An easy and short definition of small business credit card fraud states that it is a fraudulent transaction that is conducted by stolen small business credit card or stolen card information. Such fraud usually results in illegitimate purchase of goods and services.
A sophisticated definition of small business credit card fraud defines it (sometimes referred as Credit Fraud) as an illegitimate operation using personal or small business credit cards or card information that is used for paying for the fraudulent transaction. The ultimate objective of such transaction is buying products without actually paying for them or illegally transferring funds to the account.
If you think that you are a victim of small business credit card fraud, the first thing you should do is report to your card issuer and even block your card, if necessary.
In USA out of $1 trillion that consumers have available on their cards only $2-3 billion is estimated to be fraud loss. This makes a tiny fraction of one percent that may seem that alarming. However the consequences of fraud may be extremely disturbing for the victims. Although in USA victims are insured towards financial loses, however the costs are the inconvenience, higher interest rates and fees by which banks cover losses.
There are several ways how credit thieves get access to victim’s account to get engaged in credit fraud and use available cash for fraudulent purposes. Card thieves can:
1. Steal victim’s card (including stealing from the mail box)
2. Stealing victim’s credit card information (looking over the shoulder, examining victim’s trash, looking at personnel records in an organization)
3. Taking over victim’s account (through false e-mail, unauthorized telephone conversation)
Internet is a main source of credit fraud. When a customer makes a purchase through Internet, a sales person does not have possibility to physically inspect the small business credit card; therefore he/she relies on provision of credit card information by mail, phone or online form. This creates a fertile ground for credit fraud, since delivery companies are not required to check identification of the receiver of the good. The only thing that merchant can do is that he/she may require delivery of goods to the address approved by cardholder. Besides small transactions are not controlled if fraudulent transactions are conducted carefully, their detection becomes less likely.
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Article Source: http://www.articlesbase.com/personal-finance-articles/small-business-credit-card-fraud-1270097.html
About the Author: Elliot Clark, Owner of blogs on Apply for Business Credit Cards and Easy Approval Credit Cards, Buy Prepaid Credit Card