A
credit card has been defined as a payment card, the holder of which is
permitted under his contract with the issuer of the card to discharge less than
the whole of any outstanding balance on his payment card account on or before
the expiry of a specified period, subject to any contractual requirements with
respect to minimum or fixed amount of payments.
The
card permits the holder to obtain credit up to a stated maximum amount from the
issuer upon the card's presentation to a merchant. The card issuer sends the
card holder periodic statements (usually monthly) describing the purchases
made. The cardholder may settle the indebtedness without interest by paying the
entire amount on receipt of the statement or the cardholder may settle the
indebtedness by installments, paying interest on the outstanding amount.
Credit
card fraud is a wide-ranging term for theft and fraud committed using a credit
card or any similar payment mechanism as a fraudulent source of funds in a
transaction. The purpose may be to obtain goods without paying, or to obtain
unauthorized funds from an account. Credit card fraud is also an adjunct to
identity theft.
We
may define credit card fraud as-
"When
an individual uses another individuals' credit card for personal reasons while
the owner of the card and the card issuer are not aware of the fact that the
card is being used. Further, the individual using the card has no connection
with the cardholder or issuer, and has no intention of either contacting the
owner of the card or making repayments for the purchases made".
Transactions
completed with credit cards seem to become more and more popular with the
introduction of online shopping and banking. Correspondingly, the number of
credit card frauds has also increased with the introduction of newer
technology. From embossers to encoders to decoders, credit card counterfeiters
are now using the latest technology to read, change, and implant magnetic
information on counterfeit credit cards.
Credit
card frauds are committed in the following ways-
(1)
An act of criminal deception (mislead
with intent) by use of unauthorized account and/or personal information.
(2)
Illegal or unauthorized use of account
for personal gain.
(3)
Misrepresentation of account information
to obtain goods and/or services.
Courtesy:-
Legal Point Foundation
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