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Credit Card Processing System Protection: 8 Sources of Credit Card Fraud

Trisha Echols Credit card fraud remains the major cause of merchants' loss. It harms business and takes away important revenues. It also sows distrust between merchants and customers. Whether the credit card transaction is done in a brick-and-mortar store or in an online shop, the end results always leave financial catastrophe. But exactly how and where does credit card fraud originate? In this article, I will show you the sources of credit card fraud. <ol><li>COMPUTER HACKERS These are individuals who try their best expertise to gain illegal entry into a merchant's website, browse sensitive data it contains, and then steal all the credit card information. They can then use these stolen or hacked credit card data to make online purchase for themselves or to make fake credit cards. </li><li>STORE EMPLOYEES Merchants hire employees to work for the store. These employees have various assignments and duties. Some work at the store front, others at deliveries, and some at the counter. A small number of these employees gets assigned in sensitive records section. Too often, these records contain names of customers, credit card numbers, etc. There are instances where  disgruntled, lowly paid employees in the records section need quick cash. They secretly copy credit cards' data and then sell these information. Sometimes, these trusted employees smuggle these credit card data so they can make their own fake credit cards and make extravagant purchases. </li><li>LOST/ STOLEN CREDIT CARDS Some cardholders can unwittingly lose their credit cards, or their credit cards were forcibly taken from them at gunpoint. These are common occurrences. Criminals can then use these lost or stolen credit cards to make fake ones or use the card themselves to make purchase transactions. </li><li>PHISHING Phishing is a clone copy of a legitimate website. It's purpose is to trick the cardholder into believing it IS the legitimate merchant's site. The cardholder then shops for items sold in the particular online site ( not knowing it is a fake website) and then gives his credit card information. The criminals behind the phishing sites then use your credit card data to make legitimate purchases for themselves. Sometimes, they would use your card information to make fake credit cards out of it. </li><li>CARD / BANK COMPANY EMPLOYEES Banks and credit card processing companies also have employees who fill up sensitive positions--- like storing and processing credit card information. Some crooked employees can will secretly copy these information and sell them to fake credit card syndicate in exchange for a hefty sum of money. </li><li>CARDHOLDER A card holder makes a purchase transaction with his/her credit card. Upon delivery of the goods, he/she would file a dispute in the transaction. He/she can claim the items were not in good condition. Sometimes, the card holder would claim he/she did not receive the goods at all when in reality the items were promptly delivered and he/she received it herself. In this fraudulent claim, she can have the purchased item without paying for it. </li><li>COMPUTER SOFTWARE Some enterprising software developers come up with number generators program. This software can generate card numbers. The culprit will then “test buy” a generated number to determine if it is a “ live “ one. If the test transaction pushes through, then these criminals will make a fake credit cards out of this number and then use to make additional legitimate transactions. </li><li>IDENTITY THEFT You are looking for a job. You submit your resume online. After a few days, you receive a phone call or an email from “ prospective employers” who are actually impostors, asking you to provide your card numbers for verification. Without thinking, you gladly supply these “imposters” the information they want. They can then use these credit card data to assume your identity and make extravagant purchases. </li><li>SKIMMING You are on a dinner date. You hand over your Visa Mastercard to the waiter or waitress. Without your knowing it, the waiter is a disgruntled employee and secretly swipes your card on his own PDA device equipped with a card reader. Now, his PDA contains your credit card data which he can use to make fake credit cards for himself or for his cohorts. He can also sell your card information to “ criminal credit card ring” involved in the manufacture of fake credit cards. </li></ol> Trisha Echols currently is a long-time financial consultant with established consultancy offices in Amsterdam, Halifax, Malaysia and other key cities. Her clients belong to the top 500 companies in England and in the United States. She does lectures on strategic business practices and also writes for various magazines on business matters. <a href="http://www.onlywire.com/submit?u=http://www.creditcardprocessingexperts.com/credit_card_processing_protection_8_sources_of_credit_card_frauds.html;t=credit%20card%20processing;tags=Credit%20card%20processing" target="_blank" title="Add this Article to Onlywire"><img src="http://www.onlywire.com/i/onlywire.ico" alt="" />Add to Onlywire!</a>

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