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Bank card fraud

Bank card fraud happens when criminals steal an individual’s cards and gain access to funds in their account.​

The main aim of the fraud is to obtain the individual’s physical payment card and PIN to use in a face-to-face or Point of Sale (POS) environment. Alternatively, the criminal commits bank card fraud in order to obtain payment card data to use in an e-commerce or ​card not present (CNP) environment. Examples of CNP environments include internet shopping, mail order, or phone ordering. ​

Bank card fraud is committed in the following ways:

  • At cash machines​
  • Using stolen cards to purchase goods
  • By using a counterfeit/fake card

ATM fraud

The table below describes the main ways in which bank card fraud at cash machines is committed.

Entrapment devices Entrapment devices are inserted into a cash machine’s card slot to retain the card inside the machine.​ The criminal then tricks the victim into re-entering their PIN while the criminal watches. Once the cardholder gives up and leaves, the criminal removes the device with the card and subsequently withdraws the cash.
Skimming devices Skimming devices are attached to the cash machine to record the details from the magnetic stripe of a card while a miniature camera captures the PIN being entered. A fake magnetic stripe card is then produced and used with the genuine PIN to withdraw cash at machines overseas, which have yet to be upgraded to Chip and PIN.
Shoulder surfing Criminals watch the cardholder entering their PIN, then steal the card using distraction techniques or pickpocketing.

Card not present fraud

This is a fraud that is committed where the perpetrator does not have access to the victim’s card. It takes place as follows:

A schematic mapping the events when perpetrators access a victim's card. 1 - Criminal obtains victim's information without bank card (Source of information: Discarded receipts & Discarded bank statements). 2 - Information used for online purchases or purchases over the phone. 3 - Victim's are charged for purchase they never made!

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Lost or stolen card fraud

A card can be stolen by pickpocketing after the thief observes the PIN code being entered by the genuine cardholder at an ATM or POS terminal. ​

Lost and stolen cards can be used in shops that do not have chip and PIN​ to commit a fraudulent telephone, internet or mail order transaction​, or for contactless payments where a cardholder pin is not required. If the PIN is also obtained, the card could be used in a shop or at a cash machine.​

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This article is from the free online course:

Fraud Investigation: Making a Difference

Coventry University