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On this page
  • Counterfeit payment cards
  • Identity Theft
  • Best practices to navigate these frauds
  1. Guides
  2. Security

Beware of these common frauds while using payment cards

PreviousMoney muling scams: What are they and how can you avoid them?NextTutorials

Last updated 1 year ago

  • $32 billion - This is the total funds lost due to global payment card fraud in 2021 (Nilson Report).

  • The United States accounted for almost $12 billion of this total.

  • $397 billion - This is the global loss projection for the next decade.

Fraud-induced losses were incurred by card issuers, merchants, payment processors for merchant transactions, and processors for card transactions made at ATMs.

Financial transactions have expanded exponentially in the modern digital age, where convenience meets innovation. However, with progress comes a new breed of challenges and in this case, the rise of common frauds that target unsuspecting individuals. Let's explore the deceitful methods fraudsters use and arm ourselves with best practices to avoid such frauds.

Counterfeit payment cards

Counterfeit payment cards have become a significant problem. Sophisticated fraudsters can duplicate the card's magnetic stripe, rendering it vulnerable to fraudulent transactions. Unfortunately, these transactions can occur in countries and territories where chip card technology is unavailable, making them a prime target for counterfeiters. Skimming is one of the most common methods fraudsters use to obtain this information. It occurs in various situations, including when paying in a shopping establishment where someone may take your debit card or use an electronic device placed on a Point of Sale (POS) terminal or ATM.

Read about skimming in detail in our blog

Identity Theft

Identity theft is another growing concern that has become increasingly common with the rise of counterfeit payment cards. In most cases, fraudsters attempt to obtain debit card details, such as the card's number, expiration date, and security code. Once they have this information, they can use it to make fraudulent transactions, even if the account owner still has their card. This can occur in various settings, including shops, restaurants and online purchases; where the user must provide their credentials via phone or online.

Best practices to navigate these frauds

To ensure the safety of your financial information, it is crucial to protect your confidential code. Here are some best practices to follow:

  1. Never share your confidential code: Your code is unique to you, and you should never disclose it to anyone, including friends, colleagues, or family members.

  2. Learn it by heart - don't write it down: Storing your confidential code on paper or your phone is an open invitation for fraudsters to steal your information. Instead, memorise your code and avoid it falling into the wrong hands.

  3. If you forget it, ask your bank to reissue it: It's common to forget things and your confidential code is no exception. If you find yourself struggling to remember it, don't worry. Contact your bank to reissue a new code for you.

  4. Be aware of your surroundings: Ensure card safety by staying vigilant while using an ATM and reporting any suspicious behaviour, including card insertion or keypad tampering, to your bank. Avoid distraction tactics from strangers when conducting transactions and promptly retrieve any swallowed cards at your branch or block it immediately.

Today online shopping has become the norm rather than the exception. With the increasing dependence on online transactions, exercising caution when using your payment cards in the digital world is essential. To ensure secure online transactions, you must follow certain practices to safeguard your sensitive payment information from hackers and other cybercriminals.

Ensuring Secure Online Shopping:

  • Only enter card information on secure websites.

  • Check for "https" at the start of the website address.

  • Look for a green padlock symbol near the address bar.

Enhancing User Security with 3D Secure:

  • Some e-commerce sites use 3D Secure for added protection.

  • 3D Secure verifies cardholder identity during purchase.

  • Reduces chances of fraudulent transactions.

Dealing with Unauthorised Transactions:

  • Contact your bank immediately if you get a verification code for an unknown transaction.

  • Block your card to prevent further fraudulent activity.

Beware of Phishing Tactics:

  • Never share banking details, even if emails seem legitimate.

  • Fraudsters use phishing to gather sensitive info.

  • Verify online transactions and email requests for authenticity.

Scallop delivers unparalleled user experience ranks among our top priorities. In addition, safeguarding our users' funds from potential threats of malicious activities remains a critical aspect of our operations. For that reason, we continuously provide valuable insights to better equip our users with practical tips and tricks that allow them to navigate the ever-evolving financial world easily and confidently.

Stay tuned for more updates.

Skimming of Credit and Debit Cards: What You Need to Know