If you are a credit card owner, there is a great chance that you could face a fraud like millions of others in the world. With a significant rise in the use of credit cards, majority payments are now made electronically, which has led to a rise in the occurrence of credit card frauds.
Types of frauds
There are different types of credit cards frauds, and they change over time as technology advances. These are the two main categories of fraud.
Card-not-present frauds
This is the most common type of fraud, and it occurs when the information of the cardholder is robbed and used in an unlawful manner without the presence of the card. This fraud occurs on the internet and could be a result of phishing emails that are sent by fraudsters acting as credible institutions to rob financial or personal information.
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Card-present frauds
This has become less common today, but it is essential to know about this type of credit card fraud. It takes the form of skimming, wherein a dishonest seller swipes the customer’s credit card into a device that stores the information. After this, the data is used to make a purchase and the customer’s account is charged.
Mechanism of a credit card transaction
Due to the simplicity of credit card transactions, there is an increase in the number of credit card frauds. The transaction only involves two steps that include authorization and settlement. The parties involved in the transaction send and receive information to authorize or reject a purchase. If the purchase is authorized, it is settled by the exchange of money. Once a purchase has been authorized, there is no going back. All the fraud detection measures should be done during the first step of a transaction only.
How to counter frauds?
With continuous monitoring of cardholder’s information and expenses, it is possible to develop a computer model that could calculate the possibility that a fraud has taken place in a purchase. The credit card company would be issued an alarm if the possibility crosses a specific limit. The company can then take a decision to either block the card immediately or undertake further investigation, such as contacting the cardholder. To remain safe from such frauds, you need to keep in mind to never click on links in emails that ask you to provide personal information, even if the sender appears to be your bank. Secondly, before you make an online purchase, search for the vendor’s name and see whether the consumer feedback is positive or not. Lastly, when you make an online payment, check that the address of the webpage begins with https:// as it is a communication protocol that determines a secure data transfer; moreover, it confirms that the page of the website does not include any strange words or grammatical errors.
These are a few essential steps you can take to ensure that your credit card is safe from any chances of fraud. In case you encounter a credit card fraud, you need to notify your bank immediately and ask them to block the card with immediate effect.
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