Credit Fraud Overviwe Analysis and Recommendations Essay

Credit Fraud Overviwe Analysis and Recommendations Essay

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Credit card fraud is a significant problem in the U.S. with losses exceeding $5.718 billion annually (Sullivan, 2010). Perpetrators are continually developing new methods to circumvent established and evolving fraud prevention controls. With economic expansion continuing its advance into the digital era and electronic forms of payments increasingly common, the problem of credit card fraud is likely to increase. Internet-based credit card fraud is nearly 15 times higher than in person transactions (Bhatla, Prabhu & Dua, 2003). Advances in investigative methods, legislation, and technology innovations are required to combat this broadening problem.
Credit card fraud creates an alluring and exploitable opportunity for a subset of unethical individuals to engage in illicit activities. Credit card fraud is a serious crime, often with links to other serious felonies such as organized crime, international narcotics trafficking, and terrorist financing (Sanjeev, 2009). It is not a localized incident impacting a single victim, but rather a global problem that is costly to all members of society. As the costs of fraud are spread across banks, merchants, and consumers, the threat is directed towards economic degradation and collapse (Sullivan, 2008).
It is suggested that inadequate fraud controls and outdated technology create an environment for credit card fraud to prosper. This research outlines the most common types of credit card fraud and recommendations for preventing fraudulent activity. Several case studies illustrating the different types of credit card frauds are analyzed, and a review into technological weaknesses and common fraud investigative techniques are discussed to raise awareness for financial institutions and fr...


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...2009). Credit card fraud detection with discrete choice models and misclassified transactions. (Unpublished MBA Thesis). University of Chicago, Chicago, IL.

Pun, J., Lawryshyn, Y. (2012). Improving credit card fraud detection using a meta-classification strategy. International Journal of Computer Applications, 56(10), 41-46.

Sullivan, R. (2008). Can smart cards reduce payments fraud and identity theft. Economic Review, Retrieved from http://go.galegroup.com.ezproxy.fau.edu/ps/i.do?id=GALE %7CA189486001&v=2.1&u=gale15691&it=r&p=
AONE&sw=w&asid =a865ca9611d1b6fa06e56dbd7f68560f

Sullivan, R. (2010). The changing nature of U.S. card payment fraud: industry and public policy options. Economic Review. Retrieved from: http://go.galegroup.com.ezproxy.fau.edu/ps/i.do?id=GALE %7CA233963353&v=2.1&u=gale15691&it=r&p=AONE&sw=w&asid =61ce05cd2368e9b68cbaa4281d3d32ec

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