Card-cracking: A new card fraud

Card-cracking, also called card-popping, is one of the fastest growing forms of card fraud that no one’s heard of, and its hitting credit unions. Card cracking takes on many forms, but the most common is college students allowing a fraudster to have their debit card number and login information in exchange for some payment, and then deposit bad checks or run up charges, and have the student claim the card was lost or stolen. It’s a form of friendly fraud that’s not very friendly, and the temptation cost 9 Florida Gators their football careers.

Background: Card-cracking: Not so innocent victims

Card-cracking is a national problem, one that’s growing. Fraudsters take advantage of naïve, usually college-aged debit cardholders, who are led to believe that there’s nothing wrong with the proposed activity, since the cardholder is protected from fraudulent charges under Reg E. Fraudsters target their prey over social media, or paper ads posted in college dorms and student centers. Fake accounts on snapchat, with screen captures of large deposits in bank accounts, saying this is a legitimate way to earn extra money, are not uncommon. The victims usually don’t possess the financial savvy to see the illegality of their actions, and instead see a path to some quick money, with nothing to lose. Often the victim has very little money in their account and falsely believes that they don’t have much to lose. The fraudster approaches the prey, offering a payment, or a “cut” of checks to be laundered through the debit account. The account holder provides access to their account as well as the physical card. Once the card-cracker has access to the account, they deposit multiple bad checks – usually remotely – and then make quick ATM withdrawals. The goal is to get the cash in hand before the bank figures out the checks are phony. The account holder is also at risk of having their own money stolen from their accounts and having unauthorized purchases made with their debit cards.


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