These Are The Most Common Types of Credit Fraud

Types of Credit Card Fraud

One of the biggest loss problems in banks is credit card fraud. Usually, these are performed by a group of individuals that use counterfeit credit cards when cheating unsuspecting merchants or in collaboration with the merchants when cheating the banks. These criminals are referred to as fraud syndicates.

There are numerous types of credit card fraud that were identified by several banks. To fight frauds, they are classified into different categories by their natures and these include the following:

Counterfeit Cards


Transactions from counterfeit credit cards are one of the largest fraud issues in the industry. It makes up over forty percent of all money lost because of credit card frauds. Syndicates utilized different methods to acquire information to make counterfeit cards. The created illegal counterfeit cards will have every information of the real credit cards in their magnetic stripes. Card skimming is one of the renowned methods wherein information contained on the magnetic stripes of the cards recorded into the chips illegally installed into the EDC machines or by wire-tapping technology.

Lost or Stolen Cards

stolen credit cards

Stolen and lost cards are the common types of credit card fraud. This kind of fraud is in essence the simplest way for criminals to get hold of the credit cards of anybody without investing in technology. It’s also perhaps the most difficult form of credit card fraud. It is because there’s no absolute solution to this issue. The perfect way to get rid of this is by preventing cards being stolen or lost in the first place. Customers should be educated on how to take good care of their cards. But, getting cardholders to treat their card with respect is not a simple task. This is an issue that was also identified by many governments of various nations.

Fake and Doctored Cardsfake credit cards

Another traditional form of credit card fraud is the creation of doctored and fake cards. Whether it be creating fake cards from scratch or altering the existing cards to show various details, fraudsters are constantly searching for more and new innovative ways to make doctored or fake cards.

The simplest way fraudsters can go about tampering with existing cards that they have acquired is to delete the metallic strips with the powerful electro-magnet. They can also tamper the details on the card so they could match the details of the valid card, which they obtained through stealing. When fraudsters use the card, cashiers will swipe cards through the terminal for a few times before realizing that the metallic strips don’t work. Then, the cashiers will proceed to input the card manually into the terminal. This kind of credit card fraud is highly risky as the cashier will be searching at the cards closely to read numbers. But today, doctored cards are considered outdated.

Fake cards are also becoming an outdated type of credit card fraud because many criminals use modern techniques. Yet, there are still some people who consider this kind of fraud, especially those who are just starting to look for credit card fraud victims.  To know what’s going on with your credit reports, monitor your credit regularly and keep a close eye on your credit car statements for unauthorized activity.