Mortgages

Credit Card Fraud Explained

credit card Credit card companies face bills of over £1 million pounds each day due to credit card fraud. Criminals have become increasingly imaginative and it is quite usual for borrowers to discover strange payments made in places they've never even been to. If you notice any unrecognised transactions on your statement, or if your card is missing, report it to your card issuer immediately.The highly secure chip cards now being introduced in the UK will significantly reduce credit and debit card fraud.

If your card is lost, stolen or used fraudulently you are covered by the UK Banking code. All banks and credit card issuers abide by this voluntary code which in the main limits the liability of the cardholder if the victim of credit card fraud. Generally if your card is used BEFORE you advise your card issuer you are normally limited to pay an excess of £50, but iof you have been negligent by for example keeping your 4 digit pin close to your card and both are stolen then you will often be liable for all the costs.

There are different methods of credit card fraud and these are explained below.

credit card fraud

Type of Credit Card Fraud

Counterfeit Fraud

This has been the most popular type of credit card fraud. It involves what is known as skimming, where you are making a payment in a retail outlet or restaurent and unbeknown to you your card's magnetic strip is copied onto another machine. This information is then sold on to then make a duplicate card.

Card Not Present Fraud

In other cases, the details are obtained when card not present transactions take place and again these details that you have given over the telephone, fax or mail order transactions are sold on to make another duplicate card.

With the intoduction of the new secure Chip and pin cards these methods of skimming will be wiped out.

As mentioned, the term card not present occurs when transactions are made on the telephone, online, post or by fax. The cardholder is not present and this has led in the past to fraudulent use of someone elses credit card. Purchases are made by using information sold on to the fraudster or information taken from rubbish bins where disregarded slips have the credit card details listed, however most receipts produced now omit certain numbers to make this fraud more difficult and with the advent of many online and telephone retailers insisting also on the 3 digit security number on the reverse of the card this form of credit card theft has benn significantly reduced.

 

How to prevent being a victim of credit card fraud

For more useful information and help please use some of the useful links below.

Useful Links

Chip and Pin Information — Full information on the Chip and Pin system and how it works.

UK Banking Code — Information on the voluntary system that sets out to the banks and credit card issuers standards for good banking and lending practice and limits of liability to customers who are victims of credit card fraud.

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