Credit card fraud is a form of identity theft that involves an unauthorized use of another’s credit card information for getting unlawful monetary advantages. The discarded receipts or trash receipts that get generated after we swipe the credit card, has the credit card number printed and if we sign on it later, can be easily copied. This information can be used in making purchases either by phone or on the Internet. Credit card fraud can also be accomplished when your pre‑approved credit card offers goes into the wrong hands.
People can even apply for a credit card in your name, if they have the right information. You won’t know a thing about it until the credit card company tracks you down and demands payment for the purchases. Once the fraud is done, you are left with the time consuming task of repairing your credit and getting your finances back on track.
Hence, there is nervousness in the on‑line trading world. Even though new preventive measures are taken against fraud, the on-line retailers continue to feel vulnerable. In addition, one needs to know that merchants are prohibited from keeping any security codes with them, after transactions are completed.
You need to call the card issuer immediately if your card is lost or stolen. You need to follow up with a letter containing your card number, the date the card was discovered missing, and the date you reported the loss to the card issuer. Once you report the lost card, you are not responsible for any unauthorized charges. If you are late in reporting a lost or stolen credit card, or do not become aware of unauthorized use until you receive a billing statement, your liability is limited by federal law. However, many card issuers have “zero liability” policies -this means that cardholders are not liable for unauthorized charges.
Credit card fraud has more than just financial impacts on both consumers and businesses. Its impacts, a loss of reputation and security for legitimate businesses, higher credit card interest rates and fees, higher prices for retail goods to cover credit card losses, mental stress for victims, business costs in managing and preventing fraud, refusal by credit companies to provide online merchant services.
There is a standard behaviour of criminal. They make one small purchase to see if the card is still active, and then make a major purchase. Multiple purchases in short period will also indicate the fraud. Hence, credit card companies also monitor cardholder transaction habits. This helps issuers to determine which purchases are standard operating procedures for the cardholder, and which ones deserve scrutiny.
Some preventive Do’s and don’ts:
Do not use your credit card to make daily purchases, like food and clothing. For ordinary purchases, leave your credit card in your wallet and use cash or debit card instead. Don’t use credit card to buy things you can’t afford. The worst thing you can do is simply forgo your credit card payment, no matter the reason. Simply call your creditor, briefly explain the situation, and ask that option you have in any situation that comes.
