Credit card fraud has become a big problem nationwide, as millions of Americans become victims of the crime every year. But now, companies that deal with consumer credit are working on ways to reduce one rather problematic kind of credit card crime.
Card-not-present fraud is, as the name implies, a type of credit card fraud that allows scammers to make illegal purchases using a person’s account even if they do not have the physical card with them, and now companies are doing more to stamp it out, according to credit scoring agency FICO. This type of fraud is most prevalent online, when all a criminal might need to complete a bogus transaction is a credit card number, expiration date and security code, all of which aren’t necessarily difficult to obtain.
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Currently, experts see this type of crime becoming more prevalent around the world, and already it accounts for more than 50 percent of all fraud losses, the report said. Further, many are concerned that with issuers in the U.S. poised to switch from the current type of card security, which relies on magnetic strips, to new technology that employs microchips to safeguard security, the switch will encourage crooks to rely even more heavily on card-not-present fraud. A similar movement was observed in Europe when card issuers on that continent began issuing chip-and-PIN cards, as the plastic became far more difficult to counterfeit.
For its part, FICO says it is now developing tools that help it to better spot batches of purchases that might be indicators of fraud, the report said. Typically, crooks who have large amounts of stolen credit card numbers will make a variety of low-cost purchases on those accounts in a relatively short time period as a means of testing how vigilantly the accounts’ legitimate users monitor their balances. By spotting when these purchases are made en masse, the company may be able to crack down on card-not-present fraud.
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Of course, credit card fraud doesn’t just affect a consumer’s finances, but can potentially do significant damage to one’s credit standing. It is therefore important for cardholders to keep a close eye on all their accounts for any sign of suspicious purchases that may be signs of fraud. When consumers discover fraud, they should report it to their financial institution as soon as possible.
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