credit card fraud

Credit Card Fraud

ContentsWhat is Credit Card Fraud ?

-Slide 3Credit Card

-Slide 4Fraud

-Slide 5 Credit Card Fraud

-Slide 6Implications of Credit Card Fraud -

Slide 8Misuse of Information

-Slide 13Advantages and Disasvantages -

Slide 15Advantages of Credit Cards

-Slide 16Disadvantages of Credit Cards

-Slide 20Advantages of Credit Card Fraud -

Slide 22Disadvantages of Credit Card Fraud -

Slide 25Types of Credit Card Fraud

-Slide 28Where does Credit Card Fraud happen -Slide

41Strategies to Overcome Fraud

-Slide 53By Financial Insitutions

-Slide 63Bibliography

-Slide 64Participation Sheet

-Slide 65

What is Credit Card Fraud ?

What is a Credit Card ?

A plastic card issued by a Bank or Business for the purchase of goods on credit.

Credit cards are the most often used electronic payment instrument.

What is Fraud ?

Fraud is intentionally deceiving someone resulting in financial injury to to that person.


A form of IDENTITY THEFT, that involves the misuse of a person's credit card information or the use of a

counterfeit card.


Persons use the information for the purpose of charging purchases to the account or removing funds from it.

Implications of Credit Card Fraud

The Implications of Credit Card Fraud

Increased Debt payable by the victim


Inability to get loans and financial assistance due to bad credit, especially in countries like America.


Persons can be imprisoned due to their inability to pay their “creditors” obtained due to credit card

fraud


Banks, too, lose Money. After they've allowed a Million dollar limit on a

credit card, and that limit is reached, and they're not able to recieve payment from the Credit Card

signatory, then they have to be written off as a bad debt, which is an expense to the card

company.

Misuse of Information

Misuse of Information

With credit card fraud, information is taken from the victim and used by the fraudster without

authorization from the victim.

Advantages and Disadvantages ofCredit cards and Credit card Fraud

Advantages of Credit Cards

Quick way to BorrowIf you need to buy something expensive and you can’t afford to pay for all at once, a credit card is ideal. If you don’t have the cash at hand or even in your bank account you can pay with a credit card and then spread the cost over a number of

months.Credit cards are also an easy and secure way to pay for internet shopping. Plus, they are widely

accepted around the world.


Consumer Protection You get more protection if you pay with a credit card than if you pay with a debit card,

cash or cheque. In other words, if the company goes bust, or your purchase is faulty or doesn’t turn up, you won’t lose out because

you can claim the money back from your credit card provider.


Card-Use Incentives

Some credit cards offer 0% periods meaning you can effectively benefit from an interest-free loan. You need to clear your balance before the 0% offer ends though otherwise you’ll be charged interest. The average interest rate is 18% - that’s quite high which is why you should pay your debt off before interest kicks in.


Card-Use Incentives Some cards even offer incentives to spend,

such as cashback, loyalty points or Air miles, which means you could actually make money from your credit card. These are only worthwhile if you pay your bill in full otherwise the interest you’ll be charged will be more than the value of the rewards.

Disadvantage of Credit CardsBlowing your Budget

– The biggest disadvantage of credit cards is that they encourage people to spend money that they don't have. Most credit cards do not require you to pay off your balance each month, so even if you only have $100, you may be able to spend up to $500 or $1,000 on your credit card. While this may seem like 'free money' at the time, you will have to pay it off and the longer you wait, the more money you will owe since credit card companies charge you interest each month on the money you have borrowed.

Disadvantages of Credit cards

High Interest Rates and Increased Debt Credit card companies charge you an

enormous amount of interest on each balance that you don't pay off at the end of each month. This is how they make their money and this is how most people in the World get into debt. . A good way to look at this is in comparison to what you would earn in interest from a bank or owe in interest to a bank loan: Savings accounts may pay you around 2% interest; if you have a loan from a bank you may pay them around 10% interest; if you owe money to a credit card company, you may pay them around 20% interest.

Advantages of Credit Card Fraud

Revenue for the FraudsterThe Fraudster, with his new source of income will

have sufficient revenue to enjoy his day to day life, that may be better than most. As well as,

finance bigger schemes.


Relief of DebtPersons who are heavily indebted might go to “Credit Doctors”, where they can obtain stolen

credit cards they use to pay off their debts.


Exploitation of IntelligenceThe persons investing their time in Credit Card Frauding Schemes are usually those who are highly intelligent. This frauding medium gives them an oppurtunity to build on their skills and

develop it to perfection.

Disadvantages of Credit Card Fraud

Accrued fees are payable by the victimThe fees it takes to investigate your fraud, along

with the fee for losing the card are payable by you to the bank.


IndebtednessA victim becomes heavily indebted, sometimes

bankrupt because of credit card fraud.


Bad Credit ScoreVictims, unable to pay their debt will, as a penalty,

see an increase in their credit score. This will result in them not being able to get loans etc..

Types of Credit Card Fraud


Online Credit Card FraudThe lack of interaction, over the Internet provides

fraudsters with anonymity, so they've become more daring. They have even gone to the lengths

of posting stolen credit card numbers online, making it accessible to anyone.


Misuse by Family MembersFamily members sometimes use a victim's credit

card, without permission. They are also sometimes sold to thieves.


Organized Crime RingsNigerian crime rings are most popular for acts of Credit Card Fraud. They steal Bank and Credit

Card information from the mail and then use it to create fraudelent identification cards, drivers

licences and ..Credit Cards


Advance PaymentsConsumer regulations request that a person's

account is immediately credited, even before the cheque has cleared.

Using counterfeit cheques, an advance may be made on a Card's account before their is time to

verify the authenticity of the cheque.


Stolen Card NumbersNumbers may be stolen using “Shave and Paste”.Old card numbers are removed, and the numbers

of the victim's card placed on this card.


Stolen Card Numbers“Counterfeit Cards” this is normally done in

conjuction with an employee. Basic white plastic cards, are designed and decorated with a victim's card info and then te fraudster goes in the store and uses it with the employee like an average

credit card.


Telephone/ Mail Order Fraud/ Lotto ScamFraudsters will offer a Free Trip, or a significant some of money that the victim has won. Before,

however, the victim can collect on their prize, they must first pay a “handling” fee. The victim will give the fraudster their credit card number and then the

fraudster charges purchases to the victim's account.


Telephone/ Mail Order Fraud/ Lotto ScamAlso, fraudsters may select a random person from

the phonebook and then pretend to be a representative fm a popular car company. They will report to the victim that their card has been obtained by criminals. They are then asked to read their credit card number for verification.Many persons fall for this scheme, Will You ?


Mail TheftVictim's may apply for a new credit card from the book, and request that it is sent via mail. It may then be obtained for use by those that check the mail at the post office. If it does pass this byway safely, it may then be obtained by criminals who check people's mail boxes for such documents.

Like the Nigerians.


Credit “Doctors”Persons with bad credit that can't obtain a proper credit card from the proper Financial Institutions

often go to “Credit Doctors” to obtain stolen credit cards. Though some patients of these Doctors are ignorant of how they obtained these cards, most

are knowledgable of the situation.


Account TakeoverThe fraudster may pretend to be the owner of the

card, and request a change of Address. They may report the card lost or stolen and ask that the new card be sent to the new address.

They will then use it to make purchases, while the amount is still being charged monthly to the

victim's account.


Other Forms of Credit Card Fraud False ApplicationsTrue Name FraudNon – Receipt FraudCreditmasterProbingSkimmingPre – text calling

Where does credit card fraud happen often ?

Where does Credit Card Fraud happen ?

Supermarkets(Pricemart, Megamart, Brooklyn)


Medical Institutions(Pharmacies & Hospitals)


Shopping Centres (Azan, Bashco, Woolworth)


Clothing Stores(Lees, Shhh, Ammars)


Fast Food Franchises & Restaurants(KFC, Burger King, Golden Bowl)


Hotels & Guest Houses(Iberostar, Rio, South Beach)


Banks(Scotia, RBC, NBC)


High Scale Bars & Cafes(V-bar, Cafe Blue)


The Internet(Craigslist, ebay, amazon, omegle)


Your Back Pocket.


Persons can be victimised by simply having their credit card in their back pocket, where it can be

scanned and its information read.

Strategies to overcome Credit Card Fraud


PrivacyInstituting, in public areas, private spaces where

one can safely carry out a transaction using credit cards


Magnetic WalletsPersons can invest in magnetic wallets that

prevent the scanning of credit card information by blocking the signal.


Proper IdentificationProper Identification of persons can help in the

reduction of credit card fraud. This will reduce the possibility of persons who dont own the credit

card using the credit card


Adequate SurveillanceConstant monitoring or surveillance of places

where credit card card fraud occurs most often. So if fraud were to occur, the suspect could easily

be caught.


Computer Security Websites


Prevention.Truthfully, if people were more responsible and

careful with how they handle their credit card and their credit card information, it would be harder for

fraudsters to obtain information.


Education.Tellers could be properly educated on how to recognize a legitimate credit card, and be to

identify all the security features of a legimitate credit card. The chances that a fraudulent card would contain all these security features is very

rare.


Financial Institutions developing relationships with Law Enforcement.

If there are proper relationships established between these Financial Institutions and Law Enforcers, with their is evidence of credit card

fraud present, it may be easily and quickly dealt with.

Strategies to overcome Credit Card Fraud by the Financial Institutions

New Account ScreeningEnsure that Institution's employees thoroughly check and ensure that information is accurate.


PIN ActivationCredit Card Holders are normally required to

provide their PIN if they chose to activate their credit cards over their phone. If they fail to provide this PIN, they cannnot activate their card over the

phone.


Smart CardsInstead of using holograms, smart cards use

microprocessor memory chip. This means that unless the signatory is holding the card, in can't

be used. It also works with a PIN. Purchases cannot be made without entering this PIN.

Bibliography.

<http://money.howstuffworks.com/identity-theft1.htlm><http://www.law.cornell.edu/wex/credit_card_fraud>“CREDIT CARD FRAUD” Lăcrămioara BALAN, Mihai POPESCU

University of Suceava, Romania

http://money.howstuffworks.com/identity-theft1.htlm

http://www.law.cornell.edu/wex/credit_card_fraud

Participation.

Evans, Shamoya - 100%Hall, Jody - 100%Moncrieffe, Harrington - 100%Multan, Tajwain - 100%

- 410%

credit card fraud

Economy & Finance

credit card company

credit card signatory

credit card provider

credit card fraudslide

bad credit

credit doctors

stolen credit cards

plastic card