Types of Credit Card Fraud: Card Not Present Fraud


year, millions of dollars are lost to identity theft, with credit card fraud being not only the most common, but also the most costly type of fraud. There are many ways that criminals will commit credit card fraud, which often depends on getting a batch of credit card numbers and printing up realistic looking credit cards using these numbers.

Often, many cases of credit card fraud are not committed in the country where the credit card originated from, but rather in foreign countries. For instance, in the United Kingdom, about a third of all credit card fraud occurs out of the country, with much of it originating in France.

Usually, when this occurs, the criminal is committing some type of card not present fraud.

Card not Present Credit Card Fraud

One of the most common kinds of credit card fraud, due to how easy it is to commit, is card not present fraud. This type of fraud is committed by calling retailers, purchasing online, or through mail order catalogs. Unfortunately, this type of credit card fraud is rather difficult to protect against, because there are many companies who make their living through these types of orders.

Criminals who commit card not present fraud are, however, more likely to be caught, albeit not right away, because there usually necessitates some sort of paper trail. For example, in the case of ordering electronics online, the electronics will need to be shipped somewhere. Even if an innocent person's address is used, with the criminal picking up the items before they get home or using an abandoned house, there are still many clues left for law enforcement. It can also raise flags with a mail carrier, if they know the residents or are aware no one lives in the home. At the very least, this creates a number of patterns which can be spotted easily.

Unfortunately, more and more, there are ways where card not present fraud can be used to make intangible purchases, which are not as easily traced.

Credit Card Security Codes

Card not present fraud is a little bit more difficult, as it usually requires the security code on the back of the credit card. The names vary, depending on location, but these codes are often called CVC, CVV2, CID, CSC, and CVC2 codes. Visa and MasterCard Credit Cards have 3 digit security codes, while American Express has a four digit code. Depending on how the credit card number was obtained, keeping track of these codes is not always easy for the criminal.

For example, in the case of a credit card skimmer, which is often placed on an ATM, it is not always easy to keep the list of credit card numbers and security codes matched up.

Without this number, there are a number of places that will not accept an online purchase, however, frequently merchants do not want to trouble asking for this number, as it is one more step in the purchase process that could annoy the customer, causing lost sales. This is also attributed to the feeling that since credit card purchases are usually insured against credit card fraud, the merchant feels little accountability in terms of preventing credit card fraud, especially when it comes to preventing fraud or possibly annoying customers.

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