Credit card fraud schemes fall into one of two general categories: application fraud and account takeover. Application fraud refers to scammers who open credit card accounts in someone else’s name. This can occur when the criminal obtains enough personal information about the victim to completely fill out the credit card application. Alternatively, the criminal may create counterfeit documents. Such a scheme poses a serious problem because the criminal can make numerous purchases without the victim knowing. The billing statement may not come for a month, if ever.
Account takeovers typically involve the criminal hijacking an existing account. A criminal can pull off this scheme by obtaining enough personal information about the victim to contact the bank or credit card company and having the billing statement location changed. Upon completion, the criminal can report the card lost or stolen and ask the bank or company to send a new card to the new location. The criminal then can make fraudulent purchases on the card.
Another common method used to achieve an account takeover is skimming, which occurs when employees with access to the credit cards of customers record the card information and use the information fraudulently.
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