CNP fraud basically implies that the card holder’s details are used
without his knowledge, for a transaction. The transaction can happen online or
at a merchant location, without his knowledge of the card being invalid.
1. Presence of the
card holder or card
The card can be used to do an illegal transaction without the actual possession
of the card and only its details. The customer finds out about it only when he
sees the charge in the monthly statement.
2. Online CNP
transactions
Such transactions generally take place virtually, where the criminals
have got hold of these details through a call centre or via mail. The merchant
could be a high risk merchant, releases the goods or services without
realizing that the card has not been authorized by the holder.
3. Two categories
US law has set a limit for losses incurred by a consumer towards credit
card fraud at $50. For the purpose of deciding as to who should bear the losses
of an unauthorized credit card transaction, two main categories have been
formed-
·
Cases where the card is actually presented
·
Card not presented and used over the net or on the phone
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