6 Common Types of Credit Card Fraud

  • By David Lukic
  • Published: Feb 10, 2021
  • Last Updated: Mar 18, 2022

Credit card fraud is a lucrative business, and criminals are raking it in using a variety of methods to steal your hard-earned money. There are different types of credit card fraud; some want cold hard cash; others just want to buy goods. Credit card fraud is tightly linked to identity theft, which poses a whole other set of problems. 

Your credit card information may not be safe even if your cards are never stolen or lost. Data breaches account for a lot of credit card theft and illegal usage. You might be surprised to learn that only about 0.1% of all credit card transactions are fraudulent. Technology has made it easier for criminals to obtain credit card data, and there are many different types of credit card fraud.

CNP (Card Not Present)

Types of credit card fraud

Card not present fraud, to put it primitively; If someone gets ahold of your card number and expiration date, they can potentially use it to make purchases. Some vendors require the PIN code as well, yet some do not. Even if they don’t have your PIN code (which they might be able to get off the dark web), they only have to guess 999 combinations until they crack it. This type of credit card fraud can be committed by phone, internet, or by mail. These are by definition card not present fraud and they are more common than you would think.

Application Fraud/Identity Theft

application fraud

If someone gets ahold of your identity information, they can apply for accounts in your name and obtain new credit cards and then start spending. Until you get the monthly bill or check your credit report, you won’t even know what happened. You can freeze your credit to keep this from occurring. If your information was lost to a data breach, you should definitely consider this option. Another helpful tip is to sign up for credit monitoring with a company like IDStrong.com.

Credit Card Skimming Fraud

Credit Card Skimming Fraud

Credit card skimming fraud is basically when thieves use credit card skimmers to grab the information off your card when you use it at an ATM or gas pump. These devices are not easy to spot unless you know what to look for, but this type of credit card fraud can be avoided by only using trusted ATMs at your bank and well-lit, highly trafficked gas pumps. Credit card skimming can be combined with making counterfeit cards based on your information. 

Lost or Stolen Cards Fraud

Another example of credit card fraud is lost or stolen card fraud. If you lose your credit card or someone steals it, they can instantly start using it. The sooner you report the theft or loss, the better. Most often, criminals will use stolen cards to make online purchases and buy small stuff that does not require a PIN code. Cancel the card as soon as possible and report any fraudulent charges to your bank.

Account Takeover

Card not present fraud

Account Takeover is yet again another type of credit card fraud. Fraudsters contact the credit card company and pretend to be you. Since a lot of identity information can be purchased on the dark web, they may have just enough to convince the credit card company they are you. These thieves can then change the mailing address for the statements, so you don’t know what they charged. Even worse they can have new cards issued and sent to them. One way hackers get this information is through malware on your computer that steals your bank login. This type of credit card fraud is extremely dangerous if it is linked to debit cards and your bank account. You could lose everything. 

Phishing Attacks

Most of the cybercrimes today begin with a phishing attack. You get an email that looks like it came from your bank or credit card informing you of an issue with your account. It goes on to say, click this link to verify your credentials, and the problem will be fixed. When you click the link instead of being taken to your bank or credit card login, you are taken to a fake website where you enter your credentials (which the thieves have now stolen) or your computer is infected with malware, which steals your information. Phishing is one of the most common ways thieves perpetrate credit card fraud. 

How to Protect Yourself From Credit Card Fraud

Lost or stolen credit card fraud

U.S. law states that victims of credit card fraud are only responsible for $50 (regardless of how much was charged). However, the fraud must be reported within 60 days. Banks and financial institutions typically have fraud departments and can put a block on your account. Merchants, however, are simply out the funds. There is no recourse for them. To keep your credit and debit cards as safe as possible, follow the list of tips below: 

  • Monitor your monthly statements carefully and look for any unauthorized charges. IDStrong’s credit monitoring service does that for you.
  • Report lost or stolen cards immediately.
  • If you are a victim of fraud, report it to your bank and cancel the cards.
  • Always keep your computer and other devices updated with security patches and antivirus/anti-malware software. Run deep scans often.
  • Only use one designated card for online shopping (credit not debit), so your loss is limited.
  • Only purchase from trusted merchants.
  • Be on the lookout for skimming devices on ATMs and gas pumps.
  • Never store your credit/debit card PINs with the cards.
  • Never share your credit card information with anyone unless making a purchase. 
  • Keep a secure record of all your credit/debit card numbers and expiration dates. Also, jot down the 800-number to call in case of fraud.
About the Author
IDStrong Logo

Related Articles

4 Most Common Bitcoin Scams

Scams are creeping into all areas of life these days. Any new type of technology is at risk. Bitco ... Read More

Romance Scams, The Love to Escape from

Scams have been around a long time, that’s nothing new. One of the most disturbing and heartbrea ... Read More

Top 6 Craigslist Scams and How To Avoid It

Craigslist is a website used for localized classified ads. It was founded in 1995 by Craig Newmark ... Read More

Common PayPal Scams & How to Prevent Them

PayPal is one of the top digital currency exchanges in the world. Nearly everyone has heard of Pay ... Read More

Cash App Fraud: What to do if You've Got Scammed Through Cash App

Peer-to-peer payment apps like Cash App, Venmo, Zelle, Apple Pay, Google Pay, and Facebook Payment ... Read More

Latest Articles

Financial Business and Consumer Solutions Data Breach

Financial Business and Consumer Solutions Data Breach

Financial Business and Consumer Solutions (FBCS) was founded in 1982 as Federal Bond Collection Services and currently has over 100 employees.

Wattpad Data Breach

Wattpad Data Breach

Reportedly, in the top 160 most visited websites in the world, Wattpad prides itself as the world's most loved storytelling platform.

Teleperformance Breach

Teleperformance Breach

Teleperformance began its operations in 1910 in Paris, France, as a customer service management company. The company founded its United States division in 1993, which is situated in Salt Lake City, Utah.

Featured Articles

How to Buy a House with Bad Credit

How to Buy a House with Bad Credit

Buying your own home is the American Dream, but it might seem out of reach to those with bad credit. However, the good news is, if your credit is less than perfect, you do still have options and in most cases, can still buy a home.

How Secure Is Your Password? Tips to Improve Your Password Security

How Secure Is Your Password? Tips to Improve Your Password Security

Any good IT article on computers and network security will address the importance of strong, secure passwords. However, the challenge of good passwords is that most people have a hard time remembering them, so they use simple or obvious ones that pose a security risk.

Top 10 Senior Scams and How to Prevent Them

Top 10 Senior Scams and How to Prevent Them

Senior scams are becoming a major epidemic for two reasons. First, seniors often have a lot of money in the bank from a life of working hard and saving.

Free Identity Exposure Scan
Instantly and Securely Check if Your Personal Information is Exposed on the Dark Web or Sold by Data Brokers
Please enter first name
Please enter last name
Please select a state
Free Identity Threat Scan
Instantly Check if Your Personal Information is Exposed
All fields below are required
Please enter first name
Please enter last name
Please enter a city
Please select a state
Please enter an age
Please enter an email address