Fraud Detection in Credit Cards Types of fraud and how to avoid them

In 2021 alone, Indians lost ₹160,000 crores in banking scams. Among these, credit card fraud in cyber security has emerged as one of the most prominent concerns. In the last fiscal year, the RBI recorded the highest number of cases related to digital payments with credit cards. Despite security advancements and encryption protocols, fraudsters and hackers can misuse your credit card. In this context, vigilance on your part is crucial to identify suspicious activity and protect yourself from becoming a victim.  

To learn various types of frauds in credit cards, how to avoid them and more, read on.

What are Credit Card Frauds?

Credit card fraud in cyber security happens when someone gets access to your credit card and other sensitive details without your permission. Scammers generally steal your card details physically or hack into your account virtually. If they get your details, fraudsters can use your card to make purchases, withdraw cash or open a new account in your name.  

Types of Credit Card Frauds

In today’s digital age, the convenience of credit cards comes with a threat of financial scams. Here are the various types of fraud related to credit cards to be aware of.

Skimming

It is among the most common credit card frauds. Here, scammers steal your card information with the help of a device known as a skimmer. This device stores your data when you swipe your credit card through it. 

Scammers then duplicate this information on another card. They can also copy your credit card information manually. With this information, scammers use your credit card to pay for goods and swindle you. 

Phishing

It refers to a scam in which you get fake text messages, calls, or emails that seem legitimate. Such communication leads you to click a link or enter your financial information. Scammers then record and use your login credentials to make transactions using your credit card. 

This scam works on persuasion since you tend to believe that the sender or caller is genuine and from your credit card company. So, be careful about verifying the communication before you click on links and share your financial information. 

Hacking

This is a popular way used by hackers to steal your financial information by breaching into your smartphone or laptop. Scammers can also extract information from financial institutions and companies you have transacted with. 

These scams are difficult to catch, so you must perform online transactions carefully. Always check the authenticity of the websites or apps and avoid clicking on unknown links.

Keystroke Capturing

Scammers use this way to steal personal information. Hackers send out links that download malware without your knowledge. After installation, this malware records every keystroke you make on your device. 

When you make online payments, it stores your IDs, passwords, account numbers and CVV, which miscreants then misuse. To prevent this, protect your devices with antimalware and be careful about clicking on unverified links. 

How are Credit Card Frauds Caught?

If you detect any fraudulent transaction on your credit card, report it to the issuer at the earliest. After this, the bank will take over by blocking your card and issuing a new one. The issuer will then conduct a fraud investigation, which generally involves the following steps:

• Investigators contact the merchant to gather evidence, including timestamps, IP addresses and location data associated with the suspicious transactions 
• They may get the security camera footage from the merchant’s location if there was a physical card theft
• If necessary, the investigators may file a police report for further investigation

Ways to Avoid Credit Card Fraud

Protecting your financial and other sensitive information is paramount. Here are some tips that can help you stay protected.

• Keep your credit card information, including card number and CVV, private 
• Monitor your credit card transactions regularly by checking statements to catch instances of unauthorised usage 
• Use your card only on secure websites and online platforms
• Avoid leaving paper trails containing your card information
• Report a stolen or lost card immediately
• Do not sign on any blank receipts, and cross-check the amount with your issuer
• Create strong PINs and passwords that cannot be guessed easily
• Add additional security using RFID wallets, two-factor authentication and other means 

To get a credit card that prioritises your safety, get the Fibe Axis Bank Credit Card. Being India’s first numberless card, this virtual credit card is linked directly to your UPI ID and adds another layer of security to your transactions. What’s more, it offers exclusive perks, such as cashback, dining discounts and fuel surcharge waivers. Download the Fibe App or register on the website to apply for it today!

FAQs on How to Avoid Credit Card Frauds

What is the best way to avoid credit card fraud?

To stay clear of scams related to credit cards, stick with the following best practices: 

• Keep your credit card information private and monitor your statements regularly
• Make purchases from genuine websites and avoid paper trails with your credit card information

How are credit card frauds caught?

You can detect fraud in credit cards by regularly checking your statements. Look for any unauthorised transactions or other suspicious activities. You can also check the transaction alerts sent to your registered number.

What are common methods of credit card fraud?

Some common methods of credit card fraud include: 

• Skimming
• Phishing
• Hacking 
• Keystroke capturing
• Account takeover

Can someone use my credit card with just the number and CVV?

No, you also need to provide the PIN and OTP to carry out transactions using your credit card. However, sometimes hackers may use illegal methods and transfer money with just your credit card number and CVV.