5 Different Kinds of Credit Card Fraud

Credit Card Security Concept

Credit card fraud is an all encompassing term for a form of theft and/or fraud that may be perpetrated though the illegal use of a credit card, in order to purchase goods or services as a fraudulent source of finance in a monetary transaction The purpose may be to either acquire anything without paying for it or alternately to gain access to funds in an account that the individual has no legal right to operate.

There are many broad categories of credit card fraud, these include:

Credit Card theft

Having a card stolen can be a traumatic experience and it becomes even more so if you find yourself being billed for products that you never purchased. Unfortunately, credit card theft is a pretty common phenomenon and it is imperative that a lost card should be reported and blocked ‘as soon as possible’ to avert such losses.

On the plus side though, it is not as easy for prospective thieves to actually steal credit cards and buy stuff with them. This is because more and more merchants now ask for at least some form of identification when they are being paid though credit cards.  Additionally many credit card facility providing financial institutions also add a photograph of the owner’s face to the card’s front side as a security measure. While these may not be fool proof measures but they have helped mitigate losses resulting from credit card theft to an extent.

Account takeover

An account can be said to be ‘taken over’ when a fraudster manages to acquire the personal information of a credit card holder (such as mother’s maiden name, date of birth, home address and other personal information).  The prospective swindler then approaches the cardholder’s bank all the while pretending to be the original card holder, he informs them that he has lost his card and has also shifted his address.  Once the card is delivered to him in the name of the original owner, he may be able to steal at will till the original card holder finds out what is happening and has the card blocked.


This is by far the most common method of credit card fraud. Skimming works by putting a legitimate card in a machine that looks just like an actual credit card reader. But in reality the machine, unlike a conventional card reader saves all the details of the card. These details are then extracted and computer hackers may use them to make unsecure transactions or even create new cards from them altogether.

”Borrowing” the card

When you hand over your card to a gas station attendant or a waiter in a restaurant when making a payment, he has the opportunity to note down your card number as well as other details. These can then be used to make unauthorized online transactions in your name.


This is also another well known form of credit card fraud. Instead of stealing or ‘borrowing,’ the fraudster deceives his victims into disclosing their credit card details.  He may call them pretending to be a bank officer or send them emails promising them winnings in a lottery ticket. Some net savvy swindlers have even been known to create websites identical to original bank sites. Once the data is entered, the thieves go to work immediately transferring either funds or buying expensive products online.


Irrespective of the method used, using a credit card without due authorization is considered stealing in Canada and as such is considered a criminal offence in the eyes of the law.


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