Technology is advancing rapidly, as are fraudsters, scammers, and cybercriminals, who always find new ways to trap customers or businesses in scams and frauds. While a credit card allows one to access instant purchasing power, scammers often build strategies with deceitful practises to catch hold of their prey.
Amid the surge in online shopping and digital transactions, safeguarding against credit card fraud is now more imperative than ever. Vigilance and awareness are vital shields against succumbing to criminals' ever-evolving tactics. In this blog, we've outlined the prevalent types of credit card fraud to protect you from falling prey to scams and frauds.
Credit card fraud is a broad term that describes theft and fraud committed using or involving a credit card as a fraudulent source of funds in a transaction. The purpose may be to obtain goods or receive unauthorized funds from an account.
Credit card fraud can occur in various ways, from simple physical card theft to sophisticated digital hacking, where thieves capture card details online without touching the physical card.
Following are the different types of credit card fraud that should put you on alert:
Credit card skimming, also called credit card cloning, is fraud involving a physical device called a skimmer. The skimmer is placed over the card reader device, making it challenging to detect. These skimming devices are placed on top of ATMs, gas stations, retail shops, or other businesses.
Identity theft, also called credit card application fraud, occurs when a scammer knows your credentials and applies for a card under your name and account. The thief can reap benefits from this card while keeping the victim unaware. Only when one checks for their statements does the victim become aware of credit card fraud happening to them.
Account takeover fraud, or ATO, occurs when the scammer unethically extracts the victim's credit card details. The fraudsters can go to credit card companies to change or reset their PIN or password, pretending to be you, with valid card credentials. The victim only knows he has been scammed when looking up his online account.
Phishing is one of the most common fraudulent practices where scammers deceive victims by weaving a convincing narrative that is hard to detect. They may represent themselves from reputable companies or direct individuals backed with legitimate-looking websites and sources. By doing so, they coax the people to fill out forms with personal information, including credentials and banking details. Later on, the scammers use this data for their benefit, leaving victims confused.
Card-not-present fraud is one of the safest scamming methods for fraudsters. They stay anonymous with their identity and secure sensitive card information, enabling them to reap the card's benefits. CNP fraud is more like an umbrella term for all types of credit card fraud without having the physical card in hand. This scamming method is almost too complex to catch and puts the victim in a tight position with the burden of debts they are not even responsible for.
As the name suggests, this type of card fraud happens when a credit card is stolen or lost. The foremost thing the cardholder must do when he learns about his card being stolen is freeze or block the card. The thieves can use the card until it hits the limit or has been hotlisted.
Keystroke capturing happens when someone unknowingly clicks the link, redirecting them to download malware. It does not seem suspicious, but it instals software into the system, which captures all the essential information, such as IDs and passwords. This software reads and understands every key we type on our keyboard, including critical details. Avoid installing software from shady online resources, and look for keyloggers on your devices.
SIM swap fraud, also called SIMjacking or a port-out scam, involves scammers taking control of a victim's phone number by transferring it to a different SIM card. This method intercepts all incoming calls and messages meant for the victim, including OTPs, bypassing security measures such as two-factor authentication (2FA). When the victim becomes aware that the number is blocked or gets a warning regarding duplicate SIM requests, they should immediately cancel and report it.
Often, discarding banking or financial documents casually without erasing sensitive information can lead to cyber criminals having easy access to bills they can use for scamming. This process is called dumpster diving. To prevent this from happening, shredding the papers or eliminating traces of sensitive information are a few preventive measures to protect oneself from being trapped.
In the digital era, where convenience often trumps security, it's crucial to remain vigilant and proactive in safeguarding personal information against cyber threats. Cybercriminals constantly devise new methods to exploit vulnerabilities. Therefore, it's imperative to adopt a comprehensive approach towards cybersecurity—this includes being cautious about sharing personal information, regularly updating passwords, enabling two-factor authentication, and properly disposing of sensitive documents.
Staying informed and taking preventative measures can significantly reduce the risk of falling victim to credit card fraud. Remember, in the battle against cybercrime, awareness and precaution are your best defenses.
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