What is carding? How does it work?

Carding is a term describing the trafficking of the credit card, bank account, and other personal information online as well as related fraud service.Activities also encompass procurement of details, and money laundering techniques. Modern carding sites have been described as full-service commercial entities.

75% of Canadians say they are more concerned about fraud today than they were five years ago. And it’s no wonder why, with a 78% increase in fraud losses in the seven years from 2008 to 2015. Protect yourself, and your merchant account, by learning more about this fraudulent tactic below.

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What is Carding?

There are two types of Carding, front-end, and back-end.

• Front-End Carding happens at your checkout. The fraudster is trying to purchase something from your store, and running through a laundry list of credit cards until one works. Their personal information stays the same, the purchase amount doesn’t change, but the credit cards information changes.
• Back-End Carding happens on our server. Someone with a large number of stolen credit cards attempts to test their validity by running small transactions on a random merchant account. They do this by guessing your Merchant ID number, then sending a request to process transactions to your payment provider using your Merchant ID.
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At Bambora, once we detect carding we alert the merchant immediately. If any of the payments were approved, we run a batch refund.

Is the Merchant Account compromised?

If your Merchant Account has experienced back-end carding, the good news is the information is still safe and secure. The Merchant Account itself has not be breached.

How do you detect Carding?

We have become experts at identifying Carding attempts. There are multiple ways we can detect it, the biggest being the decline rate on micro-transactions. Remember with Back-End Carding, the fraudster is just trying to see if the credit card still works, to be able to use it in another purchase. They are sending a small amount to us to test, which we detect. There are countless other ways we can detect Carding, but rest assured we do.

What can be done to prevent future Carding?

When we flag that an account has shown Carding activity, we sometimes enable a security feature called Hash Validation to prevent any future attempts. There may be updates to the account depending on how payments are being processed, but we will be here to offer support.

Hash Validation is one of the many tools that we can help you protect against Carding. It isn’t always a fit for every business so we will work with you to find the right protection for your business.

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Processing payments online can expose you to a certain level of risk. Hopefully, you will never get the alert notifying you that we have detected Carding on your account, but if you do – don’t panic. Your information is safe, we will issue the batch refund, and we will work with you to prevent any future attempts.

We are your partner in payments, through the good and the bad.

How Carding Happens

Carding typically starts with a hacker gaining access to a store or website’s credit card processing system, with the hacker obtaining a list of credit or debit cards that were recently used to make a purchase. A hacker might exploit weaknesses in the security software and technology intended to protect credit card accounts. They might also procure credit card information by using scanners to copy the coding from the magnetic strips. Credit card information might also be compromised by accessing the account holder’s other personal information, such as their bank accounts they have already gained entry to, targeting the information at its source. The hacker then sells the list of credit or debit card numbers to a third party, a carder, who uses the stolen information to purchase a gift card.

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Most credit card companies offer cardholders protection from charges made if a credit or debit card is reported stolen, but by the time the cards are canceled the carder has often made a purchase. The gift cards are used to purchase high-value goods, such as cell phones, televisions, and computers since those goods do not require registration and can be resold later.

If the carder purchases a gift card for an electronics retailer, such as Amazon, he or she may use a third-party to receive the goods and then ship them to other locations. This limits the carder’s risk of drawing attention. The carder may also sell the goods on websites offering a degree of anonymity.

Because credit cards are often canceled quickly after being lost, a major part of carding involves testing the stolen card information to see if it still works. This may involve submitting purchase requests on the Internet.