| Credit card fraud is one of the biggest loss concerns in | | | | Lost and stolen credit card fraud formed 20% or the |
| a bank. The frauds are usually performed by a group | | | | second highest fraud reason. In most cases, the |
| of people either using counterfeit credit cards to cheat | | | | genuine cards are stolen from cardholders in their |
| unsuspecting merchants or in collaboration with the | | | | workplace, gymnasium and unattended vehicles. |
| merchants to cheat the banks. This group of people | | | | 3. Mail order or telephone order Fraud |
| who performed fraud is known as fraud syndicates. | | | | Mail order or telephone order fraud accounts for 10% |
| Types of frauds | | | | or is the third highest fraud reason. Usually the fraud |
| There are many types of frauds that have identified | | | | syndicates use shady telemarketers and deceptive |
| by the banks. To ease the efforts of fighting fraud, | | | | internet sites to obtain credit card information from the |
| they are classified into various categories by their | | | | genuine cardholders. In this kind of fraud, the three digits |
| natures | | | | the syndicates need the security number or card |
| 1. Counterfeit cards | | | | verification code (CVC2) which is printed at the back |
| Counterfeit credit card transactions are one of the | | | | of the genuine card to complete the fraud transactions. |
| biggest fraud reasons in the industry. It make up about | | | | 4. Non-receipt Fraud |
| 40% of all money lost through credit card frauds. The | | | | Non-receipt fraud occurs when the credit cards are |
| syndicates used various methods to obtain card | | | | intercepted by the syndicates when they are on the |
| information to create counterfeit cards. The illegally | | | | way to the cardholders which are usually by courier or |
| created counterfeit cards will have all the information | | | | registered mails. This fraud reason accounts for about |
| of the genuine credit cards in their magnetic stripes. | | | | 7% of the total fraud transactions. |
| One of the known methods used is card skimming | | | | 4. Other fraud reasons |
| whereby information contained on magnetic stripes of | | | | The balance 23% of fraud transactions made up of |
| cards recorded into chips illegally installed into EDC | | | | the following fraud reasons not exhaustive:a. |
| machines or through wire tapping technology. | | | | Fraudulent applicationsb. No cardholder signaturesc. |
| 2. Lost or stolen cards | | | | Unauthorized transactionsd. |