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Credit Card fraud is an ever-present threat in today’s digital world. As technology evolves, so do the methods used
by fraudsters to exploit vulnerabilities. Understanding Credit Card fraud detection is crucial for both cardholders
and merchants to protect their finances.
Understanding Credit Card fraud detection
Credit Card fraud detection involves identifying and preventing unauthorised use of your Credit Card . This process uses
various tools and techniques to monitor transactions, flag suspicious activities and prevent fraudsters from
succeeding.
Working on Credit Card fraud detection
Systems used by card networks
Card networks like Visa, Mastercard and American Express use sophisticated algorithms and machine-learning techniques
to monitor transactions in real-time. They analyse data points such as transaction amounts, merchant locations and
spending patterns.
Systems used by card providers
Card providers, like banks and financial institutions, integrate with card networks' tools and add security layers
tailored to their customers.
For example, Axis Bank's proprietary Credit Card fraud detection system monitors unusual spending
behaviour, such as high-value purchases or multiple transactions in a short period. They also use multi-factor
authentication (MFA) requiring identity verification.
Common types of Credit Card fraud detection
Staying vigilant and using your bank’s security tools can help you identify and respond to Credit Card fraud
effectively. Here is what you should look for:
1. Monitor statements: Regularly review your Credit Card statements for unknown transactions, even
small ones. Fraudsters often test cards with minor charges before larger purchases.
2. Set up alerts: Enable transaction notifications to get real-time updates on charges, allowing you
to quickly spot anything unusual.
3. Track your spending patterns: Familiarise yourself with your usual spending. Fraudulent charges
often stand out as odd purchases at unexpected times or locations.
4. Beware of phishing: Be cautious of messages or calls asking for personal details. Verify any
unusual request with your bank directly.
5. Check for duplicates: Unexplained repeat charges could indicate fraud.
Common types of Credit Card fraud detection
Staying vigilant and using your bank’s security tools can help you identify and respond to Credit Card fraud
effectively. Here is what you should look for:
- Monitor statements: Regularly review your Credit Card statements for unknown transactions, even small
ones. Fraudsters often test cards with minor charges before larger purchases.
- Set up alerts: Enable transaction notifications to get real-time updates on charges, allowing you to
quickly spot anything unusual.
- Track your spending patterns: Familiarise yourself with your usual spending. Fraudulent charges often
stand out as odd purchases at unexpected times or locations.
- Beware of phishing: Be cautious of messages or calls asking for personal details. Verify any unusual
request with your bank directly.
- Check for duplicates: Unexplained repeat charges could indicate fraud.
Credit Card fraud detection security features
Tools for cardholders
Cardholders can utilise alerts and notifications to spot unauthorised usage quickly, as well as card controls to
block cards, set spending limits and restrict transactions geographically. Two-factor authentication (2FA), such as
one-time passwords (OTPs) sent to your phone, adds an extra layer of security.
Tools for merchants
Merchants can use the Address Verification Service (AVS) to match the billing address with the card issuer’s records,
3D Secure (3DS) for an additional layer of online transaction security, and the Card Verification Value (CVV) to verify that the
purchaser has the physical card in hand.
How do fraudsters get Credit Card numbers?
Theft
Fraudsters physically steal wallets and Credit Cards, allowing them to make purchases until the card is reported
stolen.
Skimming and cloning
Skimmers capture card information from the magnetic strip, which cloners use to create duplicate cards.
Account takeover
Hackers gain access to your Credit Card account through email or online banking, change your contact details and make
purchases.
Phishing and social engineering
Phishing tricks you into providing card details via fake emails, websites or calls, while social engineering
manipulates you into revealing confidential information.
Wrapping up
By understanding and utilising advanced credit fraud detection systems, you can significantly
enhance your financial security. Knowing what is Credit Card fraud detection and leveraging Axis
Bank's comprehensive mechanisms, including real-time monitoring and multi-factor authentication, offer robust
protection against fraudulent activities on Credit Cards.
Also Read: 8 best security tips for your Credit Cards
FAQs
How long does it take to detect Credit Card fraud?
Detection time varies, but advanced Credit Card fraud detection systems can flag suspicious
transactions in real-time. Some activities may take longer if they mimic legitimate spending patterns.
Can Credit Card fraud be traced?
Yes, Credit Card fraud can often be traced using tools and techniques by law enforcement and banks,
though success depends on fraud complexity and reporting speed.
Who is liable for Credit Card fraud?
Liability typically falls on the card issuer if the cardholder reports the fraud promptly and hasn't been negligent.
How can Credit Card fraud impact my credit?
Credit Card fraud can damage your credit score if not promptly addressed, leading to increased debt
and missed payments. You should regularly monitor your statements and report discrepancies.
Disclaimer: This article is for information purpose only. The views expressed in this article
are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd.
and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader
for taking any financial decisions based on the contents and information. Please consult your financial advisor
before making any financial decision.
