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Credit Card Fraud
 Apr 01, 2009


There are different types of credit card fraud. This article has information on lost and stolen credit cards, fake credit cards, credit card numbers, and fake identity. Keep reading to learn tips and tricks on protecting your credit and preventing credit card fraud.


The fastest growing crime in the United States is identity theft. And a major part of identity theft is credit card theft. Estimates from various consumer groups figure that credit card fraud costs about $500 million a year – not to mention the time and effort it takes to correct the problems that arise when your identity is stolen.

There are 4 main types of credit card fraud:

  1. Lost/stolen credit cards.
  2. Fake credit cards.
  3. Credit card number.
  4. Fake identity.

Each of the above methods of credit card fraud are different, and have varying degrees of incidence. It is important to be on your guard against credit card fraud, and to actively take measures to limit the chances that you will be a victim.

Lost or stolen credit cards

Having a card lost or stolen is the second most common form of credit card fraud. 30 percent of credit card frauds happen because the identity thief steals your card directly, or you lose and then the thief uses the card. 7 percent of the lost or stolen cards are actually taken when they are en route to you from the issuer – taken right out of the mail. However, the incidence of having cards stolen out of the mail is declining, since credit card issuers have activation policies now that are harder to fool. Keep your credit cards in a safe place at home; only carry one or two with you, and know the customer service phone numbers of those cards that you do carry.

Fake credit cards

These are credit cards that are manufactured with your credit card information. There are devices that allow thieves to “skim” your information from the magnetic strip on your credit card. When it is transmitted, the information can be “captured” and the identity thief can then make his or her own card with a magnetic stripe that matches yours. 37 percent of credit card frauds are perpetrated this way.

Credit card number

When an identity thief has your credit card number, he or she can place online orders without actually having your card present. This makes up about 10 percent of credit card fraud cases. You should be careful with your personal information in these cases. The credit card number can be obtained through phishing, fraudulent phone calls, or even spyware that tracks your keystrokes on the computer.

Fake identity credit card

This is happening less and less – about 4 percent of the time. In this scenario, the credit card fraudster uses your personal information to apply for a credit card – with a change of mailing address of course. Your billing address is used (or sometimes it isn’t), and the thief gets a credit card in your name; even though you aren’t using the card, it shows up on your account and can ruin your credit when the perpetrator stops making payments.

Preventing credit card fraud

One of the best ways to prevent credit card fraud is to be vigilant about who you give personal information to. Do not give people who call you your full credit card number. When your financial institution calls, be aware that workers will not ask for your full account number. They already have it. They should only ask for a few of the digits, or for some other identifying information. Also, never reveal your credit card number or other personal payment information in email or through online chatting.

Another thing you can do to limit your exposure to credit card fraud is to check you statements regularly. Make sure that the charges on your statement match your records. This means that you should use some method of keeping track of your purchases for comparison. Personal finance software or a spreadsheet can actually help you in this regard. You should also regularly check your credit report to make sure that new accounts have not been opened without your authorization.

Credit card fraud is a very real menace. And, chances are that you – or someone you know – will experience it. However, you can limit your exposure, and you can work to catch early so that damage is minimal.



Related Article: Lost or Stolen Credit Card? What To Do >>



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