14 Common Credit Card Frauds You Should Avoid


In this post, we will discuss the most common credit card frauds in order to enable you to recognize them easily. Fraudsters commit Credit card fraud in different ways using a credit or debit payment card for different reasons.

Some carry out this theft to obtain funds from accounts, and others get goods free. Besides, credit card fraud is closely related to identity theft.

As of 2008, identity theft rose by  21% but the percentage of identity theft cases linked to credit card fraud has reduced. Below are the 14 most common credit card frauds.

List of the most common credit card frauds

Below are some of the most common credit card frauds:

1. Account takeover

Account takeover is the first in this list of the most common form of credit card fraud.  It is not unusual for this type of fraud to occur due to carelessness. What happens is that criminals get hold of all of your personal information and vital documents online.

The next things they do are to contact your credit card company and assume your identity. And then ask them to change the address. Also, they can give the credit card company a ‘proof’ of identity, because they already have your details. So the Credit card company will send a replacement card to the fake address, and the criminals will start charging your account.

So, to protect yourself from this type of fraud, use strong, unique passwords and make sure your documents are not left carelessly.

2. Application fraud

Application fraud occurs with identity theft. This is another one in this list of most common credit card frauds. First, the criminal will steal your personal documents and then apply for credit or a new credit card in your name.

However, Banks usually stop this type of fraud by asking for only the original document before they act on this request. Banks also make a call to your employer to confirm your identity.

But these criminals often counterfeit documents and give false telephone numbers for your places of employment. And sometimes they succeed in beating the banks security and vigilance. So, keeping your personal documents safe is the best way to protect yourself from application fraud.

3. Fake cards

Though it is hard to fake a card due to advanced technology, determined criminals usually succeed in faking a card. All cards have a magnetic strip, chip and, a hologram. Despite these complicated security measures on a credit card, often a skilled person can forge the card with a fake name and number and transact with the card.

But this type of card is not connected to anyone’s account and so the credit card company will refuse the transaction and fail to pay but the criminal would have disappeared with the goods they bought.

4. Electronic or manual credit card imprints

This type of fraud is in this list of most common credit card frauds because it happens regularly. How it happens is through credit card imprint. A criminal reads the information on the magnetic strip of your card fast. Then use the stolen imprint to encode a fake card or carry out fraudulent transactions.

5. Doctored cards

These cards have their potent magnetic metallic strip wiped clean. After doing this the criminal will then go and change the information on these cards to match the details on genuine cards. Most times these cards will not work. But these criminals use their charisma to convince a merchant to accept to type in the details of the card by hand.

6. CNP fraud (card not present fraud)

Be vigilant because if a criminal knows the date your card expires and your account number they will attempt to commit a CNP fraud with the information. They commit this crime by Phone, internet or email. This scam is on the list of most common credit card frauds because it occurs often. What CNP means is that a criminal will use your credit card without having it physically.

However, these days Merchants now ask for the verification codes before they accept the transaction and this has reduced this fraud.

But because the verification code is restricted to only 999 combinations, criminals who get a hold of your card and account details will order things that are not costly while they try to find out the actual verification code of your card.

So look out for low charges in your credit card account statements and report it immediately if you are not the one that made them.

7. Assumed identity

The assumed identity fraud occurs when a criminal uses a temporary address and a fake name to get a credit card.

But, a bank has safety measures against this fraud. All it will do is ask a customer to provide references for the account. The banks will then confirm whether they are real. Also, banks block this type of fraud by asking for original driver licenses, passports, birth certificates for sighting plus copies before they issue a credit card to clients.

8. Counterfeit card fraud

A  Counterfeit Card Fraud happens when a criminal is able to quickly read through the Magnetic Stripe of your credit card. They do this by using a fake magnetic swipe card to capture your credit card information. They now use it to make a clone copy of your card and make payment for purchases by swiping it on a machine.

Also, anyone that knows your card details can commit this crime against you. The person will make a fake plastic card but the magnetic strip will not work. But they often use their charm on a merchant and persuade them to enter the transaction manually.

9. Mail non-receipt card fraud

This is another type of fraud in the list of most common credit card frauds. It happens when a criminal intercepts your new card or replacement card. The criminal will now register the card and start using it to buy things and enter into all kinds of transactions under your account. The real owner will not or never receive the card.

10. Card ID theft

This card id theft happens when your credit card information becomes available to a fraudulent person.  The fraudster then uses the details of your card to make a new card or take over your credit card account.

In this case, the criminal will use your name. This is hard to detect and it can happen for a long time before you find out.

11. Lost and stolen card fraud

Lost and stolen card fraud is another fraud that is part of the most common credit card fraud. It occurs when your card is either stolen or you lost it. These fraudsters that find or steal it, use it to pay for what they buy online.

They cannot commit this fraud using machines as they have to provide the PIN number. So make sure you cancel a credit card when you lose it.

12. Phishing scams

This type of fraud occurs when criminals write an email and design it to resemble the type you receive from your friends, colleagues,  social networking sites, banks or financial institutions.

They use official logos and emails that look real to ask the reader to log in and enter their passwords to verify accounts connected to fraudulent websites. Please note that Banks never ask for this type of information from their customers. So if you get it, don’t enter your details.

13. Hacked e-commerce merchant

This happens when a database of an online merchant is compromised. This lead to online fraud and you will only find out months later from your credit card statement of account.  In most cases, you will think it is the Merchant that carried out unauthorized transactions on your credit card account.

And banks will refuse to give you details of the compromised online merchant or the address linked to this fraudulent purchase.

14. ATM points compromise

This is the last fraud in the list of the most common credit card frauds. How this happens is that thieves fix fraudulent devices to ATMs, Gas Pumps, and any other type of card reader to steal card numbers and PIN numbers.

And you may not discover this type of fraud early. In this case, the banks can tell you the source of the fraud. Often it leads to criminal gangs.


Most of them are linked to identity theft and mostly succeed when merchants agree to enter the cards manually. Also, they occur online and even at the ATM or on other card readers.  As a cardholder, you should guard your personal information well, and study your statement of account thoroughly, for any unauthorized transactions, and report it immediately.

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