Last updated: 23/07/2020 | Estimated Reading Time: 3 minutes
Credit card fraud
Credit card fraud has historically been a big problem, though the implementation of chip and pin systems, the level of security associated with cards has improved significantly.
However, there are still various ways in which criminals can scam people and credit card companies out of vast sums of money.
We’ll go through some of the biggest credit card scams in history, and help you avoid being the victim of anything similar in this guide to credit card fraud.
In This Guide:
History's biggest scams
Here we’ll take a look at two of the most lucrative credit card scams in the past in both the UK and the USA before going over your rights when it comes to credit card fraud and the steps you can take to keep your money secure.
UK - £17 million
The biggest instance of credit card fraud in the UK occurred in the mid-2000s when a gang of eastern European criminals used the stolen and cloned details of 32,000 credit cards to illegally acquire more than £17 million.
Over the course of a few years, they stole the money and transferred it to various accounts based in various different countries before being arrested and imprisoned in 2007.
They were ultimately caught when one member of the gang was investigated as part of a routine anti-terror check. The investigating police officer’s suspicions were raised and when they looked further into the man they unravelled a wide scale fraudulent operation.
USA - $200 million
The biggest credit card scam to occur in the USA dwarfs the UK’s by quite a large amount. The scam, which was eventually foiled in 2013, involved and 18-strong gang of criminals based in New York who stole a total of $200 million dollars. They used the profits to live a life of opulence and luxury, buying holidays and expensive cars as well as large amounts of gold.
Their scheme was a relatively complex one that involved the creation of several false identities. They then employed underground agencies to create perfect credit histories for their falsified identities so that they could apply for high limit credit cards and high value loans.
The money acquired was laundered through a combination of fake and unscrupulous real businesses and transferred to accounts based all over the world.
Credit card security and your rights
Thankfully, credit card fraud is now more difficult than ever and since more and more security measures have been implemented, the number of incidents has gone steadily down.
Chip and pin security systems play a big part in this, as well as the fact that the authorities are now much more vigilant and active than they have been in the past.
In the UK, credit card holders have various rights and measures in place to protect them against fraud and entitling victims to refunds.
Section 75 of the Consumer Credit Act means that if you are the victim of a scam by a rogue trader then both the trader and your credit card issuer are legally considered liable. This means that any money lost as a result of such a scam should be refunded to you by the credit card company.
The Payment Services Regulations introduced in 2009 work to the same end, insuring you against any unauthorised transactions that your card is used for and requiring the card issuer to offer you a refund.
