Cloning and other fraud with credit cards

The crimes that are committed with credit cards are very diverse, there are the most traditional ones that involve state-of-the-art technology and are very sophisticated. The methods vary according to the objective they pursue, sometimes criminals seek cash from accounts and sometimes buy goods to resell. In any case, this crime is closely linked to identity theft.

Credit card fraud represents a great financial loss. In 2018 alone, more than 5 million fraudulent transactions were made, the amount exceeding 13 billion dollars. What is more worrying is that year after year these figures are increasing. However, it is positive to know that there are now more sophisticated methods to detect fraud and stop it. Unfortunately, the real amount in losses is still billions.

It is important that we know the different methods that criminals use to carry out frauds, as they evolve, and more with technology, which at the same time that makes life easier, exposes us to cyber pirates, whose skills increase day by day and They make it harder for users to protect themselves. Here are some different ways in which credit card fraud is committed, I hope this helps cardholders to avoid fraud.


1. Application fraud

1. Application fraud

This type of crime is executed together with the crime of identity theft. It occurs when other people apply for a credit or a new credit card in the name of another person. You may have stolen documents, which are then used to make the fraudulent request for the card. Although the banks have implemented several protection measures to prevent this type of fraud from happening, there are skilled or colluded people to circumvent the security measures implemented by the banking institutions and commit the crime.

Some banks only process applications with original documentation. In addition, they usually make calls to confirm the identity of the client and know if he was informed and agrees with the conditions of the credit he is acquiring. Unfortunately, this is not enough, since criminals frequently falsify documents and provide phone numbers that answer people who are involved in the crime. Take good care of who you share your personal information with.


2. Electronic or manual impressions of credit cards

credit cards

Credit card impressions are another form of credit card fraud. This means that someone extracts information that is placed on the magnetic stripe of the card. This is used to code a fake card or to complete fraudulent transactions. Special devices are needed to make this type of fraud, but they are very small devices that can be purchased on the internet and that do that job in seconds. The recommendation to avoid this type of fraud is to keep track of your credit card.


3. Card fraud not present

Card fraud

This is probably the simplest fraud and therefore the most common. It consists of taking the card data, that is, the 16 digits, the expiration date and the verifying digits. With this information the offender can make purchases by phone, mail or internet and upload them to your card. In other words, it means that someone uses your card without actually being in physical possession of it.

Although banks have developed a mechanism that involves artificial intelligence to detect purchases that leave the user’s behavior pattern, these mechanisms are not infallible. In addition, criminals make purchases of small amounts to circumvent these mechanisms. Some banks offer the service of alerts to the cell phone, that is, every time the card is used, an SMS message arrives to the user’s phone to inform them, these types of alerts can be very effective to avoid this type of fraud.


4. Counterfeit card fraud

credit fraud

This is a hybrid between high-tech fraud and card fraud not present. In this case, the offender has your credit card information, the 16 digits, the expiration date and the verifying digits. Then the perpetrator presents a card with a false magnetic stripe that, like the chip, in other words, does not really work. This is to convince the merchant that his card has a problem and that he must make the transaction manually, that is, enter the card details in the terminal.


5. Lost and stolen card fraud

5. Lost and stolen card fraud

If your wallet is stolen and your credit card was there, or you lost it, it is likely that someone will try to use it. It is difficult for them to want to have cash, because to access an ATM they require a personal identification number (PIN). But they can go to a store and try to pay with your card. Some shops ask for identification, especially when purchases are for a large amount, but it is not always the case. They can also shop online. For this reason it is very important that you report to the bank the loss or theft of your cards, to prevent them from misusing your plastic.


7. Card fraud not received

7. Card fraud not received

Banks send credit cards, either new or replacement, to their customers through the Mexican postal service, but it is usually very time consuming, so they have been forced to hire external services that are not always reliable . Some distributors when they detect that the package they will deliver is a credit card, they decide to keep it. Then they activate it and use your name to make purchases.

If you asked for a card or it is about to expire, stay tuned for the card to arrive at your address, if not, contact the bank as soon as possible to avoid fraud.


8. Assumed identity

credit loan

This type of fraud is committed against the bank directly, that is, no client is used as an intermediary. What criminals usually do is obtain false documentation and a temporary address to request different credits, among which are the cards and not pay. There are several systems to avoid this type of fraud. For example, new customers will be asked to provide account references and it will be verified if they are authentic.

In case the applicant is too suspicious for the bank, he could request additional documentation, such as birth certificates, driver’s license or passport. But it is not very common that they make this type of requirements.


9. Deleted cards

Deleted cards

It works very much like a fraud described above. In this type of trap, what criminals do is erase the information from the magnetic strip with a very powerful magnet, so that they do not work. Then they physically manipulate the card so that it looks according to the data they want. Naturally, this card will not work when the offender tries to pay with it, however they will use their charm to convince a merchant to simply enter the card details manually.


10. Fake cards

10. Fake cards

A card has to fulfill certain complex security functions and every day banks advance in these security measures, which means that it is very difficult to counterfeit one. But that does not stop a certain criminal, with effort and long time ability to create fake credit cards.

They manage to copy magnetic strips, chips and holograms, so for an expert forger it will not be a problem to falsify the numbers and the name of the account holder. The criminal will make transactions, but the card is not linked to an account, for this reason the bank will not pay the transaction, as it cannot link the transactions to a specific user. By then, the criminal will have disappeared with his purchases.


11. Taking possession of the account

credit problem

This is a fraud that is becoming relevant lately, as criminals send fake emails in the name of the bank to enter your account number and PIN. Thus they take possession of your accounts. It is likely that the criminal will contact the bank and pretend to be you, they will ask the bank to change the address and phone number so that they have more control of your accounts.

They can easily circumvent security measures, as they have hacked your accounts and can give proof of identity. They can even request replacement cards that will arrive at your home and thus make charges more easily.

I recommend you never answer the emails of the bank and do not access the portal of the financial institution through email links. It is very important that you take great care of who you give your personal information. Use common sense and never leave personal documents in sight of anyone.