What is card-not-present (CNP) fraud?

Quick insights

If you lose or misplace your credit card, one of the first things you may do is put a hold on your card to help prevent fraudulent transactions. However, technological advances have made it possible for fraud to happen even when your card is tucked away in your wallet.

CNP fraud occurs when credit or debit card information is used to make a transaction without the physical presence of the card. This type of fraud has become more common, particularly with the rise of online shopping where a physical card is not necessary.

In this article, we’ll cover what CNP fraud is, ways to identify it and steps you can take to help protect yourself.

Understanding CNP fraud

CNP fraud is a type of credit card fraud that involves the illegal use of a card’s information without the physical card being present. The card’s information can then be used to make unauthorized purchases. CNP fraud differs from other types of credit card fraud where the card is physically present during the transaction.

CNP fraud can occur in various scenarios, including online shopping, phone transactions and mail-order purchases. For instance, when making online purchases, consumers may inadvertently enter their card information on fake or compromised websites, making it vulnerable to unauthorized use.

Unlike physical card fraud, CNP fraud does not require the fraudster to have physical access to the card, making it easier to commit remotely, even across the world.

How CNP fraud occurs

CNP fraud can occur through various methods. Your card’s information can be illegally obtained in a few common ways, including:

Fraudsters may also use malware and fake websites to facilitate CNP fraud. Once someone obtains card information, they can use it to make unauthorized transactions online, over the phone or through mail-order purchases.

Detecting CNP fraud

To help detect potential CNP fraud, consumers could consider monitoring their account activity regularly. This includes checking credit card statements for suspicious transactions and reporting any discrepancies to their bank or credit card issuer.

Transaction alerts and notifications may also play a role in early detection. Many financial institutions offer services that notify cardmembers of unusual or large transactions, helping them to respond promptly to potential fraud.

If suspicious activity is detected, quick reporting to the bank or credit card company may enable them to freeze the account, issue a new card or take other measures to possibly prevent further unauthorized transactions.

How to help protect yourself from CNP fraud

To help protect against CNP fraud, there are a few precautions that consumers can exercise, including:

Some credit card issuers may also provide virtual credit cards. These cards are typically issued for a single use and do not use your actual card information during a transaction. Virtual credit cards may provide an added layer of security for online transactions. Note that Chase does not offer virtual credit cards.

Credit card features that help protect against CNP fraud

When choosing a credit card, consumers may want to look for cards that offer additional security features, such as purchase protection or identity theft protection. These features may provide extra peace of mind when making online or phone transactions.

Credit card issuers may offer security features designed to prevent or minimize CNP fraud, including:

In summary

CNP fraud is one type of credit card fraud where credit card information is illegally obtained and used to make fraudulent purchases. CNP fraud may occur in several ways, but phishing, data breaches and card skimming are some of the most common.

Consumers can help protect themselves from CNP fraud by using secure websites for online transactions, enabling multi-factor authentication and using virtual credit cards if available.