| Credit card fraud is a crime of deception. It occurs | | | | expensive. |
| when someone pretends to be the cardholder and | | | | Stealing Replacement Cards - In this scenario a thief |
| tricks a merchant (business, service provider, seller, | | | | intercepts a card that you have ordered to replace a |
| etc.) into exchanging merchandise or rendering | | | | lost card and uses it. This sometimes happens if you |
| services while maintaining the belief that the credit card | | | | have been robbed of your card once. The thieves |
| account will provide payment for services. Almost | | | | may know that you are expecting that second card |
| always the merchant eventually learns that they will | | | | and watching your mailbox. This is why so many |
| not be paid, or the payment they received will be | | | | banks now ask you to confirm your indent to the bank |
| reclaimed by the card's issuing bank because they | | | | using your social security number, home address, |
| have been the victim of credit card fraud. This is why | | | | mother's maiden names and personal questions. This |
| most merchants are becoming more vigilant then ever | | | | type of theft has also inspired the credit card |
| when it comes to verifying credit card numbers. | | | | companies to make new cards non-active until you |
| Credit card fraud is technically classified as a crime of | | | | phone in to activate a newly received credit card. |
| identity theft. However there are several ways that | | | | First Party Fraud - Not all credit card theft is |
| credit card fraud could take place -- | | | | performed by thieves. Sometimes the thief is the |
| The Stolen Card - The most obvious way your identity | | | | cardholder. First party fraud or "chargeback fraud" |
| is stolen is when your card is stolen. This makes it | | | | commonly occurs when a legitimate cardholder pays |
| possible for the thief to make unauthorized charges on | | | | for a good or service as usual but then claims never |
| that card until you get a clue and cancel the charge or | | | | to have authorized the transaction, or that the good or |
| the credit card company notifies you to see why you | | | | service was never received. After disputing the |
| are going over your limit. | | | | charge the card holder only has to pay a $50.00 liability |
| Although technically businesses are supposed to | | | | charge for an $800 he or she may have legitimately |
| check the identification of the cardholder this almost | | | | bought with her card. |
| never happens in these modern days. This allows | | | | Skimming - Skimming is the theft of credit card |
| identity thieves to potentially charge up thousands of | | | | information by a corrupt employee who may use a |
| dollars in services and merchandises before you | | | | magnetic device to scoop information from the |
| realize it. It is particularly easy to purchase things over | | | | magnetic stripe on your card or manually copy down |
| the Internet and also at gas stations where there is | | | | your numbers to sell to thieves or use in their own |
| nobody around to verify a card holder's identity. | | | | identity theft ring. The magnetic skimmer devices can |
| Mail Order Fraud - One type of credit card fraud | | | | lift your three or four digit security code from the black |
| involves using a stolen credit card number or an | | | | stripe on the card. However keep in mind that most |
| identification card with a fake generated number to | | | | criminals don't need your PIN to make "card not |
| order merchandise and have it shipped to a temporary | | | | present" type transactions over the Internet or over |
| forwarding address. The thief then takes the | | | | the telephone. |
| merchandise ordered and sells it. When the person | | | | Criminals verify the numbers that are stolen by using a |
| holding the card realizes that there is a fraudulent | | | | process called carding. This involves making a very |
| charge on their credit card report they call their credit | | | | minimal charge, one that is not that noticeable to you, |
| card issuer and dispute it. This results in what is called | | | | on a credit card to see if it is still valid or if the PIN or |
| a chargeback. The merchant then loses the money | | | | password works. If it does then they will reserve a |
| from the transaction, in addition to the merchandise | | | | day when they will max it out and leave you or the |
| that they do not recover. This is not only the most | | | | merchant liable for the charges. |
| common type of credit card fraud it is also the most | | | | |