Are Credit Cards Safe?

One can hear many stories about credit card fraud. These frauds can be explained as illegal use of credit card information from a customer for buying goods or services.
There are different types of fraud that include stealing credit cards, compromising accounts, mail or internet order fraud, account takeover, phishing, carding and skimming. We are going to discuss some of the common frauds that have started happening with the advent of the Internet.
Mail or Internet Order Fraud:
This type of fraud occurs with online merchants or traders who sell products or services through websites. In the case of online transactions, merchants do not have the facility to inspect the details on the card physically, a situation known as CNP or “Card Not Present”. In order to obtain the credit card details, the cardholder is contacted by mail, telephone or through a transaction gateway. There is no way of verifying the identity of the customer in the case of an online transaction except for the security verification code or CVV number present on the back of the card. Anyone can do an online transaction if the credit card details are present. These details include the name of the card holder, expiry date on the card, credit card number and CVV number. This is the most significant disadvantage of doing an online transaction, an aspect that fraudsters can use for their own advantage. Shipping companies can only guarantee prompt delivery of items to the suggested location. However, they do not have the authority to verify the identity of the cardholder.
Account Takeover:
This is another mode of credit card fraud. There are two different types of account takeovers. In one situation, false or counterfeit documents were created and used to open an account on someone else’s name. Sometimes, documents of a customer are stolen and used to create an account in another bank in the name of the customer.
In another type of account takeover, the customer’s personal and valuable information is gathered by the scamster. Here, the scamster contacts the bank over a telephone and identifies himself as the genuine cardholder before the card issuing bank. Then a request is placed with the bank to change the address of the communication. Using this changed address, the criminal reports a card theft or a card loss and asks for a replacement of the same. The new card is then sent to the changed address and is then used fraudulently.
This said, if you follow all the safety procedures instructed by your credit card company, use of credit card any where can be relatively safe. Make sure you educate yourself well or else you can become a victim of credit card fraud.

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