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The first type of credit card fraud to be identified by this paper is Application Fraud, where an individual will falsify an application to acquire a credit card. Application fraud can be split into assumed identity, where an individual pretends to be someone else; and financial fraud, where an individual gives false information about his or her financial status to acquire credit. This investigation then goes on to look at Intercept Fraud, where a card is applied for legitimately, but is stolen from the post service before it reaches its final destination. There is also the illegal use of Lost and Stolen Cards, which makes up a significant area of credit card fraud.
There are then the more sophisticated credit card fraudsters, starting with those who produce Fake and Doctored Cards, there are also those who use Skimming to commit fraud. This is where the information held on either the magnetic strip on the back of the credit card, or the data stored on the smart chip is copied from one card to another. Site Cloning and False Merchant Sites on the Internet are becoming a popular method of fraud for many criminals with a competent ability for hacking. Such sites are designed to get people to hand over their credit card details without realising they have been scammed. Triangulation is also a new phenomenon. Triangulation is when a merchant offers a product at a very cheap price through a web-site. When a customer seeks to buy the product the merchant tells to customer to pay via email once the item is delivered. The merchant uses a fraudulent card number to purchase the product from a Web site and sends the product to the consumer, who then sends the merchant his or her credit card details via email. The merchant goes on operating in this way using the credit card numbers that have been sent from the consumers to purchase products, appearing for a short time to be a legitimate merchant before he or she closes the Web site and starts a new one. There is also the more sophisticated fraudsters, who use Credit Card Generators; computer emulation software that creates valid credit card numbers and expiry dates. These generators are highly reliable at creating valid credit card details and are available for free download off the internet. Making them available to many individuals who run fraudulent operations.