Credit Card Fraud: Definition, Types, Detection, and Prevention

Posted on Monday, July 22nd, 2024 | By IndusInd Bank

Credit card fraud is a serious issue that affects many people worldwide. But, what is credit card fraud?

It refers to the unauthorised use of a credit card for making purchases or accessing funds. This type of fraud can lead to heavy financial losses and damage one’s credit score.

Understanding the various types of credit card fraud, how to detect them, and preventive measures can help protect your financial well-being. Let’s learn more in this regard.

Types of Credit Card Fraud and How to Detect and Prevent Them

These are some of the common types of credit card fraud, along with tips on how you can detect and prevent them:

1. Card-Not-Present Fraud

Card-not-present (CNP) fraud occurs when someone uses the cardholder’s details to make online or phone purchases without a physical card.

Detection:

• Regularly check your account statements for unfamiliar transactions.
• Use your bank’s notification services to receive alerts for all transactions.

Prevention: 

• Only enter your card details on secure, reputable websites.
• Opt for multi-factor authentication to increase security.

2. Card-Present Fraud

This fraud happens when someone physically steals your credit card and uses it for unauthorised purchases.

Detection:

• Make sure your card is in your possession or stored in a safe place. 
• Keep an eye on your credit card statements or SMS alerts for any unauthorised charges.

Prevention:

• Inform your bank at the earliest if your card is lost or stolen. 
• Keep your cards secure and avoid carrying multiple cards at once.

3. Skimming

Skimming is one of the common credit card scams. It involves copying the information from a credit card’s magnetic strip using a small device known as a skimmer.

Detection:

• Look for any unusual devices attached to ATMs or point-of-sale terminals.
• Keep an eye on your transaction history for any unfamiliar activity.

Prevention:

• Stick to ATMs located in well-lit, secure areas.
• When entering your PIN, cover the keypad to prevent hidden cameras from capturing it.

4. Phishing

Phishing is one of the most common types of credit card fraud. It involves fraudsters sending fake emails or messages pretending to be from a legitimate financial institution. When the user clicks on a particular link or enters vital information, the fraudsters steal personal information.

Detection:

• Beware of emails that ask for sensitive information.
• Hover over suspicious links to know their details before clicking.

Prevention:

• Never share your credit card details via email or phone unless you initiate the contact.
• Install and update anti-phishing software to protect against phishing attempts.

5. Identity Theft

Identity theft occurs when someone uses your personal information to apply for a new credit card or make unauthorised purchases.

Detection:

• Regularly check your credit report for new accounts opened under your name.
• Set up alerts for any suspicious changes to your credit profile.

Prevention:

• Keep personal documents safe and shred any sensitive paperwork before discarding them.
• Use complex passwords and change them often for online accounts.

Knowing the meaning of various types of credit card fraud can help you be aware of and protect your finances.

Also Read: Credit Card Transaction Failed- Money Debited? Here’s What to Do

Conclusion

Monitor your credit card transactions and stay in touch with your bank authorities to detect and prevent credit card scams. Also, use legitimate, secure digital portals and POS terminals only. Being vigilant and proactive is not only advisable but also crucial! 

In addition to the above, make sure to choose a banking partner that offers credit card services with enhanced security. IndusInd Bank offers a range of Credit Cards with enhanced card security for worry-free transactions. So, you can claim rewards, travel privileges, complimentary experiences, and more while enjoying improved security! 

Apply for a Credit Card with IndusInd Bank today and experience peace of mind!

Apply Now.

Disclaimer:

The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.