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Data quality news

New type of credit card fraud hits banks

Sep 2 2008, 10:44 AM

Fraudsters are continually searching for new ways of defrauding both individuals and institutions by committing identity theft.

Recently, criminals have targeted credit card issuers by 'loading' cloned credit cards with cheque payments they know will bounce before quickly spending the credit and making off with their takings, according to ThisIsMoney.co.uk.

A Lloyds TSB spokeswoman explained: "An innocent person's credit card is cloned and the fraudster is unaware how much is owed on that card.

"So they go into a bank and use an old or fraudulently obtained cheque to put a substantial sum --perhaps £6,000 - on the card," she told the website.

"This can clear the balance - or reduce it or put it in credit - and the card can then be used."

Lloyds TSB has reportedly begun verifying the identity of every person paying a credit card bill that does not belong to them and this seems to be the best way of dealing with the problem.

Banks, retailers and individuals should always be vigilant when receiving payments by cheque or card, making sure that the person carrying out the transaction is actually the account owner by verifying their identity.

• Ensure ID verification with Experian QAS