A Complete Guide for Protecting Against Credit Card Fraud

Credit Card Fraud

Many of us prefer to make an online purchase, providing tremendous impetus to the e-commerce industry. There has been a significant increase in the number of online transactions. It helps users to make purchases even when they are on the move. According to the Statista Market Outlook 2021, the value of digital payments done globally was US$ 5.2 trillion, and 63% of them were from online commerce.

The vast number of online transactions have also seen incidents of online fraud occurring. There is an increasing trend of such scams happening worldwide. According to Merchant Savvy, global payments fraud has increased to US$ 32.39 billion in 2020. There must be processes in place for protecting against credit card fraud.

What is Credit Card Fraud?

Are you aware that your online transactions can get affected due to credit card fraud? A fraudster can utilize the stolen financial information for any malicious end. Credit card frauds are committed using a payment card. They can be used to obtain any materials, make payments, or make unauthorized transfers controlled by a cybercriminal.

There are several e-commerce sites, and some of them are also without the requisite safety measures. Scammers use the latest technologies to get hold of sensitive information and use them for their dubious needs. They use several techniques, and they do not need your card physically either. We will learn about some of these methods.

Types of credit card fraud

Find below different types of credit card fraud

1: The Card Not Present fraud

For making online purchases, users only need to enter their card details, and physical cards are not required. Users must be aware of phishing emails and malware that may require them to type their financial information. You must not click on unknown links that will take all your necessary information.

Some of the premium cards may come with added security features, and the providers can automatically block your card if they come across any suspicious activity. If you suspect someone may have got your card details fraudulently, you must inform your provider to block the card immediately.

2: False applications

While providers undertake several checks before approving an application, there can still be few criminals who can use your details to apply. They may use the card for several transactions before you realize you have been duped.

In some cases, the bank account can also be linked to the card and may ruin your credit score. You must also check all your credit card transactions and always look for any drastic fall in the credit score.

3: Stealing card details

A skimming device can allow a criminal to steal the card details from the magnetic strip. There can be point-of-sale breaches too. One of the common ways to steal card information is through phishing, where the user clicks on a phishing email and provides the card details.

There could also be occasions when you may request a credit card, but the thieves can take it before it reaches you. It can lead to fraud by the thieves who get hold of your credit card.

Why does credit card fraud take place?

Below are some reasons of Why does credit card fraud take place?

1: Use of technology

The fraudsters can only get hold of the card details to initiate a fraudulent transaction. Earlier, they had to get hold of the physical cards to start such a transaction. Besides, they can also use the latest technologies to steal sensitive information. They can also visit the dark web and get hold of several such accounts by paying an amount.

2: Easily evade the law

Most credit card users are unaware of fraudulent transactions, mainly if the amount is meager. It takes a lot of time to go through the transactions and find out the fraudulent ones. Moreover, even a few are reported to law enforcement agencies. Furthermore, only a few of the cases meet a logical end.

3: They remain anonymous

The fraud is committed online, and they also remain anonymous even after they have committed the fraud. They can operate from any location and at any part of the globe. The hackers have to create fake email addresses and post office boxes that can be used to carry out their fraudulent activities.

How can you identify credit fraud?

Even if you feel you have taken the necessary steps to prevent credit card fraud, fraudsters may still have evaded your defenses. But how can you identify them? We will now have a glimpse of how you can locate such fraud.

As a merchant, you must always double-check the chargeback requested by banks. In some cases, it could be a chargeback fraud, and it will help if you dig deeper and assess whether the consignment has indeed reached the desired location. You would need to lodge a counterclaim that the goods were undoubtedly sent to the client.

You must also check the order data, and if the city and the zip code do not match, you must raise the alarm. The order must also be checked, and if there is a sudden spike, you better check the details of the transaction.

While it may seem a windfall for merchants, several purchases made during odd times must ring a bell as well. Fraudsters usually make such massive purchases only when they have got hold of sensitive information. As a cardholder, you must also look out for any such transaction that will stand out in the credit card statement.

Also, check the shipping address of the transactions being made. In some cases, the shipping address may not match, which may require you to take a closer look at the transaction. The IP address must also be checked frequently, and the location must be mapped too.

Steps for protecting against credit card fraud

For e-commerce sites

Ensure the website has an SSL certificate

One of the primary needs of an e-commerce site is to install an SSL certificate. It will encrypt the interaction with the user’s browser and prevent any attack on the underlying database. The SSL certificate uses the Public Key Infrastructure (PKI) that uses a pair of public-private keys to encrypt the underlying exchange of information. You can choose any of your choices from among the SSL Certificates like GeoTrust SSL certificate, Comodo, Thawte SSL Certificates, RapidSSL Certificates, GeoTrust SSL Certificates etc. that offer next-generation encryption technology and superior customer service.

Monitor suspicious activity

All e-commerce sites must have an audit log that will log all the activities on the site. It will also help to pinpoint any suspicious activity that may be occurring around your website. The transactions must be checked for the shipping information and the SKUs involved. If there is any sudden spurt of activity by any user, such transactions must be checked thoroughly. The website must also use the CVV number for all transactions.

Use anti-fraud solutions

As a merchant whose website undertakes online transactions, you must also install anti-fraud solutions. The solution can validate the email addresses and assess the transactions through IP geolocation. Other tools can safeguard against high-risk orders, prevent new account frauds, and check the chargeback events. The premium ones help prevent genuine orders from being disallowed while aiding in managing loyalty fraud and assisting in reviewing suspicious transactions.

Updating and maintaining the site

The e-commerce site must be updated regularly to prevent any vulnerabilities from being exploited by hackers. You must also install high-grade antivirus software that will come with an anti-malware and a robust firewall. The website must be updated whenever any patches are available that will prevent any data breach. You must also assess the activities by going through the audit trail.

For the users

Create robust passwords

Users must ensure that they use robust passwords that will prevent brute force attacks. Moreover, it would help if you did not use the same password across all user credentials. It is better to use a password manager that will help you to create a strong password and help to remember the passwords across all the e-commerce sites. The password must be changed at regular intervals as well.

Use credit cards from credible brands

Several credit card options are available, but it is suggested you stick to only a handful. Ideally, you must choose a card from your banking service provider only. Also, do not forget to include insurance against fraudulent transactions. You must check whether there are any adverse comments about the credit card brand.

Use the two-step verification process

One of the best ways to prevent credit card fraud is to use the two-step verification process. When you use your email address or contact number and a unique code to log in, it gives you a small window of opportunity against a hacker. Please use fingerprint or facial recognition techniques for logging in.

Few points to note

It is necessary to check the credit card statements once they arrive. It would be best if you destroyed the old statements once you have audited them in detail. Do not carry all your cards together and check the credit reports periodically. Call the customer support team if there is a drastic drop in the credit score. Also, look out for phone scams when someone may call you to know the credit card number.


As the number of incidents of transaction fraud increases, there is an increased need to deploy suitable safeguards to prevent these attacks. While e-commerce merchants are devising adequate security measures, the cardholders must also ensure that they take proper steps for protecting against credit card frauds. The moot point is understanding the techniques used by the hackers that will make you devise appropriate measures to prevent a data breach.

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