Identification Methods and Business Preventive Measures for Credit Card Fraud

Pages: 6 (1831 words) Published: September 24, 2010
Introduction

This paper concentrates on identification methods and business preventive measures. Why do people fail to notice that credit fraud is a growing problem and what could continue if business and consumers stop believing the seriousness of credit card fraud? The Business community needs increased research and preventive controls that prevent credit and identity fraud. Unless changes are instituted fraud will continue to be a persistent problem. More than half of all adults have experienced some type of cybercrime, and more than one in 10 blames them self, according to a new survey commissioned by Symantec and conducted by independent market research firm Strategy One. Gentry, C.. (2008, June). Risk-less Business. The problem genuinely is a lack of education and training, by both the consumer and the business owner.

Consumers become victims of identity theft and fraud when without prior knowledge criminals acquire personal information. The criminals then commit fraud by purchasing items without the consumer’s knowledge and approval. Preventive measures utilized by both business owner and consumers will substantially reduce the possibility of Credit Card fraud. The frequency of credit fraud is creating an impact on sales and the growth in business. Based on federal trade commission reports more than half of the population has experienced credit fraud. The continued persistent of ignoring the credit fraud problem will lead to lower consumer confidence and the reduced productivity for business owners.

Main Body

Credit Card fraud is the most common type of fraud committed currently against consumers. Criminals pretend to be the victim; calling Credit Card Company’s and changes the victims mailing address on an active account. The necessary information needed for identity thieves is the credit card number, pin number and account number. The problem is the victim does not realize they just became a victim of credit fraud until it is too late. The business owner in much the same manner becomes a victim. Imagine coming to work and discovering $20,000 dollars worth of merchandise missing without any transactions being placed. On the same day $20,000 dollars worth of inventory is sold and shipped to customers that never made transactions. After several months the customer disappears, and now the business owner assumes the customer is claiming insolvency. If the criminals are good and can cover their tracks the business owner thinks it is just insolvency. Not realizing the criminal had no intentions of paying, the business owner chalks it up to bad business and writes it off. The business owner never reports the criminal activity to the authorities. Both credit fraud scenarios and schemes described above cost consumers and business owners thousands of dollars annually. The most commonly applied tactic that criminals use is to open a new credit card account in the victim's name. This is referred to as identity theft. Once the new account is established the new bills are forwarded to the new address, the victim does not realize a problem exists until it is too late. The criminals use credit cards buying items and then never intending on paying the bills, this in turn ruins the victim’s credit.

Criminals need certain types of information to commit identity theft, with as little as a stolen name, date of birth, and social security number, the identity thief can rack up several thousands of dollars causing major damage. Working together both the consumer and business owner can aid each other in credit fraud prevention.

Utilizing education initiated from the card issuers cover topics such as free credit reporting, safe computing, fraud alerts and network and computer security as well as initiatives from Visa and Master Card Payment Card Industry Standards, consumers and business owners are starting to fight back against credit...

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