How do Credit Card companies investigate fraud?

gregton · 05:33 PM

How do Credit Card companies go through the process in which they investigate fraudulent credit card charges? Do they go to the actual scene of the crime and review the video tapes? How are most credit card fraud offenders caught? What is the minimum amount of money spent for the cc companies to launch this type of investigation. I need this information for a school economics paper, and i couldnt find the info anywhere else.

Thanks,
Greg

DoingHomework · 03:21 PM

In many cases there is no investigation. They simply reverse the payment made to the merchant and it is up to the merchant to challenge it and prove teh charge is legitimate. They also cancel a card with fraudulent charges associated with it. I suspect an actual investigation is only done in situations where there is a widespread fraud with thousands of cards or transactions involved. In those cases they will gather some evidence electronically then turn the investigation over to the police of federal authorities.

The credit card companies are not law enforcement agencies so their ability to subpoena evidence and prove chain-of-custody in court is limited. That means they will let the authorities do the true investigatory work.

It would be difficult for anyone to provide an accurate estimate of costs. The cost to reverse a charge or cancel a card, issue a new one is probably only pennies. But the card companies have an interest in making it appear very high so that in the rare instance they can recoup expenses it is a lot. You are likely to see estimates that fraud costs XXX billions a year etc but those are undoubtedly inflated.

phanio · 09:52 AM

As stated - they simply reverse the charges to the you and the merchant - the merchant then has to call up and complain or prove that the charge was yours.

Just make sure you provide all that you can to show that it is not your charge. Then, once all is collected - from you and the merchant - someone in the company will review and make a decision - if the decision goes against you - you will see those charges back on your account.

05:33 PM	#1
gregton Green Member Join Date: Dec 2009 Location: Nebraska Posts: 1	How do Credit Card companies investigate fraud? How do Credit Card companies go through the process in which they investigate fraudulent credit card charges? Do they go to the actual scene of the crime and review the video tapes? How are most credit card fraud offenders caught? What is the minimum amount of money spent for the cc companies to launch this type of investigation. I need this information for a school economics paper, and i couldnt find the info anywhere else. Thanks, Greg

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03:21 PM	#2
DoingHomework Centurion Member Join Date: Sep 2009 Location: Arizona Posts: 113	In many cases there is no investigation. They simply reverse the payment made to the merchant and it is up to the merchant to challenge it and prove teh charge is legitimate. They also cancel a card with fraudulent charges associated with it. I suspect an actual investigation is only done in situations where there is a widespread fraud with thousands of cards or transactions involved. In those cases they will gather some evidence electronically then turn the investigation over to the police of federal authorities. The credit card companies are not law enforcement agencies so their ability to subpoena evidence and prove chain-of-custody in court is limited. That means they will let the authorities do the true investigatory work. It would be difficult for anyone to provide an accurate estimate of costs. The cost to reverse a charge or cancel a card, issue a new one is probably only pennies. But the card companies have an interest in making it appear very high so that in the rare instance they can recoup expenses it is a lot. You are likely to see estimates that fraud costs XXX billions a year etc but those are undoubtedly inflated.

09:52 AM	#3
phanio Green Member Join Date: Feb 2010 Location: Texas Posts: 4	As stated - they simply reverse the charges to the you and the merchant - the merchant then has to call up and complain or prove that the charge was yours. Just make sure you provide all that you can to show that it is not your charge. Then, once all is collected - from you and the merchant - someone in the company will review and make a decision - if the decision goes against you - you will see those charges back on your account.