Methods of Credit Card Fraud

In today's high-tech, largely credit-card-dependent society, credit card fraud is a very real risk. There are many ways perpetrators of this crime can obtain and use credit card information. By developing an understanding of how credit card fraud works, you can avoid the theft and misuse of your private credit card information.

Application Fraud

In application fraud, thieves fill out a credit card application with someone else's name, hoping to obtain a card on that person's record and stick them with the bills. Many credit card companies have an array of protections to prevent this type of fraud, including credit report address checking. Address checking ensures that approved credit cards are only mailed to addresses listed on the applicant's credit bureau.

Intercept Fraud

When performing intercept fraud, criminals obtain legally-applied-for cards and use them for their own purposes. They may intercept cards by stealing them from mailboxes, taking credit cards from homes, or collecting and using stolen credit cards. Because these cards are legally applied for and issued, it is nearly impossible for credit card companies to prevent this. As such, the burden of preventing intercept lies on the credit card owner--who must carefully monitor his credit cards to ensure they are not lost or stolen.

Number Theft

Through number theft, thieves obtain credit card numbers to use for online purchasing or bill paying. Because this type of theft involves the stealing of numbers only--not physical cards--it is much easier for this type of fraud to be carried out electronically.

Card Replication

Card replication fraud involves the creation of copies of credit cards. To perform this type of fraud, fraud perpetrators must have the tools necessary to create credit card copies. Because these tools are so uncommon, this type of fraud is much less prevalent than other, more easily perpetrated forms of credit fraud.

Skimming

Skimming is a high-tech form of credit fraud that involves stealing electronic information from credit cards. Skimmers use electronic tools to capture credit information from cards. In some cases, these tools can gather credit information without coming into actual contact with the cards. In other cases, crooks place information-recording devices inside credit card machines and skim the information from cards.