What Is Carding?
Carding is a form of fraud where stolen credit or debit card information is used to charge prepaid cards, purchase gift cards, or assist other financial scams. Stolen cards can be exploited to buy store-branded gift cards, which can then be resold or used to purchase items that can be further converted to cash. Additionally, stolen card information can be sold to other criminals. Individuals who engage in this illegal activity are commonly known as “carders.”
Key Takeaways
- Carding is a method by which a third party attacks an individual’s financial information.
- Carding forums serve as online venues for exchanging stolen credit and debit card information and criminal techniques.
- Advanced technologies such as CVVs, CAPTCHA, and multifactor authentication provide enhanced protection against carders.
How Carding Works
Carding generally begins with a hacker breaching a store’s or website’s credit card processing system, gaining access to a list of recently-used credit or debit card numbers. These breaches exploit weaknesses in cybersecurity measures designed to protect card information. Card information can also be captured through physical methods such as scanners copying data from magnetic strips.
Hackers might further compromise accounts by accessing other personal identifiers such as bank accounts. The stolen list of credit or debit card information is then sold to a carder— an individual who uses this information for further fraudulent purchases, often buying gift cards.
Carding forums are popular among fraudsters for buying and selling stolen credit and debit card details, and for money laundering activities.
While PINs and chip technology have complicated the usage of stolen cards in physical transactions, card-not-present sales persist as a focal point for carders, facilitated by online carding forums.
Credit card companies normally offer protection against fraudulent charges. However, carders frequently execute their transactions swiftly, buying high-value items such as electronics that can be sold anonymously online or through other means.
Part of the carding process includes testing stealing cards to check their validity before proceeding with larger fraud. This often includes attempts to make small-scale online purchases to see if the card details are still accepted.
Terminology
Carding encompasses its unique jargon. Below are some common terms.
Fullz
“Fullz” refers to a comprehensive package of someone’s personal information used for identity theft and financial fraud. It stands for “full information,” including name, address, and identification details.
Credit Card Dump
A “credit card dump” is a digital replication of a credit card carried out by physical copy or digital hacking, often aiming to replicate multiple credit cards in bulk—sometimes impacting millions.
How Companies Prevent Carding Fraud
To combat carding fraud, companies employ several techniques to protect financial information better. Some noteworthy methods include:
Address Verification System (AVS)
AVS compares billing addresses provided at online checkouts with those on record with credit card issuers. The verification results inform merchants whether the transaction should proceed, by matching as closely as possible billing information with the card issuer’s records.
IP Geolocation Check
This system juxtaposes the user’s IP address with the billing address entered, flagging discrepancies for further validation.
Card Verification Value (CVV)
CVV codes are three- or four-digit numbers on credit cards used for enhancing security during card-not-present transactions, certifying the physical possession of the card during off-location purchases.
Multifactor Authentication (MFA)
MFA incorporates multiple authentication methods, independently validating user credentials, making unauthorized access more challenging. This method can utilize biometrics, tokens, or dual passwords as layers of verification.
CAPTCHA
CAPTCHA functions through challenge-response tests that distinguish humans from bots, adding a layer of security by requiring users to identify specific patterns or objects in images.
Velocity Checks
Velocity checks restrict rapid, multiple transaction attempts by tracking the frequency and volume of consecutive transactions from the same card or user within a set timeframe, flagging suspicious velocity patterns.
Carding FAQs
What Is a Credit Card Skimmer?
A credit card skimmer is a fraudulent device inserted into legitimate point-of-sale or ATM machines, illicitly copying data from swiped cards.
How Do Criminals Steal Credit Card Information?
Criminals retrieve credit card information using skimmers, phishing attempts, data breaches, and buying information from forums dedicated to carding.
What Is a Carding Attack?
A carding attack involves the attempt of placing multiple rapid and fraudulent orders online, identifiable by sudden surges in transactions originating with illicit intentions.
How Can You Protect Yourself from Carding?
To safeguard against carding, sellers should adopt the latest fraud prevention strategies like CVV validation and CAPTCHA checks. Cardholders must stay vigilant, scrutinizing payment terminals for tampering signs and regularly monitoring their financial statements.
The Bottom Line
Carding fraud supersedes basic financial theft, usually encompassing steps toward laundering money and illegal resale of high-value items secured via fraudulent methods. Robust prevention mandates are essential, urging both merchants and cardholders to maximize available technology in safeguarding financial dealings. Sellers should remain proactive in employing multiple antifraud techniques, while users must watch for any immediate signs of tampering whenever engaging physically with ATMs or payment terminals.
Related Terms: credit card fraud, identity theft, security breach, financial scam, stolen card information.
References
- Santa Clara High Technology Law Journal. “Data Breaches: What the Underground World of Carding Reveals”. Pages 380, 393.
- Santa Clara High Technology Law Journal. “Data Breaches: What the Underground World of Carding Reveals”.
- Santa Clara High Technology Law Journal. “Data Breaches: What the Underground World of Carding Reveals”. Pages 381-382.
- Santa Clara High Technology Law Journal. “Data Breaches: What the Underground World of Carding Reveals.” Page 382.
- Santa Clara High Technology Law Journal*.* “Data Breaches: What the Underground World of Carding Reveals”. Page 388.
- Institute of Electrical and Electronics Engineers. “All Your Cards Are Belong to Us: Understanding Online Carding Forums”. Page 2.
- Santa Clara High Technology Law Journal*.* “Data Breaches: What the Underground World of Carding Reveals”. Page 387.
- Board of Governors of the Federal Reserve System. “Networks, Processors, and Issuers Payments Surveys (NPIPS)”. Pages 3, 9, 11.
- International Trade Administration. “Minimizing Fraud”.
- National Institute of Standards and Technology. “Multi-Factor Authentication”.
- IBM. “What is CAPTCHA?”
- U.S. Payments Forum. “Velocity Checks”.
- Federal Bureau of Investigation. “Skimming”.
- Scandiweb. “Store Under Carding Attack? Here’s What to Do”.
