Credit Card Fraud

What is Credit Card Fraud?

Credit card fraud is a type of financial fraud that involves unauthorized use of a credit card or credit card information to make purchases or access funds without the cardholder's permission.

How Credit Card Fraud Occurs?

1. Stolen Cards
   • Physical Theft: Stealing physical credit cards to make unauthorized purchases.
2. Skimming
   • Data Capture Devices: Using skimmers on ATMs or point-of-sale terminals to capture card information.
3. Phishing
   • Deceptive Tactics: Obtaining credit card details through phishing emails or fake websites.
4. Data Breaches
   • Compromised Data: Stealing credit card information during data breaches of retailers or financial institutions.
5. Online Scams
   • Fraudulent Websites: Creating fake websites to trick users into entering their credit card information.

What are the Impacts of Credit Card Fraud on Businesses?

1. Financial losses
   • Chargebacks: Financial losses from chargebacks and reimbursement to affected customers.
2. Increased Costs
   • Fraud Prevention: Higher costs associated with implementing fraud prevention and detection measures.
3. Customer Trust
   • Trust Issues: Erosion of customer trust due to security breaches and fraudulent activities.
4. Regulatory and Legal Consequences
   • Compliance Challenges: Potential fines and legal repercussions for failing to protect credit card information adequately.
5. Operational disruption
   • Support and Recovery: Increased burden on customer support to handle fraud cases and secure accounts.