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Identity Theft-Credit Card Fraud

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Recently, credit card fraud has been a serious problem in this world. Technology is so bloom currently; we usually shop online without going outside to purchase goods. What the intermediate we use to pay for the bill is by credit card. We have to fill in cardholders’ name, billing address, card number, and the most important item is security code. The security code is the key point to verify your credit card to go through the payment. It’s impossible to use your card without that. However, some theft still can hack to your computer and record all of the information you fill in even the security code. Thus, some banks which issue credit card might use the newest technology, 3D verify, to protect the cardholders.

 In fact, Asia is full of fraud criminals that in almost every country. Especially in China and Taiwan, there are so many criminal groups doing credit card fraud to get money. I am from Taiwan, and I heard lots of news that all about credit card fraud, and I always buy stuff online, so I am afraid that my card might be stolen and used by the criminal group. As the result, I choose this topic to analyze and try to figure out what credit card fraud is and how to prevent it being stolen.


There are some professional analyst who come up with some advices for credit card fraud, some technologist also do some innovation to protect the identity of credit card holder’s information, such as 3D verify. I’m going to combine the information I found which wrote in introduction and the methods which can solve the credit card fraud. Moreover, I will come up with some idea for suggestion, even the ideas are still virtual, and maybe someday it will be used.


After all the research and finding, I will come up a conclusion for this research. By searching on internet and combine the news all together, there will be a most appropriate solution for this problem.

Identity Theft

Stealing millions of dollars from major retailers through identity theft is commonplace nowadays. Research shows that not all of those who have had their card number stolen have been identified by the officials yet. A lot of people are unaware that their identifying information has already been compromised. The most recent case is that of a person caught working as a confidential informant for a secret service and charged with computer fraud, access device fraud, wire fraud, aggravated identity theft and conspiracy. All these fraudulent acts were committed through stealing millions of credit and debit card numbers. By searching on the Internet and combining available information, one can come up with an appropriate solution for this problem. This paper details some of the suggestions on how to avoid being a victim of credit card fraud. To begin with, it is very important not to disclose your credit card information when you receive phone calls. Someone may call you and tell you there has been a 'computer problem' and they need you to verify information. Legitimate companies do not ask for credit card numbers over the telephone.

Through my research, I came up safety tips to help cardholders. First, do not respond to emails asking you to provide your credit card information via email. Never respond to emails that request you to go to a website to confirm your personal (and credit card) information. These are scams known as ‘phishing’ scams. Before providing your credit card information make sure the website you are about to log into is a secure one. Also, shred all the credit card applications you are given immediately. Do not leave your credit card and receipts lying around for others to see them. Shield your credit card number from everyone else because you can never be too sure who to trust. They may copy it or capture it with a phone or camera and use it for their own benefit. Update the stored information you have every time you get a new credit card. Do not carry any extra credit card you do not absolutely need to avoid losing them. Compare receipts with monthly bills and make sure there are no counterfeit charges in the credit card bills you receive.  Destroy anything with your personal credit card number visible on it regularly. Do not lend your credit card to anyone you do not completely trust. If you move, notify your credit card issuer about the fact that you have changed your address (Hammond, 2003).

Credit Card Fraud

Thieves can go through trash and find discarded receipts or carbons. They use the account numbers written on them illegally. A clerk can make an extra imprint form in a person’s credit or charge card. This clerk can use the number to make personal charges to his/her benefit. Sometimes, people respond to mailings asking them to call a long distance number for a free trip or bargain-priced travel package. They are then asked to first join a travel club and produce their account number to be billed. In reality, they never get their trip but have the charges added to their bill. Cardholders and issuers lose many hundreds of millions of dollar to credit and charge card fraud each year. They use people’s card numbers even without their knowledge. It is not completely possible to avoid credit or charge card fraud from happening. However, there are a few ways one can make it more difficult for crooks to capture their card or card numbers. These ways can decrease the possibility (Miller and Vandome, 2010).

Government Involvement in Information Security

Law enforcement officials often arrest suspects on charges related to credit card fraud, such as identity theft, computer fraud, credit card fraud and conspiracy. People steal millions of credit card numbers and financial information from the innocent. These characters aim for personal and financial information of normal citizens. They also target confidential and proprietary information of companies, especially those involved in e-commerce. Federal law enforcement agents cooperate with officials from various countries to arrest these fraud suspects. Investigations continue until those guilty of organized cybercrime are brought to justice The U.S. Department of Justice has made several arrests on charges of criminal copyright infringement in their operation Digital Gridlock. FBI and U.S. postal inspectors also announced that they made more than one hundred arrests in their operation Web Snare. Individuals have been accused of exchanging tutorials and information about identity theft and forgery. They have also been accused of trading sensitive personal and financial information.

The charges include conspiring to commit identity fraud, trading emails with personal recognizing information, trafficking in credit numbers, and exchanging counterfeited and stolen identification files. They trade stolen credit card numbers and bank account information, credits cards, counterfeit passports, debit cards, drivers’ licenses, birth certificates, social security cards, college student ID cards, and health insurance cards. Identity fraud related charges have and continue to be made by the law. By going undercover, investigators have found out which sites are actively taking part in criminal conduct (Hayward, 2004). 

Information Security in Globalization

Information economy and globalization have changed tremendously. Technology has advanced and so have the problems. Fraud has changed face with the development. However, there is nothing to link a fraud ring to any terrorist group. Several agencies have taken part in credit card fraud investigations. These agencies keep globalization in mind. Globalization has positive and negative implications on global and national security. Global market forces can generate a lot of wealth, thus giving a boost to economy. Unfortunately, where development is unequal, political tensions can be increased. The Internet has facilitated the spread of human rights throughout the world. It has also been used by individuals to disseminate information necessary for building weapons of terror.

More states have access to fundamental technologies needed to make weapons of mass destruction because of the rising levels of industrial development. Open global market makes controlling traffic of weapons of mass destruction difficult. Whatever happens in one part of the world causes effects in the other. Information systems make the world of globalization happen and continue to remodel it. Nothing is what it used to be before. Large companies have the power to explore new ways to deal with the culture, norms, social values and local needs. China is testing national cyber defenses in its pursuit of cyber superiority. Its cyber warfare capabilities, far advanced than those of other countries, help it target both military and economic systems. The economy of a country depends on the safety and stability of its partner nations. Collaborator nations can lead to the rise or fall of a nation directly or indirectly. The world depends on some countries because they influence imports, human resource outsourcing, and information processing. If something negative happens in these countries, they are affected negatively as well. Interconnected economies create an environment with disadvantages.  One or more infrastructure failures in a partner country can damage another’s stability.

Global distribution of critical information and critical services is risky. It creates more opportunities for fraudsters to access, destruct and interrupt security of information. Security has become so intricate and multi-dimensional. Traditional national border-setting type of security insight is not capable of recognizing new threats that transcend the national borders. Terrorism has also become more complex and challenging with globalization. Global terror requires security cooperation among nations. Powerful states try to control the impact of globalization on terrorism. Globalized world faces international terrorism as a common enemy. Nations are much more connected and interdependent. This is a threat to the international security as a whole. Global terror is a problem for all human beings, and it has become even worse with the onset of globalization. The fight against terrorism has become a priority for all nations because it has acquired new characteristics. The nature and content of terrorism keeps changing (Picker, 1986). States have taken measures to meet the challenges raised by development. Credit card cloning has also transcended borders in the era of globalization. Credit card companies continue to make higher-security credit cards. Chip-embedded cards cost more than magnetic strip ones. Credit card fraudsters use skimmers to capture the details of the credit card in the few seconds it takes to swipe a card through the machine. They download the captured information for whatever purpose without the knowledge of the cardholder. Some banking industries have come up with smart chips implanted in credit cards to secure the information stored in that the magnetic strip.

Cardholders should be more careful these days. Credit card skimming discourages many consumers from making credit card purchases. Sophisticated counterfeiting technologies copy and use the information to reproduce counterfeit credit cards. With globalization, there is a rise in smart ways to secure credit cards. Unfortunately, the same globalization has aided fraudsters to come up with more smart ways to commit their credit card skims.

Online Dating Scams

Once they have your information, they can send emails or pop-up messages, pretending to be your financial institution so that you can give them your personal details. With your email address, or phone number, they can pretend to be your financial institution to get you to reveal your information. If they have your home address, they can change it and divert your bills and bank statements to another address. Never post personal information and details on dating websites. Do not share any personal information with anyone, however safe you feel it might be. It is wise to get to know someone before giving them your cell phone number and other contact details. Keep a log of all chat sessions where possible, in case you need it in the future. Sometimes, the person is not the person in the photos. They upload pictures of models or friends providing fake descriptions. Scammers use established dating sites to get someone to send them money.  By pretending wanting to marry someone, they obtain their passports and then get a divorce. Do not provide your surname, address, credit or debit card details, post code, fixed line telephone, or where you work in dating websites (Layton, 2006)

Companies have revealed products that could significantly reduce online credit card fraud. This is great news for e-commerce companies. Technology is being used to screen new orders against many common fraud detection factors. They leverage common transaction records from companies. They look at their transaction history and review previous criminal activities. They can compare shipping addresses and billing addresses for new customers against their history. They look at the customer’s location history and compare it with the current location of the computer they are placing an order with. The tools can also sense any unusual ordering patterns of the customer.

Social Security Administration

Social security administration gives information to the public about its programs. The information they provide is diverse. For instance, they have proposed changes that should be made to the social security system. These changes are necessary because security needs keep changing. Social security administration has impact on economy, society, and populations. They give detailed demographic and financial information on beneficiaries and covered workers. This information is very private and vital. The government planners, policy makers, economists, actuaries and other social scientists use these products to analyze social security programs. Their activities have a huge effect nation. Agencies should stay informed of the information needs.

Once they note the changes, they must create new data, models, and information products where needed. (Federal Trade Commission, 2006) This way they produce useful and relevant information policy to the people. It keeps abreast of the information needs through various means. They also review analytical and statistical publications to ensure that they stay relevant and timely. They identify requirements, prepare analytical reports and modify the current models. Sometimes, they are required to create new models to deal with new needs. Their dissemination of information process makes information broadly available and accessible to authorized parties. The information and presentations are always accurate, unbiased and reliable. It employs professional standards of methodologies in the surveys and implementation. Statistically sound procedures are used to compile information.

Before the final report is released, information is edited and proofread. If an error has been found, it is corrected and posted. Information is secured from unauthorized access to make sure it is not compromised. The Government Information Security Reform Act requires it to place policies and programs to secure its resources. If any sensitive information gets into the wrong hands, it may compromise a lot of people. It is vital to ensure very tight security of information (Finklea, 2009).

Ecommerce Merchants

The Internet provides anonymity, thus letting anyone access it from anywhere. It is a great thing and yet a bad one for e-commerce merchants. These merchants are involved in transactions with various people every day. Thus, they must practice some things to help reduce the rate of credit card frauds. Before considering utilizing payment gateways for your credit card transactions, it is important to inquire from the provider about their screening features. These gateway providers offer a protection to some degree. They compare billing details to those held by cardholders’ bank. Consider further screening strategies when using offline payment facilities. Consumers like privacy. Their credit card security lies in the hands of the merchants. The clients also value fast checkout processes. (Henderson, 2000) Keeping them too long with many questions may discourage them. Still, it is important to gather sufficient customer identity details during the process of ordering. Include information regarding the IP address of the individual placing the order in the order process. IP address is issued to a user each time they are logged on to the Internet by the Internet service provider. A unique identifier can be traced using free tools. Check if an order has a billing address of a location and the IP originates in another location.

This may indicate that it is a fraud. Fraudsters can forge an IP address. Search for a number of declined transactions at the time the order is made. There will be various names and cards within a few minutes, but with a common IP. This is because fraudsters use credit cards immediately after they obtain them. On the other hand, some cardholders cancel their cards early enough. Therefore, fraudsters may have to try many detail sets before finding one that is still active. Fraudsters use fake emails. Some online businesses insist on getting a customers’ ISP or business email address before processing an online order. They refuse primary point contacts that are free email address services (Finklea, 2009).

It is important to obtain a telephone contact number of the purchaser. They give out fake numbers. Check the phone details of the customer from the directory.  There are softwares that identify the exact origin of the fraudster. Overseas orders are risky but profitable. It is a high risk transaction. Once you get extremely large orders, do some further investigation, especially if the customer is new. Follow up by calling relevant credit card companies when in doubt.  High value items require photo identification. Visual anti-fraud policies minimize crime. It is important to use them on your site. Third party security and bold notices stating your position on fraud discourage some frauds. It will also demonstrate to the customers that security is taken seriously. Look for any other indicators of fraud and investigate them to get an accurate picture. E-commerce merchants need to join the fight to help protect their clients (Rapp, 1991).


Debit and credit card fraud takes place when someone’s credit or debit card information is used to obtain information without their authorization. Credit cards that use an embedded microchip make it more difficult for anyone else to access the data in the card. This chip technology has been tested and proven. They are becoming popular worldwide to enhance security. Investments and training on security networks continue to be made to monitor and investigate incidents that seem suspicious. Clients are protected from unauthorized use of their credit cards by their card providers. Law enforcement agencies are actively involved in protecting people from credit card frauds. Despite these efforts, there are precautions that credit card holders can take to reduce their risk of becoming a victim of fraud (Montage David, 2004).

How to Evade Credit Card Fraud

To avoid being a victim, here are further precautions people can follow to protect themselves: Make sure that you sign your credit and debit cards immediately they get to you. In addition, store and carry all your cards detached from your wallet. In case you lose your wallet, you will still have your credit cards with you. These cards can be carried in a small pouch, a zipped compartment or a business card holder. Another measure is to keep a record of all account numbers. Keep them together with their expiry dates. (Henderson, 1986) Noting them down and storing them ensures that in case of anything, you can countercheck them. Phone numbers and addresses of each company should be recorded and kept in a safe place. Do not lose them. Make sure you have an eye on your card during the time you are making the transaction. This is because someone may snatch it when you are not looking. Ensure that you get it back as soon as possible, too. You may forget it on the counter otherwise. (Maurer, 1974) It is good to void the receipts that are not correct and destroy all the carbons.

Another step is to keep the receipts well. You might need them to verify something later. Do not throw them away. Compare them with your bill when it arrives. Sometimes, you may experience overcharge or strange charges you did not make. Open your bills very punctually so that you can notice any problem in time. Bring together your accounts every month to see if all your purchases are the only bills you get. Report any questionable charges you notice to the authority and your card issuer in writing. (Kaminski, 2004) There are also things one should never do with a credit card. For instance, do not lend your card to anyone no matter how much you think they can be trusted. These people may get your information from it and misuse it. Also, do not leave it lying around unattended. Do not sign any vacant receipts. When you do sign one, draw a line throughout any empty space over the total. Never write your account number on the outside of an envelope. Never write it on a postcard either because anyone might access it.  In addition, do not give out your account number to anyone over the phone unless you are sure you are speaking to a company you already know is reputable and trust. If you are not sure about a company, check it out with your area consumer protection office or business bureau. If you ever lose your credit card, or realize that it has been stolen or lost, immediately call your issuer.

Many companies have toll-free numbers that deal with emergencies of this kind on a 24-hour basis. The minute you report the loss or theft, it means that you have no additional responsibility for unauthorized charges. (Swierczynski, 2003) You may be requested to sign a statement under an oath that you did not make the purchase in question, if you suspect scam.  Credit card scam on the Internet is increasing even more than the credit card fraud these days (Vesper, 2000).

It is more secure to enter a credit card number on a sheltered online order form than it is to give a credit card to a waiter at any restaurant nowadays. The waiter may write down your credit card number. The waiter may pretend to be you later. He/she may place orders using it on the phone. The tempo of fraudulent purchases made through cell phone is soaring than that of the credit fraud on the Internet. Still, it is advised to take safety measures when giving out any classified information (especially your credit card number). This can be over the Internet or through the phone.

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