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Top 6 Most Common Credit Card Crimes

by on August 27, 2011

Top 6 Most Common Credit Card Crimes

With the proliferation of credit cards across the globe, the unfortunate reality is that credit card crimes are on the rise, and unscrupulous criminals use all sorts of sophisticated methods to use them illegally.

Common credit card crimes draw on both no-tech and high-tech techniques to cheat unsuspecting cardholders and steal the identities of unwitting citizens, putting their credit ratings and financial security at risk.

With that in mind, here are the six most common credit card crimes, along with tips you can use to protect yourself.

No-Tech Credit Card Crimes

There are several common credit card crimes which have been in use as long as credit cards themselves, and these card fraud crimes do not rely on any type of technology. They include:

  1. Application Fraud. In these circumstances, criminals fill out unauthorized credit card applications using stolen or falsified personal information, including names, addresses and social security numbers. There are two main types of application fraud: assumed identity fraud, in which a criminal poses as an unsuspecting consumer and applies for a card, and financial fraud, in which a criminal combines authentic and fake information, such as a real name and social security number but a fake address, to get a credit card. You can protect yourself from these crimes by regularly checking your credit history through a major reporting bureau and identifying any unauthorized cards which have been issued in your name.
  2. Intercept Fraud. This age-old technique involves stealing legitimately issued cards from the mail before the legal recipients get them. If you have been approved for a new credit card but never received it, check with the issuing financial institution to see if the card has been activated. If it has, report it; if not, report it as lost in the mail. The financial institution will nullify the missing card and issue you a new one.
  3. Abuse of Lost or Stolen Cards. Criminals often risk detection by using lost or stolen cards to take cash advances or purchase valuable or expensive items. If you lose a credit card, report it immediately, and keep a close eye on your statement to see if any unauthorized purchases or cash advances have been taken or attempted.

High-Tech Credit Card Crimes

Other credit card crimes have only evolved with the appearance of modern digital technologies. These high-tech crimes include:

  1. Skimming. This technique involves a breach of the digital information stored on the magnetic strip on the back of the credit card; the information is then copied to a cloned card or used online to make purchases. Again, the best defense against this kind of crime is to watch your statements for unauthorized purchases closely, and to take care to use your card only with trusted merchants whose legitimacy you can verify.
  2. Website and Merchant Cloning. Criminals with computer hacking and web design skills have also moved into website and merchant cloning, which essentially redirects traffic seeking to complete online purchases from a legitimate site onto a fake site. Then, the user’s credit card information is accessed when the unwitting consumer enters it into the purchase completion form on the cloned site. The single most effective defense against this kind of fraud is to avoid using your credit card online if possible.
  3. Triangulation. This is a sophisticated scam, in which online criminals offer products at very inexpensive prices through websites and tell the consumer that they only need to provide their credit card information once the product is delivered. Then, they acquire that product at full price from a legitimate merchant using a fake or stolen credit card number, deliver it and collect the consumer’s credit card information. That credit card information is then used to take cash advances or make illegal purchases. You can avoid triangulation by refusing to do business with online merchants who offer very cheap prices and only demand payment upon receipt of the purchased item(s).

Defending Against Credit Card Fraud

While countries and legal jurisdictions throughout the world have laws in place to punish those found guilty of fraud-related credit card crimes, it is incumbent upon you to protect yourself and your personal information.

Whenever you apply for, activate or use a credit card, be sure to keep a record of the transaction for future reference. It’s also important that you regularly monitor your credit scores and credit card statements, and remain vigilant for potential misuses of your identity or accounts. If you are the victim of a credit card crime, report it immediately, both to the credit card company and the police.

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