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Victims of credit card fraud have tripled since 2013, and recent data continues to assert that this number is on the rise. Our increasingly digital age has made the nature of technological transactions all too easy, however, it has been accompanied by more sophisticated ways of obtaining our personal information.

When was the last time you were asked to show a photo ID accompanying a transaction with a credit card? As identity verification becomes less strict, and the frequency of credit card usage in society becomes the most popular method of payment, our awareness of threats to our financial security is imperative.

In fact, 40% of all financial fraud can be traced back to credit cards, which equates to $5.5 billion of fraudulence on an annual basis. Below are some of the most common types of credit card fraud techniques, as well as tactics on how to combat them.

THE PROBLEM: Phishing & Vishing                                                           

Data breeches, in the form of phishing, retrieve financial data through fake emails. These emails typically prompt the employee to enter their company login so the hacker can access their information. A newer system, called vishing, involves calling the employee to gather information through the phone. The hacker will disclose that there is fraudulent activity occurring on their account and insist that they provide their credit card information for verification.


Phishing emails often contain spelling errors. So, if “Omazon” is requesting your account information from you through email in exchange for a $10 credit, you’ll probably never see that voucher again and end up with mysterious transactions on your next statement. Don’t be afraid to use your firewall as a buffer between you and the hacker; in fact, having both a desktop and a network firewall can serve as double protection. Also, be wary of pop-up ads, and always click the “x” to exit the notification in the upper right-hand corner, as opposed to hitting the “Cancel” button.

 THE PROBLEM: Employee Refunding

Through the process of employee refunding, employees have the ability to wire refunds to their personal credit card instead of returning the money to the customer.

THE SOLUTION: Set the standard.

Including accountability in employees’ job description, and designing performance matrices based on ethical values is a preventative measure for combatting credit card fraud. Further, mandating the issuance of receipts to customers ensures all transactions are easily traceable should any discrepancies arise later. It is equally as important to consistently reconcile bank statements to ensure that nothing unusual is happening; should unusual transactions or unique reconciling items occur:  Investigate!

THE PROBLEM: Credit Card Cramming

Most individuals and businesses would not suspect fraudulent activity if it appeared in small amounts. This is the mindset that hackers have channeled through a method called cramming, where small, frequent transactions, ranging from $5-$50 are made on the card.

THE SOLUTION: Be skeptical.

Our eyes have been trained to identify large-scale activity when checking bank statements, when in fact, it is most effective to steal in small increments. Consumers often do not consider trivial transactions to be suspicious, but as this method of crime is on the rise, it is necessary that we evaluate all transactions with equal skepticism. Be sure to check your statements regularly. If you see an unknown transaction, notify your credit card company immediately – those $5 charges will start to add up.

Wanting to go the extra mile with credit card fraud prevention? Here are some quick and simple controls to ensure your account’s security:

  • Implement a segregation of duties plan for accountability purposes
  • Reconcile transactions daily
  • Spend big on a reliable malware and ransomware protection software
  • Archive any old data – do not leave it sitting on the server
  • Require a two-factor authentication when logging into any online banking or credit card accounts

Organizations fall victim to fraud most commonly due to the lack of a strong internal control system in place to prevent or detect such instances from occurring. For assistance in fraud prevention or detection, please contact Kristi Yanover, Audit Partner, at (858) 558-9200, or any member of our Accounting & Assurance Team.

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