Carding: What it is and how to prevent it

This type of scam doesn’t require an attacker to physically present your credit card. Many stolen credit cards used in carding fraud can be “generated” from information that you don’t protect. Dumpster diving for thrown-out financial records or bills, breaking into mailboxes, or even sophisticated social engineering attacks like phishing scams can all be potential ways to steal your credit card data.

Carding fraud is a relatively simple process. Criminals (also known as “carders”) steal your credit card details. They’ll then verify that your card can be used for transactions by entering your credit card information on a payment site. Once verified, they’ll use it to buy prepaid gift cards to purchase high-value goods that can also be sold for cash.

What makes carding so effective is that there are plenty of ways to steal credit card information, and carders can immediately use online shopping to commit card fraud.

Carding techniques

Some techniques that a malicious actor can use to steal credit card information include:

• Phishing for credit card details. By pretending to be a credit card company or credit card processor, carders can fool you into giving up your credit card information or other data needed for card verification. These attacks usually take place via fraudulent emails or false websites.
• Social engineering attacks. Some sophisticated types of attacks rely on the carder cultivating a personal relationship with their target, with the intent to steal information about their credit card or other personal data that can be used to verify their card details.
• Data breaches from banks and other financial agencies. Financial institutions are often the target of cybercriminals for their databases of customer’ credit and personal information. If their security is breached, carders gain access to details like your billing address, date of birth, or other details to help them verify your credit card.
• Attacking e-commerce sites and payment gateways. Similar to data breaches, criminals can also attack sites that take credit card information for payments and other similar services. If you use your credit card to pay for online shopping, it becomes much easier for the carder to gain access to your card data. Some hackers may even use spyware to eavesdrop on credit transactions.
• Automated carding attacks. Bot attacks (either by using card-generating or card-cracking bots) have also become extremely popular for carding fraud. This method can generate thousands of potential card numbers, with more sophisticated bots only needing access to your credit card number to brute force the rest of your card details.
• Buying stolen credit card information. Cybercriminals can also acquire credit card numbers from various sites on the dark web that traffic in stolen cards. If a financial institution and its records have been hacked en masse by other criminals, they are sold to carders for the highest bid.

Carding schemes

Once carders have access to your credit card and verified the details, there are two possible ways that they can use your credit card accounts for fraud:

• Carding for goods, where carders use your card to buy gift cards. This is then exchanged for high-value goods, which they can then sell again for a cash sum.
• Carding for cash, where carders withdraw cash from your card. This scheme mostly targets debit cards, with the intent to drain the entire card’s balance and exchange it for cash.

In more elaborate schemes, you may find that your stolen data can be trafficked to carding forums and communities on the dark web. These communities actively exchange or sell stolen credit cards to other criminals and band together to improve the sophistication of their carding attacks.

Aside from card data, it’s not uncommon to find fullz packages on a carding forum. Fullz refers to the “full information” package that is highly prized by criminals since it typically contains the personal details of real users, not just their card data. These can be used for further carding attacks or other forms of fraud like identity theft or money laundering.

Another hot commodity in a carding forum is credit card dumps, which are digital copies of physical credit cards. Even just a card number can be enough for other carders to use bot attacks to crack the rest of the card’s details.

What is the punishment for carding?

The penalties for convicted carders vary across states in the US. Individuals found guilty of carding can face imprisonment of up to 20 years, alongside potential restitution and fines of up to thousands of dollars.

While the strategies that criminals use for carding fraud continue to evolve, so too have the security measures that financial institutions and credit card companies use to protect your information. Some of these methods rely on detecting an ongoing carding attack and deploying the appropriate security response.

Fraud detection systems

Fraud detection systems are an effective method for blanket protection against carding attacks. These systems are often deployed by payment processors and other financial institutions and are designed to catch potentially fraudulent behavior. While the system isn’t perfect, it’s robust enough to prevent most cases of carding attacks, even those done on a large scale.

Behavioral analysis

One particularly effective subset of fraud detection is behavioral analysis, where a system detects and analyzes card transactions. This behavioral analysis can be done in real time and compares credit card behavior against your historical data of using it. This approach can work on both the card and human behavior. For example, the CAPTCHA system acts as a reliable standard for behavioral analysis in online interactions.

Machine learning and AI

With the speed and number of credit card transactions, many organizations and businesses have turned to machine learning and AI to further augment their security against carding attacks and other forms of financial fraud. With the sophisticated learning abilities of AI, companies and financial platforms can fine-tune their analysis and response to potential carding attacks and protect more users long-term.

While businesses and payment processors can use a variety of tools and software to protect their processes when handling your credit card, there are also steps you can take as an individual to minimize your risk.

Strong authentication with your credit card accounts

The first thing you can do is implement multi-factor authentication (or other security verification measures like passkeys) for your financial accounts, from your credit card to your bank. Not only does this ensure that carders will have a more difficult time accessing your credit card, but it also allows you to take a proactive approach to keeping track of your card transactions and freezing it if necessary.

Not disclosing personal information

Much of your card data is tied to your personal information, which includes previous addresses, dates of birth, or other details that can be used to answer security questions. Not disclosing your personal information makes it harder for carders to do something with any stolen information and gives you a brief window of time to respond if your credit card details are compromised.

Being proactive about tracking your credit card behavior

If you see any suspicious activity in your card transaction history (like repeated small purchases, transaction errors with a single merchant you’ve never interacted with before, or unauthorized withdrawals), call your bank or credit card issuer to freeze your card immediately. Even just looking over your card statements thoroughly every time you get them can give you warning signs on whether you’ve fallen victim to a carding attack.

Carding attacks may seem like a looming threat over any credit card user, but there are tried-and-tested security measures that both businesses and their customers can take to protect themselves and their card information.

By being aware of the potential behaviors and vulnerabilities that open you up to carding attacks, you’ll be in a better position to proactively manage and mitigate these risks. Consistent habits of safe credit card use can be your greatest asset in protecting your finances, even with the growing threat of carding and other forms of credit fraud.