Fake Credit Card: What is Card Fraud and How to Detect It?
Posted: Sun Dec 22, 2024 5:16 am
The constant development of new technologies makes life easier for consumers. The problem is that, unfortunately, some people use this for criminal activities. In the case of fraud for issuing fake credit cards , more specifically, some tools assist in fraudulent actions. Learn about the most common types:
Fake Credit Card: Fraud Tools
Account theft: In this scheme, the criminal steals account information to obtain the victim's valid credit card number and gain unrestricted access to the account, either through a data breach or malware on the victim's computer that captures their keyboard movements or records their digital activity.
Phishing: The classic game of deception meets high technology, where the criminal simply lies to a victim via text message, email or cell phone – usually posing as an authority figure – to obtain the victim's personal identification information and create a fake credit card.
Skimming: In this common method that uses ATMs and other uk consumer data list readers at points of sale, the criminal hides a fraud device in the machine to copy credit card data.
Application Fraud: So simple, yet so frustratingly effective, this scheme involves using a fake or stolen account application to make a fake credit card in someone else's name.
Virtual Cloning: This introductory fraud scheme involves the criminal testing stolen credit card information through small virtual orders to verify that the card number is valid. Once a small order is accepted, bingo – the criminal knows the information works and quickly begins committing larger frauds.
Friendly Fraud: The name may be mild and harmless, but there is nothing friendly about a customer who places a legitimate order but fraudulently claims that the product was lost or there was a problem with the order. The consumer ends up with the merchandise that “never arrived” and the merchant has to deal with the loss and the hassle of refunding the order.
Fake Credit Card: Red Flags That May Indicate Fraud
One of the best ways to combat credit card fraud is to be aware of these common schemes. Luckily, most of them come with consistent red flags that can help you spot and stop a potentially fraudulent transaction before the damage is done. Different billing and shipping addresses: There are many legitimate reasons why a consumer might choose to have their order delivered to a different address than the one used for billing. But using the legitimate consumer’s address as the billing address and requesting that the package be delivered to a different address is an easy way for a criminal to place the order and receive the product before the cardholder realizes it has been stolen.
Tip: Demand phone numbers for both addresses, calling both if you are suspicious.
Non-residential addresses: Just like different billing and shipping addresses, most orders placed for delivery to hotels, offices, and PO boxes are likely legitimate. But it’s also nearly impossible to know who’s receiving the package, making this a more common scenario for fraud.
Tip: The only thing to do short of disallowing this type of order (not recommended) is to analyze these transactions with extra care.
Fake credit card: atypical transactions
Fraudsters rely on the fact that you are too busy to review every transaction and that you may not have your anti-fraud filters adapted to the tactics they employ. This is for good reason. If you’re not careful, some of the most popular scams can easily go unnoticed, such as:
- Unusually large orders, usually with the expedited shipping option selected
- Multiple orders destined for the same address, but with different credit cards used for each one
- Many orders with different delivery addresses, but made from the same IP address
- Multiple transactions made with credit card numbers with little variation
- Tip: Like the other red flags listed here, any of the above situations could be legitimate, so your best bet is to look into these cases more carefully to see whether or not it is fraudulent activity.
- Change of shipping address: Criminals face several challenges when trying to use stolen credit card data. First, they need the transaction to be approved. Then, they need to receive the goods before the cardholder realizes what has happened. A common tactic to overcome both of these problems is to order the product to the cardholder’s address (which helps speed up the transaction approval), and then call customer service to request a change of shipping address (which bypasses normal fraud detection policies, allowing the criminal to get the goods anywhere).
- Tip: Make sure there is a process in place where the consumer can stop any order where delivery plans have changed or packages have been rerouted.
Fake Credit Card: More Tips to Avoid Fraud
In addition to keeping an eye out for the red flags listed above, there are other steps you can take to strengthen your fraud prevention efforts, particularly when it comes to fake credit cards :
- Keep a record of fraud attempts, chargebacks and problematic customers
- Share information with merchant networks so you can create a larger database that can help identify fraudulent trends
Staying alert to the various methods of credit card fraud and the red flags for potential abuse can help protect your small business, but it’s a lot to do alone. If you’d like help, reach out to us to find out what we can offer as your trusted and valued cybersecurity partner.
Fake Credit Card: Fraud Tools
Account theft: In this scheme, the criminal steals account information to obtain the victim's valid credit card number and gain unrestricted access to the account, either through a data breach or malware on the victim's computer that captures their keyboard movements or records their digital activity.
Phishing: The classic game of deception meets high technology, where the criminal simply lies to a victim via text message, email or cell phone – usually posing as an authority figure – to obtain the victim's personal identification information and create a fake credit card.
Skimming: In this common method that uses ATMs and other uk consumer data list readers at points of sale, the criminal hides a fraud device in the machine to copy credit card data.
Application Fraud: So simple, yet so frustratingly effective, this scheme involves using a fake or stolen account application to make a fake credit card in someone else's name.
Virtual Cloning: This introductory fraud scheme involves the criminal testing stolen credit card information through small virtual orders to verify that the card number is valid. Once a small order is accepted, bingo – the criminal knows the information works and quickly begins committing larger frauds.
Friendly Fraud: The name may be mild and harmless, but there is nothing friendly about a customer who places a legitimate order but fraudulently claims that the product was lost or there was a problem with the order. The consumer ends up with the merchandise that “never arrived” and the merchant has to deal with the loss and the hassle of refunding the order.
Fake Credit Card: Red Flags That May Indicate Fraud
One of the best ways to combat credit card fraud is to be aware of these common schemes. Luckily, most of them come with consistent red flags that can help you spot and stop a potentially fraudulent transaction before the damage is done. Different billing and shipping addresses: There are many legitimate reasons why a consumer might choose to have their order delivered to a different address than the one used for billing. But using the legitimate consumer’s address as the billing address and requesting that the package be delivered to a different address is an easy way for a criminal to place the order and receive the product before the cardholder realizes it has been stolen.
Tip: Demand phone numbers for both addresses, calling both if you are suspicious.
Non-residential addresses: Just like different billing and shipping addresses, most orders placed for delivery to hotels, offices, and PO boxes are likely legitimate. But it’s also nearly impossible to know who’s receiving the package, making this a more common scenario for fraud.
Tip: The only thing to do short of disallowing this type of order (not recommended) is to analyze these transactions with extra care.
Fake credit card: atypical transactions
Fraudsters rely on the fact that you are too busy to review every transaction and that you may not have your anti-fraud filters adapted to the tactics they employ. This is for good reason. If you’re not careful, some of the most popular scams can easily go unnoticed, such as:
- Unusually large orders, usually with the expedited shipping option selected
- Multiple orders destined for the same address, but with different credit cards used for each one
- Many orders with different delivery addresses, but made from the same IP address
- Multiple transactions made with credit card numbers with little variation
- Tip: Like the other red flags listed here, any of the above situations could be legitimate, so your best bet is to look into these cases more carefully to see whether or not it is fraudulent activity.
- Change of shipping address: Criminals face several challenges when trying to use stolen credit card data. First, they need the transaction to be approved. Then, they need to receive the goods before the cardholder realizes what has happened. A common tactic to overcome both of these problems is to order the product to the cardholder’s address (which helps speed up the transaction approval), and then call customer service to request a change of shipping address (which bypasses normal fraud detection policies, allowing the criminal to get the goods anywhere).
- Tip: Make sure there is a process in place where the consumer can stop any order where delivery plans have changed or packages have been rerouted.
Fake Credit Card: More Tips to Avoid Fraud
In addition to keeping an eye out for the red flags listed above, there are other steps you can take to strengthen your fraud prevention efforts, particularly when it comes to fake credit cards :
- Keep a record of fraud attempts, chargebacks and problematic customers
- Share information with merchant networks so you can create a larger database that can help identify fraudulent trends
Staying alert to the various methods of credit card fraud and the red flags for potential abuse can help protect your small business, but it’s a lot to do alone. If you’d like help, reach out to us to find out what we can offer as your trusted and valued cybersecurity partner.