Credit Card Fraud is a term covering any kind of fraudulent use of a credit card, where someone other than the cardholder uses the card illegally to obtain goods, services or cash.
There are two main ways in which it can take place. The physical card can be stolen and used; alternatively the information pertaining to the card can be stolen and used.
Of course, if your card is stolen, it is usually very obvious and can be reported straight away. However, if the information on your card is cloned or stolen in some way, this might not be obvious until you check a statement and realise that transactions have taken place that you did not make.
Your information can be stolen by a process known as Skimming, whereby an electronic device affixed to the machine which you use to pay for items in a shop 'skims' the information as the card is passed through.
Card Not Present Transactions
There are now many transactions made, largely online, for which you do not need to have the physical card. As a result, these transactions are highly sensitive to fraudulent usage. For this reason, fraud seems to be on the rise.
Attempts are being made to tighten up online security via so-called 3-D Security - this requires an extra level of verification, usually another password which operates like a PIN.
Shredding credit card statements, and taking extra care with your online banking security - always logging out etc. - are all highly recommended.
Credit card fraud is a wide-ranging term for theft and fraud committed using a credit card or any similar payment mechanism as a fraudulent source of funds in a transaction. The purpose may be to obtain goods without paying, or to obtain unauthorized funds from an account. Credit card fraud is also an adjunct to identity theft. According to the Federal Trade Commission, while identity theft had been holding steady for the last few years, it saw a 21 percent increase in 2008. However, credit card fraud, that crime which most people associate with ID theft, decreased as a percentage of all ID theft complaints for the sixth year in a row.