In credit card fraud cases, the victims are not liable for any losses based on the fraudulent charges on their accounts, while merchants are held liable for losses from fraudulent purchases at their businesses. Credit card companies are not held liable for the losses incurred in fraudulent credit card transactions, according to credit card fraud laws, but some credit card companies offer services such as Verified by Visa and MasterCard SecureCode.

 

 

These services essentially will protect merchants from chargeback liability, as long as customers to those merchants provide additional information when purchasing products from the merchant in question.

 

 

But the role that credit card companies play in the overall issue of credit card fraud is more complex than described above, simply because credit card companies have interests which are somewhat unexpected. For credit card companies, sometimes performing a fraud investigation costs more money than just paying for damages and moving on; as a result, sometimes a fraud investigation will never be enacted.

 

 

Furthermore, under American credit card fraud laws, merchants are the ones who must pay for damages, thereby making it all the less costly for credit card companies to simply move forward without additional fraud investigation. The result is that the credit card companies are fairly detached from any real consequences of credit card fraud.

 

 

Merchants have attempted to change credit card fraud laws, such that the credit card companies themselves would become more liable for the charges, while merchants would have some of the liability lifted from them. If this were the case, then it would likely become significantly more profitable for credit card companies to launch a civil fraud investigation whenever credit card fraud was committed, such that it could be rooted out and prevented in the future.

 

 

Furthermore, such a change would also take the considerable burden of liability off of merchants. Credit card companies have strongly opposed these changes, however, somewhat unsurprisingly, as credit card fraud laws in their current form strongly favor credit card companies themselves.

 

 

This meshes with the general reluctance of credit card companies in fully and quickly removing all fraudulent debts and charges from the accounts of credit card fraud victims, even though credit card fraud laws indicate that victims cannot be held at all liable for such charges, and all debts should be removed from the victims' accounts. Credit card companies in general have a motivation oriented primarily towards making money, and they do not gain anything from quickly removing the fraudulent charges from victims' accounts.

 

 

Additionally, in the case of entire new fraudulent accounts being created by fraudsters, credit card companies are often highly resistant to attempts by the victim to have the charges removed from their credit score and having the fraudulent account closed, again in opposition to credit card fraud laws which favor the victims in these situations.

 

 

The reason in general is that credit companies do not profit much from doing so, regardless of whether or not they are supposed to conform with credit card fraud laws. If credit card companies had a more vested monetary interest in such issues, because they were held liable in credit card fraud cases, then it is entirely likely that credit card companies would be much more active in fraud investigation and reparation. 

 

Credit card fraud inherently results in a number of charges and payments which have been made fraudulently. These transactions must be resolved in some fashion, especially because the fraudulent nature of payment for most of the transactions means that it is more likely that there is no actual source of money for the charges that have been fraudulently placed on a credit card.

In order to deal with credit card fraud, then, laws had to be clearly set into place in order to determine to where credit card fraud penalties would fall, whether it be upon the victim of the credit card fraud, the merchant who performed transactions with the fraudster, or the credit card company responsible for issuing the card used in the fraudulent purchases.

The obvious target for credit card fraud penalties would be the fraudster him or herself; after all, without the fraudster’s manipulations these penalties would not have been incurred at all. But most of the time, the fraudster will not have the ability to pay the credit card fraud penalties, and therefore this option becomes closed off as a viable route; though the fraudster could still be charged with the penalties, it is very likely that he or she would have incurred so many such penalties from so many different sources that charging him so would essentially be a show, as opposed to any kind of substantive action.

The fraudster will still encounter criminal credit card fraud penalties for his crime, of course, and will find himself still facing a fine and jail time, most likely; but redressing the fraudulent charges of the fraudster will still require different action.

Credit card fraud, then, shows itself as remarkably damaging to all involved parties, in that debt is incurred for which no party should reasonably be held accountable. Nonetheless, however, this debt must be taken care of, and credit card fraud law assigns it primarily to the merchant involved in the fraudulent transactions.

As far as the idea of credit card fraud penalties goes, there is a certain amount of justification between this choice, as the merchant involved in the fraudulent transaction did not have stringent enough security measures to detect the fraudulent credit card; as a result, it is the merchant who should be held liable for the monetary credit card fraud penalties. But it is a very costly thing for merchants to have to deal with such monetary penalties, and in the end, placing these penalties upon merchants may not serve the public terribly well.

The debts left over to be dealt with after a credit card fraud are part of the reason why the crime is considered so seriously, and yet the criminal credit card fraud penalties facing a fraudster do not necessarily seem to match up to the severity of the consequences of credit card fraud. It is this disconnect between the severity of the credit card fraud penalties facing the fraudster himself, and the credit card fraud penalties facing the innocent parties, that most leads to outrage regarding this crime.

The best way to deal with credit card fraud is to avoid fraud from the get-go, because once you have become the victim of credit card fraud, you will encounter vast difficulty in fully escaping from the damage wrought by the fraud. To avoid fraud, then, you should keep in mind certain important principles based around the central concept of reducing the risk of credit card fraud as much as possible.  

 

 

Essentially, the primary principle of protecting yourself from credit card fraud is to protect your personal information to the best of your ability. You avoid fraud in this fashion by ensuring that all documents which might have any amount of significant information in them are properly destroyed before you dispose of them, for example. Shredding utility bills and bank statements will go a long way towards ensuring that your personal information will never be available for use in credit card fraud.

 

 

You will also want to shred any credit card applications that come your way to additionally help avoid fraud. Keeping close track of your actual, physical credit card will help to ensure that you will never become a victim of credit card fraud, as one of the primary sources for such fraud is simply stolen credit cards. This also carries over to simply using your physical credit card; to avoid fraud, you should try to shield the number from view so that people around you can't surreptitiously copy it down.

 

 

Furthermore, you should only carry one or two credit cards on you at a time; carrying more than that is very likely to cause problems, should the cards be stolen. If you ever find the card missing, then you can avoid fraud by quickly alerting the necessary authorities, ensuring that your credit card is shut down before any fraudsters can use it. 

 

 

Online fraud can bypass some of these more physical protective measures, but still, keeping track of your own information and reducing its proliferation is a good strategy to avoid fraud in general. Do not, for instance, give out your credit card information to anything less than a trusted source. Never give it out over the phone, and don't give it out to a request for it over email.

 

 

Finally, avoid online fraud by not giving out your information over non-secure websites (normally, you will be alerted if a website is secure or not, and if you're unsure, don't give out your credit card information). Being careful about to whom and when you give out your credit card number will go a long way towards helping you avoid fraud.

 

 

Simply increasing and maintaining your own awareness of your finances can help out in your struggle to avoid fraud. Keep track of your receipts in a safe place, so that you can check them against your charges later, to make sure everything is correct. Monitoring your own credit card statements closely and promptly, for example, will help you to notice if any strange action occurs, if any transactions do not fit your own records. With such knowledge, you will be able to avoid fraud outright and, if not, at least minimize its damage.