Credit card fraud
Anyone who has your credit card information or other relevant payment information (e.g., access to PayPal) and billing address can commit credit card fraud. Unfortunately, it’s one of the more common scams out there.
Credit card fraud simplified
A simple way to fall victim to credit card fraud is by buying something through a fake website. You input your name, credit card information, billing address, press “buy,” and all of this data travels to some cybercriminal’s database. They can then use this information to buy things online at your expense. However, that’s just a single example of credit card fraud and there are many other ways someone can use your information to scam you.
Types of credit card fraud
CNP (Card Not Present) fraud
If someone knows your full name, credit card’s account number, card verification number, and expiration date, they can use it to shop online or make other payments without having the card. Luckily, vendors can’t store your card’s verification code (the three-digit number on the back), so it’s unlikely to leak during a data breach. However, this also means that you should be extra careful to protect your verification code!
Application fraud
When someone tries to apply for credit or a new credit card in your name, it’s called application fraud. This type of fraud usually goes in tandem with identity theft. Banks take measures to prevent this, but scammers can use your personal information to fake proof that they’re you. If this happens, you might start receiving statements saying that you owe money to the bank.
Counterfeit card fraud
Counterfeit card fraud is an advanced technique when fraudsters duplicate your card. There are two ways to do this - skimming (copying your card’s information directly) or getting your card’s information through leaks and breaches. The duplicate might not work perfectly, but it’s often enough to convince vendors that there’s something wrong with the card. In this case, they can complete the transaction by hand using the credit card’s information.
Account takeover
Account takeover is similar to application fraud. A scammer might use your personal information to contact the bank and pretend they’re you. They will ask the bank to change the address on your credit card and to send a replacement to the fake address. Once they have the new card, they can use it as they wish.
Tips to prevent credit card fraud
Do your research
Ensure you’re purchasing from a reputable source by looking up the vendor online and on other websites. When was the business established? Where? By whom? Who is their statutory agent? And so on.
Don’t share your information
Never comply with requests to provide your credit card information via email, text, or call. Authorities legitimately concerned with these things will never ask for you such information.
Check if the site is secure
Before buying from any site, make sure it’s encrypted and uses the HTTPS protocol. Websites using HTTP protocols are unsafe and usually indicate a scam or a malicious site.
Use chip cards
Avoid paying on old, dated card readers or by using magnetic stripe swipe. Instead, use an EMV chip reader and PIN code. This reduces the risk of falling victim to counterfeit card fraud.
Credit card fraud stats
According to the FBI Internet Crime Reports, here's how devastating credit card scams were from 2015 to 2022:
Average losses and victim count
year over year
Credit card fraud cases have reached record numbers with 23K yearly victims (around 63 victims per day) in 2022.
Victims have reported the highest average financial loss to credit card scams in 2022 ($11.5K per victim).
During the 2020 COVID-19 pandemic, the number of credit card fraud cases grew by 23%, but the average financial loss fell by 5% (from $7.8K to $7.4K) per victim compared to 2019.
Despite the increasing awareness of online crimes, daily financial losses to tech support scams have grown around one hundred three times from 2016 ($21.4K per day) to 2022 ($2.2M per day).
