How Credit & Debit Card fraud works

In today's information age, we are using credit and Debit cards for cashed & cashless transactions in every places like; ATM's, Gas Stations, Shopping Malls, Online Payment Gateways and etc. But now time has come, when we have to aware about the proper usage of Credit and Debit Cards to avoid fraudulent activity with your cards.

First of all we need to know what Credit Card and Debit Card is;

Credit Card is a payment card that a cardholder uses to make payment to any merchant, for this the cardholder agrees to pay the money and other charges to the card issuer.

Debit card is a plastic payment card which is also same as credit cards, but in case of Debit card the money get deducted directly from the cardholders bank account.

Most of the Credit and Debit Cards contains these important information;
Card Number, Name, Valid From, Valid Thru and CVV No.

Generally Credit & Debit cards used a magnetic stripe to read and record all the information related to the card. Under this system, a cardholder at POS machines handover the card to the seller, who swipes the card and returns a printed slip for the cardholder to sign. This system has many security flaws like; the seller person can steal or clone the card and card information without the owner's knowledge.

Recently with the invention of CHIP & PIN technology it becomes harder for fraudsters to use a stolen card, because if someone gets the card they might not be able to make fraud transaction without knowing the PIN.

But the worry about card fraud is still not over. The fraudulent transaction now shifted to more vulnerable telephone, Internet and mail order transaction known as card-not-present (CNP) transaction.

There are various kinds of techniques that are used by fraudsters at different situations.

ONE : ATM's:

At ATM machines the fraudsters can apply various scam processes like; card skimming, card trapping, hidden cameras to steal your card information. Card skimming involves process like attaching a skimming device into the card reader slot and copy the card information. Where card trapping involves processes like; retaining the card into the machine and recover it later. Also they use hidden cameras to know the ATM PIN.

Beware; If someone trying to help you if your card gets stuck, they might be the fraudsters to reveal your PIN.

TWO : Online Transaction:

In case of online transaction someone will reroute you to a fake website. And when you enter your card details it can be stolen. Also, scammers use Spam software like; Keyloggers, which when you install on your computer your keystrokes for UserID, password, PIN's will be recorded.

Also public wifi is a good hacking opportunity for the scammers to steal your card details.

THREE : Mobile phone fraud:

Vishing or Voice phishing is a process used by fraudsters to send fake calls, fraud messages & SMS's, that will tricks you to reveal your card details, Account No. or PIN's. The hackers will speaks very smoothly and will act like they are from the card issuer or Bank.

Also mobile Apps that are not from authenticate sources can gain access to your information, ID's, Passwords and personal details.

FOUR : SIM card fraud:

The fraudsters can generate a duplicate SIM and block your original one. They will contact your service provider with fake identity proof and can get a new SIM while deactivating your old one. Through this one can generate PIN's or OTP's to make online transaction.

FIVE : Stolen card or Information Leakage:

Cards can be made by using personal information from application forms that submitted to agents. Even cards can be intercepted from mail before they reach the owner from the card issuer.

Here is the example's of some fraud cases related to Credit & Debit cards fraud:

Fraud Case 1:

Profession: Own Business
Country:India
Incident: Credit Card Fraud
One day when I was busy in my office I received a fake call from fraudsters and they introduce them self’s as bank authority. They said I need to upgrade my card to receive reward point. When I refuse to upgrade the card they said I will not receive any further reward points and my card will be blocked. They also claim that they have all the details about my card and other details which they need to verify. After that, I confirm my card details including Expiry Date, CVV and OTP with the scammers. And suddenly I get the alert that a transaction was made from my bank account. When I inform the bank they said they didn’t call me regarding any card upgrade.

Fraud Case 2:

Profession: Govt. Employee
Country:India
Incident: Debit Card Fraud
I was in my home doing some important work. I received a call about linking my aadhaar with my Bank Account. They said they are from the government organisation. And they already have all my details including name, account number, aadhaar no., phone no. and etc. They said I need to verify a 4 digit code that I will receive on my phone. Actually, it was the OTP for my debit card transaction. And after I shared the OTP I got a transaction alert from my account.

Beware: Never share your card details including card no., valid dates, CVV, PIN or OTP with anyone on phone/email or any other way. The bank never ask for your card no., OTP, CVV, PIN or Password.

How Credit & Debit Card fraud works How Credit & Debit Card fraud works Reviewed by Sukanta Das on August 05, 2017 Rating: 5

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