Glossary: Credit card fraud
Credit cardholders can be defrauded in a number of ways: “skimming”, when someone copies the data from your card’s magnetic strip onto another card without your knowledge (in shops, bars and restaurants); stolen or lost cards being used by thieves; and postal interceptions where the card the bank sends you never gets delivered. Another way is through identity fraud, where criminals get hold of a utility bill, a bank statement or some other form of personal information so that they can take out credit cards, loans or mortgages in your name.
The illegal copying of information from the magnetic strip of a credit or debit card by “skimming” it through a rogue card reader out of sight of the cardholder or attached to an ATM machine. Skimming is a more direct version of a phishing scam. Once scammers have skimmed the card, they can create a fake or “cloned” card with the cardholder’s details on it and can then run up charges on the account, borrow money or take out loans in the cardholder’s name and use the details to commit identity fraud.