Credit Card Fraud

1
Credit Card Fraud

• By John Atkinson

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What is it?

• theft and fraud using a credit or similar payment
  mechanism as a fraudulent source or funds in a
  transaction.
• purpose being to obtain goods without paying or
  obtain unauthorized funds.

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Types of Credit Card Fraud

• Stolen cards
• Compromised accounts
• Mail/Telephone/Internet order
• Account takeover
• Skimming
• Carding

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Additional Types of Fraud

• Nigerian Fraud Ring
• Phishing
• Spamming
• Viruses

5
Addition Types of Fraud

• Internal fraud
• Millions of customer service reps needed
• Have access to all card member information
• Ssn
• Mothers maiden name/password
• Pin number

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Unique Fraud Types

• Credit Card Number Generator

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Unconventional Fraudsters

• False fraud claims
• Manipulating reward points
• Using air mileage card for business
• Manipulating information on credit card
  application
• People writing the code for the credit card
  number generator

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Whos Affected?

• The card holder
• Contact the credit card company
• Fill out an affidavit
• Wait for new card and new account
• Check 3 main credit bureaus

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Whos Affected?

• The credit card companies
• Can lose thousands of dollars on a single
  fraudulent transaction
• Millions of fraudulent transactions daily.
• Extra expenses for fraud prevention

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Whos Affected?

• Everyone
• Higher interest rates
• Harder to get approved for card

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The Victims

• Contact the credit card company
• Fill out an affidavit
• Wait for new card and new account
• Check 3 main credit bureaus

12
CC Companies Take Action

• Blocking cards due to suspicious activity
• Sending letters/emails/phone calls regarding
  activity
• Card activation from home phone
• CVV verification

13
Merchants Take Action

• Ship to billing address only
• Checking id and signature for pos
• Name and address verification with bank

14
Merchants Take Action

• rejecting approximately 4 percent of their online
  orders
• manually reviewing up to a third of all online
  orders
• ultimately approving 85 percent of the orders
  reviewed
• very costly and inefficient process with serious
  restraints on scalability.

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The Criminals

• Usually go unpunished
• Secret service has limit of 150,000 before
  investigating
• Police just file a report
• Credit card companies focus on retrieving funds
  from the merchant and keeping the customers happy

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Fraud Justified

• Credit card fraud victims are not held
  responsible anyway
• Its not as bad as robbing a store
• Im only hurting the credit companies who are
  rich anyways