How and Where Credit Card Fraud

Credit Cards

Card Not Present Fraud

Identity Theft with a Card Not Present Fraud

This is now the largest type of card fraud in the UK.  To combat CNP fraud most cards now have a 3 digit security number on the reverse which you have to quote when using the card online, on the phone or with mail order. Most retailers refuse to accept the card without this so it means that the theft of credit card number databases will not be as valuable to criminals as they can’t use them without the security code.

It is perpetrated by criminals who obtain your card details through the theft of your card details from discarded receipts or by copying down your details during a transaction.

Advice

  • Only divulge your 3 digit security code to reputable companies
  • Avoid companies who ask for your card details on an order form that you are posting to them.  There is always a risk that the order form may be intercepted and your card skimmed
  • When buying online make sure that the address line begins with https:// rather than the usual http://.  The “s” indicates a safe site.  Look also for a picture of a small padlock or an unbroken key in the bottom right corner of the browser window
  • Consider using a separate credit card for your online purchases and reduce the credit limit on it to what you think you will need.  This limits your risk and makes it easier for you to check your online purchases
  • Make sure you log off any site properly, don’t just close the browser window
  • Do not make online purchases from Internet Cafes or WiFi Hotspots or public computers


Counterfeit Card Fraud - Skimming

A counterfeit, cloned or skimmed card is one that has been printed, embossed or encoded with your genuine card details. Credit Card Skimming It’s usually a process where your data on the magnetic stripe is copied electronically onto another card.Identity Theft with a Cloned or Skimmed Card

The most common occasions when skimming happens is in a retail outlet, particularly bars, restaurants and petrol stations, especially in major cities and resorts.  You are most at risk in areas of high card activity that are not local to you. The employee who processes your payment takes a copy of your details and returns the card to you normally – then sells the details to an organised crime gang.

Sometimes skimming can take place at cash machines where tampering has occurred and a skimming device has been fitted.

Often you are unaware that you have been the victim of this type of fraud until your credit card statement arrives, showing purchases you did not make. Your cloned card is then used to make purchases by telephone or on the Internet with card-not-present (CNP) transactions or is used to construct a convincing but fake credit card used in retail outlets to make purchases in the usual way.

Transactions by criminals using stolen card details or cloned cards often occur in the Far East or the US.  Your card company will monitor your card usage and will often spot a transaction which is inconsistent with your normal behaviour, or which is physically impossible (e.g. if you appear to purchase expensive goods in Malaysia hours after using it near home).
AdviceCash Machines

  • Be wary of suspicious delays in obtaining authorisation for you purchase – try to ensure that your card remains in view at all times, especially in restaurants and petrol stations.
  • Check your card statements for suspicious purchases immediately on receipt
  • Consider using a separate credit card for your online purchases and reduce the credit limit on it to what you think you will need.  This limits your risk and makes it easier for you to check your online purchases
  • Always notify your card company before you travel abroad.  The card company will advise you if they need to know or not
  • Avoid ATMs in places that don’t look right.  For example, hotel lobbies or anywhere where the machine looks like it’s portable.  Stick with Bank ATMs but look out for fake skimming devices.  Familiarize yourself with the normal look and feel of your ATM
  • Keep your credit cards close when shopping or eating out.  Watch how salespeople and waiters handle your card.  Don’t let them take it away – don’t let it out of your sight


Mail Non Receipt Card Fraud

Identity Theft - Theft of Credit Card in the PostThis type of fraud involves your card being stolen in transit once it has been posted to you by your bank or building society.  Properties with communal letterboxes such as flats or student halls of residence are at particular risk.

Advice

  • Check your statements on receipt and be aware of the expiry date so you know when a new card is due to arrive
  • Notify your card company of any change of address
  • Keep track of your billing cycle – if your statement doesn’t arrive when expected, contact your credit card company
  • Arrange for mail suspension when you go on holiday or arrange for someone you trust to take care of it

Theft of Credit Cards

Identity Theft - Theft of your Credit CardSince the introduction of Chip and PIN, this type of fraud has fallen and is technically known as theft rather than identity fraud.  However, if someone steals a single credit card from your wallet or purse, you may not notice for some time, particularly if you have several credit cards, and they can still make CNP purchases because they have your card and with it the security code on the reverse.

The criminal is unlikely to be detected until the card limit is reached, and even then may continue to use it for smaller below the “floor limit” of shops.  Eventually your card balance will be substantially in excess of your credit limit, at which point the card company will probably telephone you.

Advice

  • Only carry as many cards as you need.  Consider also whether you actually need more than 2 or 3 credit cards?  Do you need a £5000 credit limit on the card you only use for petrol and travel expenses or supermarket shopping?  If not consider reducing the credit limits
  • Keep cards you do not carry in a secure place and check regularly that these have not been stolen.  Burglars are increasingly stealing your documents or cards in burglaries rather than jewellery or electronic goods
  • Cancel cards you do not use
  • If your signature is easy to copy, consider changing it to something harder to imitate
  • Keep your cheque book separate from your guarantee card
  • When travelling in countries where the risk of theft is higher than at home, think about using travellers cheques and local currency, rather than credit cards. 

According to Barclaycard the top 10 credit card fraud hotspots are:

  • Turkey
  • France
  • Spain
  • USA
  • Italy
  • China
  • Thailand
  • Ireland
  • India
  • The Netherlands

Top 10 Uk Credit Card Fraud Spots in January 2009 according to the Daily Record

  • London 38 per cent
  • Cardiff 34 per cent
  • Glasgow 31 per cent
  • Manchester 29 per cent
  • Brighton 27 per cent
  • Norwich 25 per cent
  • Southampton 24 per cent
  • Birmingham 23 per cent
  • Edinburgh 23 per cent
  • Plymouth 22 per cent

If you are travelling abroad on holiday or business:

  • Make sure your card company has up to date contact details for you including a mobile phone number
  • Make sure you have the 24-hour contact telephone number for each of your cards
  • Make sure your credit card limit is suitable and appropriate
  • Safeguard your PIN at all times – don’t give it to anyone even if they claim to be the Police or your bank
  • Shield your PIN with your free hand when typing it into a keypad in a shop or a cash machine
  • Consider asking your card company for a pre-paid credit card – you can use this as you would a normal credit card but you have credited a fixed amount to the card


Top Shredders

Choose a CROSS-CUT or DIAMOND-CUT shredder rather than a straight-cut.