Card Not Present Credit Card Fraud

One of the most common and difficult to protect against types of credit card fraud is card not present credit card. In this type of fraud the criminal will obtain a credit card number and expiration date. They will then begin using this information to make online purchases or order items over the phone. Since the criminal does not actually have to show a credit card to commit this type of fraud, it is requires much less effort to commit.

There are a number of relatively easy ways for a criminal to obtain a credit card number and to commit card not present fraud, it is often only necessary to have a credit card number and expiration date, but for more extensive fraud the security code, which is printed on the back of the credit card is also needed.

From a Criminals Perspective

One of the main disadvantages to card not present credit card fraud is that the criminal must leave some sort of paper trail. When it comes to ordering items online, they will need to be delivered somewhere, so this at least gives law enforcement a place to start.

Of course, this is hindered by criminals using other peoples addresses and stealing mail, using post office boxes set up with false information, and using abandoned properties. However, since the criminal must still physically pick up the package or at the very least pay someone else to do so, there is much greater risk of exposure.

However, the flip side to this is that many credit card companies will not peruse small amounts of fraud, instead simply writing it off as a loss and passing it on to their customers. By not acknowledging the fraud and its frequency, they credit card companies are able to maintain an air of trust and security, which works in the favor of the criminal.

This is actually to some extent true of many types of identity theft, as some prosecutors do not even attempt to try cases unless there are more than $5,000 in damages.

Auction Sites and Card Not Present Fraud

More and more, criminals are using auctions sites like eBay or Yahoo Auctions to commit this type of fraud. When dealing with an average seller, who may be getting rid of their old laptop or a no longer used game system, the seller will often ship the item out as soon as they have received payment. Then when the real owner notices the charges on their credit card, they dispute the charges. By this time, the item has usually already arrived in its location.

Using auction sites to commit credit card fraud ends up having a much bigger impact on the average consumer and is often easier to perpetrate than attacks against larger online businesses. This is in large part because the criminal can open up a direct line of communication with the seller, as well as having them preform special shipping provisions, which a larger merchant would not do.

Of course card not present credit card fraud occurs at virtually all online merchants, but it is generally more common among auction sites.

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