Identity Theft (Stolen Cards )

Stealing someone’s card online is essentially identity theft. Identity theft involves a fraudster stealing someone’s personal details, such as their name, social security number, credit card number, or any other sensitive info, and using it to make purchases in their name.

Around two-thirds of remote card fraud is due to card details theft. In the first half of 2023, it accounted for 64% of remotely initiated card fraud volume, according to European Union.

There are several ways that identity thieves can obtain this personal information:

• Phishing scams – fraudsters use emails, texts, or social media messages to trick people into providing personal information or clicking on a link that installs malware on their computer.
• Hacking – a company’s computer systems are hacked into and the thief steals sensitive information.
• Social engineering – fraudsters win someone’s trust and then con them into giving up personal information, either over the phone or in person.
• Card skimming – fraudsters place small devices on card readers to steal credit card information when a card is swiped.
• Searching through your trash – criminals search through trash or recycling bins to find personal information that they can exploit.

The loss to the customer is clear, but what about businesses? Firstly, you’re likely to have to refund the purchase and incur any resulting chargeback costs. In addition to these refund and chargeback costs, you could also incur severe financial penalties if your chargeback ratio exceeds the card scheme limits for consecutive months.

You may also suffer reputational damage if the customer holds you responsible for not protecting their personal information. At best this risks putting off new or returning customers, but at worst, this could lead to lawsuits and fines for falling foul of compliance regulations.