Credit Card Fraud Part 2

Unfortunately, thanks to new technology, there isn’t just one way for thieves to perpetrate credit card fraud. Numerous innovative methods exist, and every day thieves are devising new and improved ways to steal your credit.

The Stolen Card

When you lose your credit card, someone else can use your card and make purchases until you or the credit card company cancels the account. A thief can cost you and the credit card companies thousand of dollars before anyone realizes that the card has been stolen. There are plenty of places where using a stolen credit card isn’t as difficult as you may think. For example, credit cards are often stolen from individuals making phone or internet purchases. With gas at an all time high, it’s also not unusual for thieves to avail themselves of gasoline at stations where there is no verification of identity. New measures to combat this problem include having to key in your zip code. If the zip code doesn’t match the billing address, the transaction will fail.

Skimming

Skimming is the term used for the theft of credit card information by an employee of a legitimate business. The newest method for people to accomplish this is with a magnetic stripe reader that can be easily carried and concealed in a pocket. This practice has risen in restaurants and bars where customers hand over their card to the server at which point the server skims the information using the electronic device before running the card through a legitimate reader. This can also be performed manually if the thief has copied not only your credit card number and expiration date, but also the 3-4 number “security” code on the back of your credit card.

Credit Card Fraud Using Mail Order

When a thief orders goods from stolen card information, they will usually purchase the items from merchants where the customer need not be present. This includes mail order, telephone ordering and online purchases. Thieves count on the fact that many features to prevent fraud can’t be applied in this type of environment. Visa has implemented a new system where the user has to register with the bank that issues the card. The program is called “3-D Secure” and was developed by MasterCard and Visa to authenticate users to protect online purchases made with their credit cards.

Carding

Thieves use this term when they verify that stolen credit card information is still valid. The thief will use the credit card on a site that offers real-time processing. They make small purchases so they don’t charge more than the limit and so they avoid attracting attention by the human who is reviewing the transaction. Those individuals who practiced carding formerly used computer programs that were called “generators.” These programs produced a series of credit card numbers which the thieves could then test to determine which accounts were valid. Thieves can’t use this method any longer because of the new systems that require data such as your billing address, the 3-4 digit security code and the expiration date.

We all need to be careful in this age of technology where many things that were once private are now open and available for all to see. Be sure you protect your credit card information carefully so you can don’t become another victim of credit card fraud.