What is Credit Card Fraud?
Credit card fraud is a term used for fraudulent activity committed by using a card, including a debit or credit card. The primary purpose might be to gain access to goods or services by using the card to purchase them, or to attempt to make payment for an account that’s controlled by an unscrupulous criminal. There are a few different ways in which this crime can be perpetrated.
Most commonly, the credit card holder will use their debit card to pay for the purchase, which makes it easier to conceal the true nature of the transaction. It may appear as though they have purchased something, when in reality they actually owe money to the retailer and can no longer cash the card. This then allows the thief to take what they want, but without having to show a valid and established account with the company. In this case, the card owner will be unable to verify any type of transaction as valid.
Credit card fraud can also be performed online. This means that someone could use an account on the merchant’s website as an identity. They can then create a merchant account and begin sending money from that account to an account that doesn’t exist. A legitimate merchant account would not allow such activity, and in the event the cardholder does not cancel the account, the merchant account is closed, and money from the cardholder is sent back to the person who issued the account.
In addition, a person who uses their credit card is not protected from identity theft as well. Identity theft is a way to use another person’s identity to obtain financial resources. It may occur via a social security number, a bank account number, or a driver’s license number. A person who has had his or her identity stolen can then be the victim of credit card fraud. In this case, a new credit card account would be set up and the old one cancelled, leaving the person who receives the money with no means of accessing their own funds.
A third way that credit card fraud can occur is by a third party. This includes a retail shop employee that swipes a customer’s card at the register, a bank that swipes customers’ cards to give them a cash advance, or a store that sells to a customer by mistake and not returning it to the customer, or a customer that receives a gift card but does not redeem it. or returns it, and then attempts to use it to make purchases at another store.
Credit card fraud can be a major problem, especially if the credit card is stolen by the thief. This makes it very important for customers to understand the types of credit card fraud that can happen, how it occurs, and the best way to protect themselves against it.