What is Carding Fraud – Types and How does it Work

There are many different methods of identity theft that target individuals. One of those types is called carding. Carding is a cybercrime that can lead to financial fraud. It is the illegal method by which criminals gain access to your credit or debit card data and use it without your consent. The practice of carding is also known as card fraud and can be conducted through various means, such as skimming.

Although the impacts of carding can be damaging, cardholders can still take measures to protect themselves from this type of identity theft. It’s helpful to understand how this version of identity theft works, given that many consumers can easily become victims of it. Continue reading to learn more about how carding works, the different types of carding, plus cybersecurity tips and red flags if you believe you have been a victim of carding.

How does carding work? – carding fraud

Carding is a type of fraud by which your credit card information is stolen, such as skimming or point-of-sale system hacking, for financial gain. Hustlers aim to use the card information that was obtained either from a data breach, through carding forums, or by purchasing that information from the dark web.

Once your details have been obtained, thieves test the validity of your card by attempting several small purchases across the internet. After the card has been validated, scammers will use your credit card information to purchase prepaid gift cards.

Carding differs from other ways to conduct identity theft or credit card fraud given that the thieves purchase gift cards and prepaid cards, which cannot be tracked. Once the transaction is complete, fraudsters are free to use the gift cards to buy items with their stolen funds. They can also sell gift cards on websites like GiftCash for money.

Types of carding attacks

With carding, hackers go beyond just stealing your data and instead aim straight for your money. The process of this type of card fraud frequently involves individual credit or debit card accounts. These numbers and the information contained on the cards are then shared or sold on dark web marketplaces or other related carding forums.

Card information may have been compromised in a data breach, phishing attack, or otherwise related security issue. Below are some of the common methods these hustlers employ to steal card data for their financial gain.


Phishing is a type of carding fraud that involves a person attempting to get your personal information by pretending to be a business or organization you trust. Phishing can take place through email, text messages, or phone calls.

The most common method is often done by sending out phony emails that appear to come from legitimate companies. This is to trick you into clicking on links or divulging your personal information. For example, a scammer can send a phishing email that mimics a legitimate business you use and will request that you complete your purchase through their scam website.


Malware is malicious software designed to disrupt computer operations, gather sensitive information, or gain access to computer systems. Malware attacks are when hackers fool you into clicking a link that installs software onto your digital device. Most malware runs in the background and watches your activity without you knowing. carding fraud

In relation to carding, this method of stealing your information involves the malware program searching your system for specific data on your devices. Malware can also embed a keyword stroke program, which will record every keystroke typed on the device. Hackers look for information like credit card and debit card numbers.

Hacking credit card processing systems

Another type of carding fraud is hacked credit card processing systems. Every time you make a purchase using your credit card, the information is stored with the merchant who sold you a product or service. This information is also stored at the bank where you have an account.

Carders steal this information from merchants or card issuers by hacking into their systems through methods such as malware and phishing. One example of how detrimental this type of breach can be is the Target data breach that occurred in 2013.

Credit card skimming and shimming

Credit card skimming refers to the practice of copying information from a card’s magnetic stripe. Credit card shimming is identical to skimming in that thieves place a tiny device called a shim directly onto the card slot of a credit card machine or ATM.

The shim placement is key because it is designed to sit on top of the readers that accept chip-enabled cards. These devices are often also enabled with a microchip and flash storage to send the card information directly to the hustlers that installed it.

In physical skimming or shimming, hustlers will attach a shim directly to an ATM or credit terminal. In virtual skimming, thieves use software like keyloggers to obtain your PIN number and other sensitive details about your account, such as its balance. Once skimmers have the account information, it can then be used to clone the card. This card clone allows a criminal to make fraudulent purchases and withdrawals.

Carding red flags

Criminals steal your information using a variety of carding techniques. If customers or businesses think they may have been carded, they should watch out for the following frequent red flags:

  • suspicious behaviour on your debit or credit card account
  • emails from your bank requesting that you confirm a transaction or method of payment
  • Emails from companies wanting you to return purchases you never made Contact from someone pretending to represent your bank requesting personal information
  • Unknown text message senders will notify you of suspicious behaviour and ask you to take action.
  • emails from unknown companies or people asking for specific information, like your credit card number
  • Unknown or suspicious-looking problems when trying to check out on websites
  • There are numerous problems with both physical and online payment rejection.
  • many unsuccessful payment authorizations for e-commerce websites from the same IP address
  • the same client making numerous chargebacks or your organization receiving more chargebacks overall

Tips to protect yourself from carding fraud

Carding is a method of identity theft that can be debilitating for many consumers. However, you can still take the following security measures to help reduce the chances of becoming a victim of carding:

  • If you’re using a debit card, keep tabs on your spending limit and monitor how much money is left in your account.
  • Avoid giving out your credit or debit card number via email or over the phone.
  • Do not leave your card unattended in restaurants or other places where it might be stolen by someone else and used for illegal activities.
  • Keep track of your receipts and ensure the purchase information is accurate.
  • Save your bank’s official contact information and respond quickly to fraud alert contact requests sent directly from your bank.
  • Utilize a password manager to securely save and store your passwords.
  • Consider using credit cards with built-in fraud prevention features or investing in identity theft protection services.
  • Employ the use of malware removal or antivirus programs and keep them up to date.
  • Check your devices for any suspicious activity or high usage, and keep them regularly updated.
  • Do not click on any links or attachments. Call the number listed on the back of your card instead and speak with someone directly about this issue.

How retailers protect you from carding fraud

In addition to consumers, many businesses have had to take measures to help protect themselves from carding fraud. Retailers have implemented numerous measures to protect themselves and their customers from this type of fraud. Retailers are doing this by using secure payment gateways, encrypted connections, and secure payment methods.

Many e-commerce sites are also taking digital measures that include requiring CAPTCHA confirmation, multifactor authentication requirements for payments, and checking billing addresses against a USPS address verification system (AVS). Retailers are also implementing card verification values (CVV) or a bank identification number (BIN) when processing credit card payments online to ensure there is consumer verification. carding fraud

In order to safeguard themselves against this kind of fraud, they frequently monitor all transactions and employ fraud detection and prevention technologies. Additionally, there is legislation requiring retailers to report any suspicious or anomalous transactions right away so that police can follow up on the case as needed.


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