Myths and Truths about credit card fraud (Credit Card Fraud)

Name: DarkestGrey

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Product:	Credit Card Fraud
Date:	06/09/08 (54 review reads)
Rating:

Advantages: Can't think of any. But if I do, I'll let you know!

Disadvantages: Everything. Shops get charged, Card users get stress, Card companies make money from it

Credit card fraud, myths and truths.

If credit card fraud happens to you, it can be a nasty shock, almost a violation of your rights. The hassle to sort this mess out is now really up to you and can be stressful.

MYTH 1 - The internet is dangerous - Don't use your card on there.

This is actually not true. In fact, it is known to be one of the safest methods out there. The truth is that most stolen card details are taken from normal places, such as bad theft or card skimming or photographing.

Then, these criminals use the card on the internet because if the shop realises it is a stolen card, you can't apprehend the thief. This is where the internet gets a bad name.

I run my own little business and I had some customers a couple of days ago. One paid through the internet, through a payment provider run by one of the big banks. I never see the credit card number, I just get an authorisation number.

Another customer sent a fax because he didn't trust the internet. Now I have his card number, he has to trust that I don't misuse it and that I dispose of the details correctly and even then, I still place the order on the internet through an 'online terminal' that the bank provide.

Everytime you use your card it goes through the internet or the telephone at some point.

MYTH 2 - When card fraud happens to you, the card company protect you and give you the money back

Again, this is not always true. In fact, the card companies often profit from this because the card company does not cover the payment, the seller does. The payment is taken back off the seller and given back to the cardholder. The shop is also charged fee (usually around £10 per transaction). So if your card has been used in 10 different places, they stand to take around £100. If you think the card companies cover this, think again - they charge you for everything, but they also charge the shop for everything as well.

Protecting your card

There are various ways of protecting your card. Make sure that you don't lend your card to anyone which sounds obvious but is a simple mistake.

Always check that the cashier hands back the card with your name on. Some are known to switch an old or blocked card with your card with sleight of hand. If you hand over a blue Natwest card and you are given one back, check it doesn't say 'Mr Smith' on there (unless you are Mr Smith of course!). A quick yet simple check.

Shred any documents with your card number on. Yes, this includes statements. The credit card companies are stupid enough to print your card number on here. In fact, I used to recommend MBNA since they printed a short account number instead, but they no longer do this and print your full card number.

Report lost cards straight away. Each card has a freephone number on the back. Write these down somewhere since they are not much use if they are stolen.

Of course, always check your statements. Silly things may crop up, such as Morrisons, when you know you always shop at Asda.

You may have your details used and still have your card in your posession.

Many people have asked me how this happens.

One way is some people write software to hammer away using card numbers on a payment provider until one goes through. They can then use these details. So it doesn't matter what you do, you are never 100% safe. This may sound unrealistic, because there are 16 digits on a card. Well the first 6 digits tell you the issuing bank and the last digit is a 'check digit' - this last one is a mathematical calculation from the first 15, this is why your transactions are rejected so quickly if you type in two digits the wrong way around. Anyway, if the fraudster wants to target a particular Barclaycard (perhaps one known for a high credit limit), they only have to guess 9 numbers. And there might be 100,000 of those cards out there. It won't take very long for software to get some of those card numbers.

So what do the criminals get out of this? They buy items they can sell on (bearing in mind they never pay for them, they can sell them cheap). So they might sell laptops to an African computer dealer as an example. Or they may even end up on eBay.

It is all about minimising risk, nothing is ever perfect.

Summary: Minimise your risk.