Credit and Debit Card Fraud

For more information on credit and debit card fraud and scams, select the source and summary below:

Informational Publications and Websites: 

1. Federal Trade Commission - Credit Card Fraud

        Theft, the most obvious form of credit card fraud, can happen in a variety of ways, from low tech dumpster diving to high tech hacking. A thief might go through the trash to find discarded billing statements and then use your account information to buy things. A retail or bank website might get hacked, and your card number could be stolen and shared. Perhaps a dishonest clerk or waiter takes a photo of your credit card and uses your account to buy items or create another account. Or maybe you get a call offering a free trip or discounted travel package. But to be eligible, you have to join a club and give your account number, say, to guarantee your place. The next thing you know, charges you didn’t make are on your bill, and the trip promoters who called you are nowhere to be found. The FTC provides ways to identify credit card fraud, steps to protect yourself, and what to do if you find yourself a victim.

2. - Alert: Credit Card Fraud and Debit Card Scams

        This site provides regular alerts and news as to the latest credit card and debit card scams and frauds. It compiles consumer alerts from sources such as the Better Business Bureau, the Federal Trade Commission, and other fraud alert organizations.

3. National Consumer Law Center - Advice For Seniors About Credit Cards

        This Consumer Concerns newsletter is designed to provide seniors with helpful advice and information when deciding to obtain a credit card. It provides a list of things to consider, key items to keep in mind when reviewing credit card offers, and a discussion of the ways in which the new credit card law protects consumers. Special sections also include tactical ways to avoid problems when using credit cards and advice when you get behind on credit card payments. Tips in this newsletter are helpful to detecting frauds and scams relating to credit cards.

4. AARP Money - Scams and Fraud

        The AARP provides information on how to protect your data as a result of the latest breaches in credit card security.

5. Consumer Financial Protection Bureau - Protections for Automatic Debit Payments

        Automatic payments can help you stay on track with bills and other regular payments. However, be careful about giving a company permission to take payments directly from your account. This site provides valuable information to know before you give anyone your bank account number and permission to automatically withdraw money from your bank account on a regular basis. It describes how automatic debits work, what to be careful about, and how to stop the automatic payments if you cancel the service or just change your mind about how you want to pay.  

6. Credit and Debit Card Chip Technology

Did your bank recently send you a new credit or debit card with a shiny, metallic chip on the front? You may have noticed that some cards have this chip in addition to the standard magnetic stripe on the back of the card. This webpage describes the new credit card chip technology and its role in helping cut down on credit and debit card fraud.


        President Obama established the Financial Fraud Enforcement Task Force in November 2009 to hold accountable those who helped bring about the last financial crisis as well as those who would attempt to take advantage of the efforts at economic recovery.

The task force is improving efforts across the government and with state and local partners to investigate and prosecute significant financial crimes, ensure just and effective punishment for those who perpetrate financial crimes, recover proceeds for victims and address financial discrimination in the lending and financial markets.

This site compiles and offers information on various types of fraud and resources on how to protect yourself.

Scholarly Articles, Research, and Analysis:

1. Ioana Vasiu and Lucian Vasiu, Riders on the Storm: An Analysis of Credit Card Fraud Cases, 20 Suffolk J. Trial & App. Adv. 185 (2015).

Credit card fraud presents an impressive array of forms and methods, often involving sophisticated means, organized crime aspects, and very significant criminal proceeds. Based on an extensive inquiry that involved the study of a large number of credit card fraud cases brought to the United States federal courts in violation of 18 U.S.C. § 1029(a)(1)-(5), press releases from law enforcement organizations, and information security reports, this article discusses the legal elements, the essential perpetration aspects, and the most relevant sentencing enhancements for these crimes, and proposes a number of improvements. The contributions of this article can be used for a more effective legal and judicial response in the process of risk identification and mitigation, and for developing awareness and training programs. Although the article focuses on one jurisdiction, the findings, particularly those in the perpetration aspects section, and the conclusion would be useful to a global audience.

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2. Women’s Institute For A Secure Retirement / National Adult Protective Services Resource Center - Just The Facts, Senior Financial Abuse, Identity Theft and Credit Card Fraud (2012).

        Senior financial abuse scams are a multi-billion dollar "industry." The victims of these scams are not only older people, but also their families, their financial institutions, taxpayers and all who provide services and financial assistance to the victims. Many consider these financial scams as the crime of the 21st Century. According to a 2011 study by the MetLife Mature Market Institute, the estimated annual financial loss from Senior financial abuse was 2.9 billion dollars, based just on the cases which made it into the media. The study does not include pain and suffering, nor the tens of billions spent on indirect costs for medical care, social services, legal costs, or losses in income and assets. Older adults control the majority of wealth in the country, but all seniors regardless of income are at risk. Abuse may be perpetuated by anyone ‐ a professional con artist, paid caregiver, stranger or casual acquaintance, or even a son, daughter, or other family member.

The following factors contribute to the prevalence of senior financial abuse:

We can help to eliminate this abuse by finding the most effective ways to prevent and respond to the

problem. Education and awareness are two key strategies. This fact sheet looks at identity theft and credit card fraud, and provides resources to keep seniors from falling victim to these financial traps.

Online Fact Sheet

3. National White Collar Crime Center, Credit Card Fraud Fact Sheet (June 2008).

This fact sheet defines credit card fraud, discusses how it happens, and provides costs and statistics related to these scams. Examples and case studies are also provided, as well as a thorough discussion of the response and current efforts made by financial organizations and merchants. Other sources and sites are also listed, as well as a bibliography reference section.

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4. Hetvi Modi, Shivangi Lakhani, Nimesh Patel et al, Fraud Detection in Credit Card System Using Web Mining, International Journal of Innovative Research in Computer and Communication Engineering, Vol. 1, 2 (April 2013).

        Now a day the usage of credit cards has dramatically increased. As credit card becomes the most popular mode of payment for both online as well as regular purchase, cases of fraud associated with it are also rising. Various techniques like classification, clustering and apriori of web mining will be integrated to represent the sequence of operations in credit card transaction processing and show how it can be used for the detection of frauds. Initially, web mining techniques trained with the normal behaviour of a cardholder. If an incoming credit card transaction is not accepted by the web mining model with sufficiently high probability, it is considered to be fraudulent. At the same time, the system will try to ensure that genuine transactions will not be rejected. Using data from a credit card issuer, a web mining model based fraud detection system will be trained on a large sample of labelled credit card account transactions and tested on a holdout data set that consisted of all account activity. Web mining techniques can be trained on examples of fraud due to lost cards, stolen cards, application fraud, counterfeit fraud, and mail-order fraud. The proposed system will be able to detect frauds by considering a cardholder’s spending habit without its significance. Usually, the details of items purchased in individual transactions are not known to any Fraud Detection System. The proposed system will be an ideal choice for addressing this problem of current fraud detection system. Another important advantage of proposed system will be a drastic reduction in the number of False Positives transactions. FDS module of proposed system will receive the card details and the value of purchase to verify, whether the transaction is genuine or not. If the Fraud Detection System module will confirm the transaction to be of fraud, it will raise an alarm, and the transaction will be declined.

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5. Sanjeev Jha and J. Christopher Westland, A Descriptive Study of Credit Card Fraud Pattern, Global Business Review, Vol. 14, 373 (2013). DOI: 10.1177/0972150913494713

In this study, the researchers analyzed a dataset of fraudulent credit card transactions to uncover patterns in fraudulent transactions and to demonstrate the importance of focusing on suspicious transactions. They argue that revealed patterns in fraudulent transactions may help financial institutions update their practices and develop innovative mechanisms and systems to improve their performance at preventing and detecting credit card frauds.

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