What Should I Know About Credit Card Fraud?

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  • Written By: Carol Francois
  • Edited By: Bronwyn Harris
  • Last Modified Date: 16 February 2020
  • Copyright Protected:
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Credit card fraud occurs when an unauthorized person uses your credit card account to finance their activities. A credit card is a type of financing used to provide people with a revolving method of funding. This type of financing can be used at a wide range of stores and businesses worldwide. The amount of credit provided is based on a combination of income and credit score.

There are three different types of credit card fraud: credit card theft, credit card account number theft and identify theft. Credit card fraud is a huge problem worldwide. The vast majority of credit card fraud is orchestrated by organized crime ringleaders and is used to fund a wide range of illegal and dangerous activities.

Credit card theft is the most obvious type of fraud. The physical card is stolen and used to charge purchases without your knowledge. The card can be used at both physical stores and with Internet based stores, as the thief holds the card, which has the security code printed on the back.


Credit card number theft can occur in several ways: at the point of sale or via online transactions. The card number can be stolen when the card is swiped through a point of sale terminal. The terminal appears identical to the authentic unit to the customer, but the computer board has been changed to collect the account and pin numbers when the card is used. These account numbers are then reprinted onto a forged card and used to make purchases, or used to make online purchases.

A common method of online credit card fraud uses a sniffer or computer virus. These programs record all the keystrokes made by the purchaser and steal the information from the Internet transaction. The user is often completely unaware that their security has been compromised until the credit card bill arrives.

Identity theft is another method of fraud. The criminals steal your identity, request credit cards in your name, and have them routed to a different address. The cards are used to make purchases, but the bills are not paid. The credit card company then sues you for failure to pay your bills. This type of fraud takes longer to detect.

All credit card companies have a fraud and consumer protection policy. The responsibilities of the bank and the consumer are both clearly defined. If you can prove that your card or accounts numbers were stolen through no fault of your own, your liability is limited to a smaller amount of the total amount owed.



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Post 2

@MrsWinslow - That's a good point. I actually had my credit card number stolen once. I had to cancel the card, of course, but it didn't cost me any money and like most people, I had a couple other cards I could use in the meantime.

But a friend of mine had her debit card stolen, and that was a whole other can of worms. She didn't realize it right away and her rent check bounced. Her bank gave her a certain amount of her money back right away and she got the rest back later, after they investigated, but the whole thing was a much larger problem because the card was linked to her checking account.

Ever since, I rarely use my debit card because credit cards just seem safer -- maybe there is not any less financial risk, but there is less risk of giant hassles!

Post 1

Many people know that credit card fraud victims are pretty well-protected. In most cases, they will only have to pay a small amount, if any, of the fraudulent charges.

But debit cards are not necessarily as well protected. If someone steals your credit card, they're stealing your credit, not your actual money. (They are only stealing money from the bank.)

On the other hand, if someone steals your debit card, they are stealing your actual money! If you report any theft or fraudulent activity promptly, you will probably get most or all of the money back. But in the meantime, your bank account might be empty when you need it!

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