he has not made.

Credit card fruads are one of the most common acts of scams that seem to be present in the financial industry. Banks and financial institutions have been improving and implementing measures for better security.