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What is Carding?

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Credit and debit cards are the go-to instruments for people transacting online. Despite the comfort and convenience of using cards, it is still vulnerable to online security threats. Protecting customers' financial data has become a prioritized task for business owners. Storing card details requires an exacting level of security to deter cybercriminals from accessing confidential information. Sadly, criminals consistently develop new threats in order to bypass current safety measures, such as the growing menace of 'carding.' As such, it is essential that businesses prioritize their customers' digital privacy and ensure they are utilizing all available resources for maximum protection against malicious actors.

According to PayPal and Ponemon Institute's report, businesses encounter an average loss of US$ 4.5 million per year due to fraudulent transactions. 

This article provides insight into the enigmatic process known as carding. We will explain how malicious actors obtain your credit card information and discuss steps you can take to safeguard yourself from falling victim to carding fraud.

What is carding?

Carding is a sophisticated cyberattack and web security risk in which attackers relentlessly strive to authorize stolen credit card credentials. It's also referred to as the credit card stuffing or card verification technique. Cybercriminals frequently deploy bots to steal credit card information, attempting to figure out which cards will pass verification during large-scale purchases. Utilizing automated operations, these criminals can swiftly identify the correct credentials and details for successful transactions.

Attackers also take card details from the dark web and use card stuffing on various e-commerce websites to buy expensive items without the card owner's consent. More expert carders use OTP bypassing mechanisms to transfer tens of thousands of bucks as gift cards or buy expensive items from surface or dark web e-commerce sites. 

How does the carding technique work?

  1. A cybercriminal grabs numerous credit card numbers and related credentials from the cyber black markets or other sources.

  2. The cybercriminal then deploys a bot to automate purchases on multiple payment sites. Like a brute force attack, each attempt by the bot will test a stolen card number against the payment processes.

  3. After thousands of attempts on different e-commerce platforms and sites, the cards that work successfully get listed for sale. 

How do cybercriminals get your credit card numbers?

Online shoppers often buy from illegitimate or unsecured websites. Usually, such websites lure shoppers by offering too-good-to-be-true deals to collect their card details. These fraudulent or unsecured e-commerce platforms (often local) account for most card data leakage.

Cybercriminals (carders) obtain stolen or sold credit card details from the dark web. Since the dark web is uncensored and anonymous, numerous black-market businesses sell these card details for carding.

Various other ways for cybercriminals to steal credit card details include:

  • Phishing websites where they often impersonate bank representatives

  • Tricking users to download or install financial data-stealing malware.

  • Implementing credit card skimmers and shimming devices on point-of-sale machines or ATMs.

  • Hacking into databases that store card details and credentials from carding forums or black har hacking platforms.

Detect carding frauds patterns

Though sophisticated, most carding frauds follow a set pattern. If users are vigilant, they can easily prevent financial harm. Here are some pointers:

  • Increased proportion of failed payments and authorization notifications.

  • Undue or repetitive use of the payment steps on e-commerce sites.

  • High chargeback.

  • Abnormal notifications over emails or SMSs about payment attempts or amount deductions.

  • Abnormal increase in shopping cart desertion rates.

Preventative measures

  1. Device fingerprinting is a way e-commerce sites can identify users' browsers and devices to determine whether the right person is using the card.

  2. Enterprises and online shopping sites can also use ML-based behaviour analysis and pattern detection to identify whether it's a bot or a person using a credit card.

  3. Users should enable and leverage multi-factor authentication. Although it is not a fool-proof solution, it makes it difficult for cybercriminals to take over existing accounts.

  4. CAPTCHA is another means to stop automated bots from farming and applying credit card details on multiple platforms.

  5. E-commerce services can leverage API security so that these APIs can identify fraud or stolen credit cards. Also, e-commerce companies should implement SSL encryption and robust authorization mechanisms in payment gateway APIs to secure online transactions from carding.

Conclusion

As online transactions and e-wallets become increasingly commonplace, the risk of financial threats is growing exponentially. To mitigate these risks, application development teams should take proactive measures to protect their businesses from such threats.

By implementing the necessary security protocols and educating users on best practices, enterprises and organizations can reduce the risk of carding fraud.

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