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How Serious Is Credit Card Fraud?


Video by Techquicky: How does credit card fraud protection work? How Serious Is Credit Card Fraud? How Serious Is Credit Card Fraud?

Not all acts of deception carried out for the purpose of financial gains are equal. Some are threatening on an international extend, others nationally, some industry specific, on the other hand it might only affect individuals, etc.

(Do Credit Card Frauds Get Caught?)

Then again you get the methods and amount of loss it causes over an extended period of time. Is it an a crime related to fraudulent signatures, performing unauthorised transactions, or receiving funds in criminal accounts, etc.

Examples Such As: Authorised and Unauthorised credit card fraud , tender corruption, tax evasion, financial misconduct, corporate, criminal and so on.

Legal penalties are based on the magnitude, extend, legislature and monetary value. As a result penalties may vary from examples;

How Do I report (Identity Theft In South Africa)

Such As:
  • Stepping-down from your professional position.
  • A slap with a fine for petty offenses.
  • Imprisonment for more serious crimes.
  • While in other situations it may be a combination of all the above; job loss (or criminal record), a fine plus jail time, etc.

If the Fraud Criminal Holds Some Professional Credentials like for instance:

A professor, doctor, lawyer or IT professional. They're likely to lose their practicing licenses, or get blacklisted from respected industries; due to their professional misconduct.

If the account holder report a stolen credit card in time, before any unauthorized transactions gets processed. They secure their potential financial loss in advance.

This means the best solution above the rest is reporting credit card fraud as soon as possible. Which will automatically stop the crime or theft from actually happening.

There Are Two Common Types Of Credit Card Fraud Cases:

One is when the criminal make purchases, financial transfers or pay money into mule accounts. The other is when the unaware original card holder pay funds into fraudulent or criminal accounts.

This financial crime usually involves debit or credit transfers. The criminal's motives is generally to buy products, or make payments to syndicate accounts.

Examples Of Credit Card Frauds:

The difference between - Authorised and Unauthorised credit card payments are as follows:

  1. Authorised Credit Card Fraud: Is when the real customer authorise a payment or financial transfer. Thinking that it's to a legit business or source, only to later discover it was a hoax.
  2. Unauthorised Credit Card Fraud: On the other hand is when the criminal is in possession of the card and they fraudulently make a payment without the authorisation of the genuine customer.

£1.20 Billion in total was fraudulently stolen by criminals during 2018. This is includes:

  • £354 Million in authorised fraud: Meaning the genuine customers transfered the payments to the criminals accounts.
  • £845 Million in unauthorised fraud: This means the criminals exploited the customers cards by making payment without their authorisation.

Need more information? Read more about the real life: Examples of credit card fraud

The banks and Credit Card Providers successfully stopped a total of up to £1.66 billion in unauthorised transfers. This means for every £3 an equivalent of £2 attempted fraud was prevented.

  • Strict regulations: Protects the Credit account holders money by shifting most of the risks to the card issuers, banks and merchants.
  • Credit Cards fraud: Is not as easy as it may seems; the stern online security measures are rapidly improving. Bank or credit providers work close to law enforcement to eliminate every potential opening.
  • Fraud Monitoring Systems: Cutting-edge network security technologies with intuitive behaviour monitoring tools; capable of rapidly zeroing-in on criminal activities. This makes the chances of fraud close to impossible.

How Does Fraud Happen On Credit Cards?

The are two primary ways to transfer money from a credit card account:

  • Card-Present Fraud: This is where the criminal has a physical card that they swipe, insert or cellphone App for direct purchases or withdrawals.
  • Card-Not-Present Fraud: Is done online or over the telephone. Is in any scenario where the actual card cannot be touched, examined or physically swiped on a device:
  • Examples such as: Online shopping, mail order services, digital purchases or online money transfer.
In Summary:

The breach usually happens without the account holders knowledge and authorization.

Unless the scammer tricked you into believing they're a legit: Company, college or service. Where unknowingly make payments into criminal accounts.

The internet has made CNP transactions (card-not-present) highly attractive to cybercriminals and without the relevant precautions a major pain for consumers.

Another less talked about cybercrime that's widespread. Is where criminals steal your identity to open new unauthorised credit card accounts; in your name and without your knowledge.

These types of fraud cases takes very long to resolve and it can seriously harm your reputation. Imagine receiving calls on your work number from debt collectors. They may even leave legal action messages with your receptionist; when you avoid there calls.

Credit card fraud penalties are serious but you innocence are very difficult to prove if you're a victim. Unless you have money to recruit independent investigators.

Although banks may refund your loss, if you reported it in time and they dragged their feet in blocking the unauthorised transactions.

The fact remains that losing your credit card physically or virtual may result in a daunting financial dispute. Because merchants and card providers are not as eager to reimburse negligence from the authorised card holder.