Card Not Present Fraud

In these days of Internet and telephone shopping, we often buy goods on our credit cards without the merchant being able to see the card. That makes it a market open for fraud - in fact over £150 million in 2004

How It Works

You make a purchase by credit card in a shop, and perhaps you don't take your receipt, or just discard it in a bin, either on the street or at home. It's found by a "bin diver" and used for purchases online or over the phone. The first you know about it is when you receive your monthly statement.
The main areas for 'card-not-present' crooks are high-value goods - expensive televisions, computers, etc. - that can be easily purchased and sold on by crooks.
They're helped by the fact that, according to statistics, one in three people don't shred their receipts when they have finished with them, while one in five people allow others to use their credit cards to make purchases.

How To Avoid The Fraud

• Don't let anyone else use your credit card.
• Always take your receipt.
• Keep your receipts, and tear them up, or preferably shred them, before disposing of them.
• Only shop from well-known web sites which display a secure padlock logo, and have both a landline phone number and a real address (not a P.O. Box).
• Don't give out your PIN numbers.
• Keep your credit cards and cheque book safe.

What To Do If You're A Victim

Inform your credit card company immediately once you discover the fraud. You're only liable for the first £50, but in practice many companies won't make you pay that.

Remember that your card will be cancelled, and a new one issued, so remember not to use the old card.

Contact the credit reference agencies and request a copy of your credit file (it costs £2) to ensure no one has used your information to apply for credit in your name. Challenge any inconsistencies, and have a fraud alert placed on your file.

Contact CIFAS (0870 010 2091) to ensure that any further transactions in your name are double-checked.

For Businesses

Obviously, businesses are affected by this fraud too. The best ways they can protect themselves are:

• Implement a AVS/CVC checking system.
• Use an address verification service.
• Register Verified by Visa and MasterCard Secure Code.
• Avoid orders overseas where possible.
• Use the APACS CNP Guide.
• Where possible, validate telephone numbers through Directory Enquiries and call the customer back to confirm the order.
• Exercise caution with people only willing to provide mobile telephone numbers for contact.
• Consider implementing a transaction "ceiling limit".

Related Articles in the 'Credit Card Scams' Category...

• Bank Identification or BIN numbers Scam
• Visa Credit Card Scam
• Credit Card Cramming
• Card Skimming Fraud
• Call-Tag Scam and Re-Shippers

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