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Credit Card Fraud and Its Impact on Consumer Perception: An Essay

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The fraudulent use of a card account by the theft of the account holder’s card number, card details and personal information, through a plethora of methods in order to perform unauthorized transactions from the compromised account is called a card fraud.

Causes of Credit Card Fraud

Reasons for massive online card fraud are that it is easy enough to buy stolen credit card information, moreover, legal action is rare, and online fraud may be a low priority for law enforcement, due to difficulty in collecting evidence and time and resource constraints.

Different Ways to Produce Credit Card Fraud

Some of the various ways, by which online card frauds can take place, include:

  • Pharming. In pharming, fraudsters reroute the user to a faux website that appears much like the original. The card details can be stolen when the account holder conducts transactions and make payments via credit or debit card.
  • Keystroke logging. In this method, a software is unintentionally downloaded by the user, which allows the fraudster to trace the key strokes and steal passwords or credit card and Net banking details.
  • Public Wi-Fi. Usage of public Wi-Fi to carry out transactions on smartphones can provide a good hacking opportunity for thieves to obtain card information.
  • Malware. Malware is a software program which can harm computer structures at ATMs or bank servers and permits fraudsters to get admission to confidential card records.

Options for Using Stolen Card Data by Fraudsters

A fraudster can use the stolen card information in the following ways:

  1. Online purchases. Card information can be used for online purchases. It is easier to do this if the thieves also have the user’s billing postal code and the security code from the back of the card.
  2. Sell information. Credit card information can be sold over the Internet. The price is determined according to the type and amount of information, the more information the thief has, the more valuable the card information is.
  3. Create duplicate cards. Fraudsters can create identical credit or debit cards by programming the credit card information on gift cards or prepaid credit cards.

How to Know If Online Card Fraud Has Taken Place?

  1. Don’t ignore odd problems with your web accounts. Messages and emails informing that the account has been accessed from a new device or the web dashboard showing a ‘last logged in’ date which the user does not recognize should not be ignored as they could be the first sign of identity theft.
  2. Check your bank account and credit card statements. Monitor statements of the card regularly to check for any discrepancies such as transactions you don’t recall making, amounts that seem unusual or a vendor name you do not recognize. If you suspect any other activity which is not done by you, contact the bank or credit card company and report it immediately. Changing the password or setting up a two-factor authentication to enhance the security of your accounts can prevent identity thefts.
  3. Run a free credit report. Running a credit report every four months can help detect theft. If the first credit score seems low, there is a chance that your identity has been stolen. A report check can help provide information on any credit cards, loans or other financial details, and if there is any suspicious activity, get in contact with the credit bureau and let them know where you think the problems are.
  4. Pay attention to your email and post. Be vigilant of the emails and physical bills that you receive on emails and, more importantly, those you do not receive. If someone steals your identity you might start seeing a lot less email because the thief is having it delivered to a different address. Furthermore, emails that don’t belong to you, could also be an early warning sign of fraud. This should raise some issues, which you should be able to figure out by reporting it to the credit card company that it came from.

Ways to Prevent Online Credit Card Frauds

  • Use safe and secure websites. Visit only renowned and established sites for online shopping. Confirm the website’s legitimacy before using it and shop only on those that are Secure Sockets Layer (SSL)-certified which can be identified by the lock symbol next to the browser’s URL box. Make sure that the website uses the ‘https’ protocol instead of ‘http’, where ‘s’ stands for ‘secure’. Also, make sure not to click on the choice that asks for saving your card details on any website. You should look for a website’s payment verification tools, such as Secure Code of MasterCard, which verifies that the payment is made by you while protecting the privacy of the online transaction.
  • Anti-virus software. Installing identity theft detection apps on the phone from an official app store can help prevent frauds. A computer software that enables the wiping out of the data remotely in case the mobile gets stolen can also prevent confidential data from being stolen.
  • Debit. Transactions using a debit card are riskier than credit card transactions because if card is compromised, the entire cash in the bank account can be wiped out immediately. The credit card, on the other hand, offers a month’s grace period before the cash leaves the account, during which the investigation can possibly identify the fraud.
  • Hide CVV. When you enter the CVV on the website, it should be encrypted by asterisks. This is especially important while shopping on foreign websites where the CVV is the only point of authentication. A virtual keyboard helps to prevent keystroke logging.
  • Public Wi-Fi. Unsecured W-Fi networks or public Wi-Fi are these are easy targets for identity theft cases in online transactions.
  • Register for alerts. This is a very crucial step because the bank will warn you of any online card transaction or ATM withdrawals the moment those take place. If there is any change in the contact details, they must be updated to receive alerts.
  • Log out. Logging out from social media websites and other online accounts ensures data security. Confidential passwords should not be stored on mobile phones as these can be used by fraudsters.
  • Change passwords. Frequent password changes reduce the probability of identity theft.
  • Virtual cards. Virtual cards are limited debit cards that do not provide the fundamental card details to the seller and expire after 24 hours or 48 hours.

If we are talking about banks and what they can do to prevent card fraud on the Internet, we can note the following:

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  • Check account level. understanding the usual behavior and login timings of the customers can be helpful. Analytics can be used to identify the unusual transactions for the account holder.
  • Creation of Unique Account User IDs. Unique profiles for each of account holder can be created by the bank by unique user names.
  • Dual Control. Two different users approving the transaction can help reduce fraud.
  • SMS Messaging. When a change is requested in the number or the email, the bank can identify it as a fraud by contacting the account holder and verifying if the change is requested from him/her.
  • Controls on Email and IP Address. Allowing only some email addresses or IP locations to carry out transactions online on the bank’s website can help control frauds.

Effects of Online Card Frauds on Consumer Perception

77 % of account holders check their bank accounts weekly for suspicious activity. News of frauds on many fronts have established a sense of vigilance and hesitancy among users.

62 % of respondents believe they are at an increased risk of fraud today than they were two years ago. Criminals can use details to steal information from many accounts, making proactive education about safeguarding personal information is a vital component of fraud prevention.

38 % of consumers responded to experiencing at least one instance of fraud on an existing bank account. With technology friendly fraudsters overcoming many of the existing fraud detection systems, frauds have become widespread and many users have experienced it at least once.

36 % have cancelled a debit or credit card or closed their accounts entirely. Online card frauds have alarmed customers and many of them have closed their accounts or closed their accounts due to it.

51 % of consumers say they have had a transaction declined because their banks mistakenly suspected fraudulent activity. The effort taken by banks in trying to stop fraud backfire sometimes. The embarrassment from a transaction being declined can often be just as detrimental to a customer relationship as instances of actual fraud.


The growing scale and reoccurrence of fraud attacks has increased public awareness of threats, benchmarking a new standard of consumer expectations to be protected from fraud and notified in the event of a breach. A survey found that 75& of respondents expect their banks to inform them of suspicious activity within an hour or less, and 59 % say they should be notified immediately. Meeting these expectations is not an easy task; it is more than just security threat, and it has notable implications on the satisfaction of customers. Suspicious activity is inevitable, and when it happens, a bank should know the best time and channel through which to alarm the customer. How efficiently and effectively a bank detects fraud, combined with the communication to customer at the right time – either as an alert or to request verification of activity establishes trust and a sense of security that maximizes loyalty and ongoing revenue opportunities.

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Credit Card Fraud and Its Impact on Consumer Perception: An Essay. (2022, August 25). Edubirdie. Retrieved May 24, 2023, from
“Credit Card Fraud and Its Impact on Consumer Perception: An Essay.” Edubirdie, 25 Aug. 2022,
Credit Card Fraud and Its Impact on Consumer Perception: An Essay. [online]. Available at: <> [Accessed 24 May 2023].
Credit Card Fraud and Its Impact on Consumer Perception: An Essay [Internet]. Edubirdie. 2022 Aug 25 [cited 2023 May 24]. Available from:
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