Credit Card Fraud

Whenever fraud is committed using credit card or any other card, it is cumulatively classified as credit card fraud. Their aim may be to make use of the card for monetary transactions, obtain different services and comfort products.  The security system which plays a key role in preventing this is the PCI DSS i.e. Payment Card Industry Data Security Standard.

There are many ways by which such fraud may be committed. Some of them include: –

  • When a person is processing a payment to a portal which may be actually controlled by a criminal.
  • If the transaction gets approval from some third party without the knowledge of the account holder.
  • If a transaction is unauthorised and gets cancelled but the money gets lost and is not returned to the rightful owner.
  • Through discarded receipts, bank or credit card statements which lead them to make absurd charges on the person’s card.
  • When you swipe your card during transactions and if someone steals the card details in that period.
  • Using a credit card skimmer in the ATM machines the details of a person’s card maybe stolen to make different purchases in their name.
  • If the person’s credit card is genuinely stolen and sold in the dark web.

What to do if you fall victim?

  • If you realise that your credit card has been stolen or is being misused, then the 1st order of business is to report the incident to the credit card company.
  • Tighten up the security by constantly keeping tabs on your bank account and change your passwords frequently.
  • The police must be notified immediately just to be on the safer side. Also the credit bureaus must be intimated and they can be asked to freeze your credit, thereby by making your card inactive.  
  • It’s important to know where the unauthorised transaction may have taken place and thus one should always check all the online portals where the victim frequents.
  • Furthermore, one should constantly monitor the bank and credit card statements to check any details related to the fraudulent transactions.

Prevention of Fraud

  • Whenever a person get their bill, it should always be checked to ensure that the transaction was in actual made by that same person and not some fraudulent. This is done by regularly checking your transactions online.
  • Your account information is precious and must never be shared for digital security purposes.
  • Don’t get trapped into phishing scams where fraudulent send emails impersonating cable TV providers, internet service providers or even as a subsidiary of your parent bank, asking for personal information or showing new schemes they may have launched in attempts to extracts information from you.
  • When a person has more than 1 credit card, it is better to have in possession the card that one uses the most.
  • Credit reports must always be read to ensure there aren’t any loans, transactions or accounts with the person’s name on it especially if they had no part in it.
  • Phone scams are some of the most common methods of committing transactional frauds. They may pose are credit card service providers or may re-route you to their directory even when you are trying to establish a legit contact with your service provider.
  • Better to go full digital with your card and bank statements. This way your transaction statements get updated automatically and if any unauthorised transactions takes place you will be notified immediately. 
  • Faster reporting of fraud cases ensures a faster action from all the forums. This will enable cancellation of your card or your account at the appropriate time.
  • Stay in touch with you credit card provider through their online portal and as stated earlier, this helps you to keep a check on a daily basis.
  • While accessing any online portal, especially those that require your card details, always remember to check the address bar for “https” and NOT http’.
  • It is important to destroy or shed any bills or statement papers that have your account details or card details so that it may not be misused at the hands of people with ill-intentions especially dumpster divers.
  • Any old cards that are either expired or have been cancelled can also be cut into pieces or shred. This also prevents their misuse.
  • It’s important to not sign any blank receipts without checking what they are for and the amount specified in it.
  • Never write your account or card details on any piece of paper.

If these steps are followed from the start, then cases of credit card fraud will surely decrease.

Classification of Credit Card Fraud

Credit card fraud can be broadly classified into: –

  • LOST/ STOLEN CARDS: – When fraud is committed by stealing a card or misusing a lost one.
  • ACCOUNT TAKEOVER: – When personal information is given to phony websites or phished emails, this information is manipulated by fraudsters in procuring a new card or make luxurious purchases.
  • COUNTERFEIT CARDS: – It is seen in cases when the fraudster tries to clone a person’s actual credit card to complete whimsical transactions. This also includes the trend of card skimming.
  • NEVER RECEIVED: – This occurs when a newly issued card is stolen or never reaches the issuer. Mostly it’s caused when they are stolen by mail itself. 
  • FRAUDULENT APPLICATION: – This occurs when a fraudster impersonates as another and asks for confidential information as the impersonated.
  • MULTIPLE IMPRINT: – Also called as knuckle busters, this type is implied where one transaction gets recorded as multiple and may lead to misleading conclusions.
  • COLLUSIVE MERCHANTS: – When portal and brand merchants collude with fraudsters for some under the table advantages.
  • EMAIL/TELEPHONE ORDER: – This is the e-commerce services where online card-less transactions are made for different purchases.

Effective Countermeasures

Understanding the severity of the present scenario, several agencies have come forward with progressive defences to combat these fraudulent cases: –


  • Truncation of PAN i.e. by refraining from displaying the full number on transaction receipts.
  • Using reference tokens to quote card numbers instead of the real number itself. In this way, the data stays protected.
  • Additional security information in the form of PIN, ZIP code etc.
  • Validation through IP address.
  • Requirement of transaction OTPs or PIN numbers before authenticating a transaction especially while using online payment merchants like PayPal, GooglePay, Paytm etc.


  • Application of fraud detection and prevention software. These software analyse any unusual patterns and behaviour during transactions.
  • They also contact the cardholders to request verification.
  • Freeze accounts that may have fallen victim to fraud.
  • They can block cards if the card owners raise complaints regarding any suspicious activity.
  • They investigate any suspicious activity.
  • Multi-Factor Authentication verifies the card owner to go through several security checks by application of questions, security pins etc.
  • Multi-Possession Factor Authentication which verifies that the account is accessed by the card owner when accessing through other devices like smart devices.
  • Out of Band Authentication verifies that the transaction is occurring through a trusted communication channel.


  • Access doors of these institutions identifies all the card owners who gain access to a specific area.
  • They have increased protection while customers access various self-serving areas.
  • Advanced security systems for protecting ATMs and other services provided by the banks.
  • Exclusive CCTV system for further protection.
  • CHIP inclusion in cards helps prevent card skimming.


  • Effective enactment of consumer protection laws against cybercrimes related to card fraud.
  • Regular examinations and risk assessments.
  • Publishing standards and guidelines which protect cardholder’s information and monitor fraudulent activity.

Through conscious efforts of each governing body and all parties involved, such fraudulent episodes can be prevented, avoiding loss of hard earned money and trust among the people.

Published by Allena Andress

||Bibliophile|| Biotechnologist|| Aspiring Forensic Science specialist|| Researcher|| Closet singer and dancer|| Motivational Speaker||

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