What Is Carding? Recognizing and Avoiding the Credit Card Fraud

January 23, 2024 By Janne Smith No Comments 7 minutes

Aren’t credit cards a bliss? However, carding is the ultimate opposite of that. Speaking of the convenience credit cards bless us with, as per the Consumer Financial Protection Bureau, over 175 million Americans hold a credit card. Surprising, right? Everything’s only a swipe away! You want it, you get it…but only when your wallet permits you.

What is Carding

Carding, as the name refers, is a credit card fraud where those cards get used to buy gift cards. However, that’s not it. There’s a lot more that a carding hacker does with a stolen credit card.

This article offers a walkthrough of what is carding, an overview of a carding site, what makes it illegal, and ways to mitigate this credit card fraud. Let’s find out all!

Note: We recommend you use FastestVPN to conceal your browsing activities. A reliable VPN protects your data from a carding hacker by hiding your IP address.

Get FastestVPN

What Is Carding?

This is a type of fraud where a carding hacker utilizes stolen credit cards for illegal financial activities. Carding can facilitate the following activities:

Money laundering
Selling data on illegal sites
Tricking people for malware installation
Hack the payment system of a site
Purchase gift cards
Make illegal purchases

These are only a fraction of all that carding can lead to, and the stats for this type of fraud are already high enough.

According to Ascent, in 2022, credit card fraud emerged as the predominant form of identity theft, accounting for 440,666 reported incidents. During the initial three quarters of 2023, 318,087 reports were lodged for credit card fraud. This indicated a sustained prevalence of this cybercrime.

The criminals don’t need the stolen credit card to be physically there for carding only. Generally, in a significant number of cases, it’s only the card information that comes in handy. This information can leak by you not protecting your personal banking information.

For this reason, we recommend you use a reliable VPN like FastestVPN. Its robust features, like the WireGuard protocol and military-grade AES 256-encryption.

Is Carding Illegal?

Yes, carding is illegal. Since a credit card is used for committing financial crimes, it makes it illegal. The severity of this crime depends on regional and state laws. In the US, the Federal penalties include up to 20 years of prison.

It’s not only the physical presence of the card that leads to carding fraud – data breaches, spyware, and card cloning contribute equally. The primary mitigation step includes using a reliable VPN, like FastestVPN. From military-grade encryption to WireGuard protocol – it offers the best features at an affordable price.

What Is the Carding Process?

Carding fraud involves a straightforward method where criminals, commonly called “carders,” steal your credit card information.

Subsequently, they confirm its usability by inputting the details on a payment platform. After verification, they employ the stolen information to acquire prepaid gift cards, enabling the purchase of high-value items that can be resold for cash.

The effectiveness of carding lies in the multitude of methods available for stealing credit card details, coupled with the immediate use of online shopping to carry out fraudulent transactions.

What Leads to the Fraud: Carding Explained

Here are the top factors that lead to carding:

1. Data Breaches

Financial institutions like banks are always on the brink of cyber attacks. And now that these banks are only a tap away (online banking), we’re all prone to data breaches. Generally, it’s the data breaches that lead to carding through a carding site.

A reliable VPN, like FastestVPN, is crucial to avoid these attacks. Without a reliable VPN, a data breach leads to accessing your personal information, like your banking details. These details lead to stolen card information verification, and voila, carding awaits!

2. Automated Attacks

Bot attacks utilizing card-generating or card-cracking bots have gained significant popularity in carding fraud. This approach can produce thousands of potential card numbers, with advanced bots requiring only your credit card number to employ brute force techniques and obtain the remaining card details.

3. Phishing

Carders employ deceptive tactics by posing as a credit card company or card processor, tricking individuals into divulging their credit card details or other necessary information for card verification. Such fraudulent attempts commonly occur through misleading emails or counterfeit websites.

What Are the Types of Carding Techniques?

The criminals involved in carding fraud are referred to as “carders.” They steal your credit card information and ensure information verification, too. And the most common one includes submitting card-not-present requests for online purchases.

According to Statista, global card fraud losses surged by over 10% from 2020 to 2021, marking the most significant increase since 2018. According to the source, the estimate indicates that merchants and card acquirers collectively faced losses exceeding 30 billion U.S. dollars, with approximately 12 billion U.S. dollars attributed to the United States alone.

As mentioned above, carding doesn’t lead to a specific activity. Instead, there’s a whole list that awaits!

Here are the 3 carding techniques:

1. The Carding Forums

A carding site or Carding forums are online platforms facilitating the sharing of information and technical expertise related to the illegal trade involving stolen credit card or debit card account details. Fraudsters utilize the carding site to exchange unlawfully obtained information.

Despite advancements such as the implementation of PINs and chips, which have increased the difficulty of using stolen cards in point-of-sale transactions, card-not-present sales persist as the primary focus of card thieves, garnering extensive discussions on a carding site.

2. Credit Card Dump

Referring to a digital copy of stolen card information, cybercriminals purchase these credit card dumps to make unauthorized and illegal transactions. According to the National Institute of Justice, dumps have been the most common products that were sold – including 34.9% of stolen credit card data.

Meanwhile, in previous years, credit card dumps have tremendously increased, with millions of victims now included in the carding list.

3. Full Information (Fullz)

Fullz is a common term among a carding hacker group who shares stolen card information. Simply put, they’re sets of stolen data. And, for carding, Fullz is bliss.

This information is later used for identity verification. Meanwhile, the information sold as Fullz is never a direct transactional party.

The Mitigation Steps: How Can We Stop Card Fraud?

Whether an individual or an organization, all data online is never safe – emphasizing the importance of data protection through FastestVPN.

According to the Nilson Report, a watchdog for the payments industry, in December 2022, it predicted that card fraud losses in the United States would reach $165.1 billion over the next decade, affecting individuals of all ages across every state.

Here’s a list of the top mitigation steps to avoid carding fraud:

1. Robust Credit Card Authentication

Today, most platforms recommend 2-factor authentication, and that’s only for good. By ensuring robust credit card authentication measures, such as a passkey, you can ensure heightened security for your personal banking information.

2. Use a VPN

A robust VPN, like FastestVPN, protects your digital information from never leaking out to a carding hacker. Skimming its features, its DNS leak protection and AES 256-bit encryption guarantee impenetrable data tunnels.

3. Keep an Activity Check

If you observe any unusual occurrences in your card transaction history by a carding hacker, such as:

Recurring small purchases
Transaction discrepancies with unfamiliar merchants
Unauthorized withdrawals

Contact your bank or credit card issuer promptly to suspend your card. Moreover, vigilantly reviewing your card statements upon receipt can also serve as an early indicator of potential carding attacks.

FAQs - What is Carding

What is called carding?

Carding is a credit card fraud where a stolen credit card is used to make charges on prepaid cards on a carding site.

How credit card frauds are caught?

Carding frauds are caught through merchants. Credit card frauds are easily detected by collaborating with the banks and providing all the transactional data required.

How do you stop fraud transactions?

You can stop fraudulent transactions by reporting them to the bank and following their instructions. We usually recommend card deactivation in this case.

Wrapping Up

In this article, we briefly covered the carding process, its techniques, and ways to mitigate this fraud. The primary step to mitigating these attacks is to use a reliable VPN, like FastestVPN. It conceals your IP address and masks your data in no time!