Such as I just gave a pizza place my name, card number, expiration, security code and zip. The same goes for countless other companies where I’ve done the same. What’s to stop employees from using this information to make fraudulent purchases? Or does it happen and just hasn’t happened to me yet?
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Credit card fraud is more common than most people realize. It’s rare to meet someone who has had credit cards for a number of years without having had to deal with fraud.
Fraudulent charges are almost always easy to fix from the cardholder’s perspective. All you do is call them (or more often than not, they call you!) and tell them a specific charge isn’t valid. Every single time it has happened to me they removed it from the statement and issued a new card with no questions asked.
By law, maximum liability to the cardholder can’t exceed $50 and even then almost all cards offer $0 liability. Card companies are generally ok incurring additional risk and loss due to fraud in exchange for ease of use. The easier it is to use a card, the more you use it. The more you use the card, the more of those sweet, sweet swipe fees are collected.
Card issuers are highly incentivized to hide this problem from you. They’ll just eat the losses. They know that if they implement strict fraud detection that forces you to validate charges at the point of sale or if they make it a pain in the ass to remove fraudulent charges from your statement, you’ll stop using that card in favor of another card that isn’t a hassle. At that point they go from making money from your account to losing money on it.
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