Initiative to prevent credit card fraud
Fraudulent credit card activity has always been a concern for businesses, and there is even a greater risk of fraud for mail order/telephone order (MOTO) and e-commerce merchants. Whether you are in a card-present or a card-not-present (CNP) environment, there are many steps you can take to decrease your chances of fraudulent activity.
Consumers using their credit cards at cash machines are also vulnerable to fraud. Some of the advice that Card Watch will inform you about are to be aware who is behind you when you are entering your PIN. Criminals will watch you enter your PIN and then pickpocket your card enabling them to withdraw cash before you notice your card missing; also, copying your details from the magnetic strip on your card at a cash machine is proving popular.
Card fraud is in the news on a daily basis. On a positive note, Chip and PIN is having a marked effect in reducing fraud perpetrated in shops. Sadly this fraud is already migrating to CNP channels such as call centres and the Internet.When fraudsters are successful, they obtain goods without paying and retailers suffer the loss. They use another persons’ details and this other person will blame the retailer when the transactions appear on their bank statement. They fund activity such as drug abuse and terrorism, which fuels further attempted
A credit card bears the symbol of a company that controls and regulates credit cards. A bank that is required to meet the standards set by the credit card company issues the card itself. The credit card company is non-profit making, and raises funds from charges to the bank. These charges include fines for malpractice. When a customer incurs a loss due to fraud, the credit card company underwrites it, but reclaims the money from the issuing bank.
“Some retailers do not follow safe credit card use principles as closely as they should. An authorisation is not a guarantee that the cardholder has legitimate use of the card. It merely confirms that the order of the credit card numbers are correct, there are funds in the account and there are no stops on the card. Fraudulent signatures can also be a problem. Retailers need to ensure they check every signature.”
Banks, building societies and card schemes are continuing to develop intelligent detection systems which can identify fraudulent transactions before a card’s theft or misuse is reported. The majority of card issuers already use intelligent computer systems and have had considerable success in identifying spending patterns, which differ from the cardholder’s normal routine.
