Three types of fraud
Fraud in payment cards can be defined as the use of a card by a person who is not the legitimate holder. There are three cases:
- The use by a third party of a lost or stolen card;
- Card counterfeiting;
- The use of the card’s identifiers (number, expiry date, etc.), by a person other than the cardholder and with the holder still in possession of their card. This type of fraud concerns remote sales.
Cases of counterfeiting concern the card’s magnetic track. Reproduction of the track can allow fraudulent use in countries where smartcard technology is not used. Copying the magnetic track – either by a malicious person or through a system placed on the payment terminal or the ATM – is known as "skimming".