Types of Card Fraud
Stealing the actual card. This type of card fraud involves a physical theft of the card either from the victim’s pocket, purse or other location and its use for unauthorised transactions. Fortunately, most retailers in Europe require a four digit PIN to be entered before authorising the purchase which, however, doesn’t count for online purchases. As a result, physically stolen cards can be very expensive, especially if the victim doesn’t notice or report that their card has been stolen for a few days.
Skimming. This type of card fraud involves electronic copying of the data from the card which are then used for making counterfeit cards. Skimming occurs at perfectly legitimate transactions such as paying for goods or service at retails such as restaurants where an unscrupulous employee puts the card into an electronic device to copy and save the key information but it can also occur at cash machines that have been fitted with tiny skimming devices. Victims of this type of card fraud are usually unaware of the problem until they receive their bank statement showing transactions they didn’t make.
Card not present. It refers to a card fraud in which the criminal obtains information without the actual card, most often through discarded receipts, bank statements and other documents containing card details. The information is then used for purchases that don’t require possession of the card physically - via online, telephone or mail. Just like skimming frauds, card not present transactions most often remain undetected until the victim is charged for purchases they didn’t make.
Identity theft involving cards. This type of card fraud occurs when the criminal uses the victim’s personal information (which are obtained fraudulently) to gain access to card account or open an account in the victim’s name. Identity theft involving cards can be:
Application fraud. A criminal may use information obtained from stolen or discarded documents (e.g. bank statements, utility bills) to open an account in the victim’s name. They either pretend to be the victim or use counterfeit documents.
Account-take over. Fraudulently obtained personal information can also be used by the criminal to deceive the card company or bank to be the victim and take over the victim’s account with a purpose to carry out transactions from the account. They may also ask the bank to change account details, issue new cards, etc.