Credit Card Fraud in the UK Research Paper Example | Topics and Well Written Essays - 1750 words - 1

Credit Card Fraud in the UK - Research Paper Example In 1946, John Biggins’ introduced the first bank card called â€Å"Charge-It† which allowed account holders at Biggins bank located in Brooklyn to purchase. The bill is forwarded to Biggins and Biggins pay the merchant, then charge their account holders in return. In 1951, the same system was also adopted by Franklin National Bank in New York. Both systems worked the same but use was limited locally. Diners Club Card was introduced through the initiative of Frank McNamara and his partner Ralph Schneider. By 1951, there were about 20,000 cardholders of Diners Club (Woolsey and Gerson, 2009). It was estimated that the cost of credit card fraud in the United States amounts to around US$750-830 million in 2006 alone or globally at 7 cents per $100 transaction (Mercator Advisory Group, 2008). In 2007, it has been reported that estimate of losses caused by credit card fraud reached some $52.6 billion. Credit card fraud is the misuse of a credit card through theft or another payment system through the illegal source of funds with the purpose to obtain funds or goods without bearing the payment. Physical cards may be stolen or identity data and other relevant information may have been compromised to allow the commission of credit card fraud. Usually, the legitimate cardholder may not be aware of the fraud, and neither does the institution that issued the card (Levi, Bissell, and Richardson, 1991). The cardholder may only start to become aware of theft or fraud once a billing statement has been received which is not delivered daily or weekly, but usually every month (Levi, Bisse ll, and Richardson, 1991).