Online credit card fraud is a broad term used for either fraud or theft that is committed in online transactions using either a credit card or a debit card for syphoning off funds in a transaction. It could be either for purchasing goods or attaining funds illegally. Identity theft is the most common in credit card fraud.
Many card holders are becoming the target for fraudsters, and this is an important concern for the bank security policies. Mostly this type of fraud is prevalent in online transactions hence the card holders need to be cautious while undertaking online transactions.
Credit card fraud can be due to theft of the physical card or stealing the card information like card account number or other data related to the card that is usually available to the merchant in a legitimate transaction. It can happen through many channels without letting the merchant or the cardholder or the issuer know about the operation until the fund is syphoned off. The exponential use of credit card has created security lapses in its database where multitude number of accounts is compromised.
In the case of a lost or stolen credit card, the cardholder has to immediately intimate the issuing bank where the bank blocks the account. Prompt reporting is encouraged by most of the banks with their free telephone numbers operational 24 hrs. Even then, it is possible to use the card for unauthorised purchases before it is cancelled. A thief can easily use hundreds of dollars of merchandise or services until the cardholder realises the fraud and reports to the bank.
The only way to ensure security is that on all the cards there is a signature panel but this also can be forged depending on the design. Some merchants insist on seeing a copy of the signature such as a driver’s license or passport to verify the identity of the user. In some cases the signature is on the card itself. The places where card frauds usually happen are kiosks, and self-serve payments systems where stolen cards cannot be verified. Also, these can happen in unsecured online transactions in internet cafes, etc. Sometimes when the credit card is swiped its magnetic strip can be recorded and many duplicates can be made from this stolen data. Hence, cardholders should be very careful while swiping the card and ask the merchant to swipe the card in front of you.