Card Testing Fraud

Card testing fraud is a specific type of financial fraud where a fraudster uses stolen credit card information to perform small transactions to determine which card numbers are still active and valid. This fraudulent activity is often conducted using automated software, which can rapidly test multiple credit card numbers on various online platforms—particularly on websites that do not have robust anti-fraud measures in place.

Fraudsters typically initiate these small transactions because they are less likely to trigger fraud detection systems, allowing them to confirm the validity of a card without drawing attention. Once a card is confirmed as valid, it can then be used to make larger purchases or sold on the dark web as a verified active card, increasing its value to other criminals.

Card testing fraud not only leads to unauthorized charges on the cardholder's account but also increases operational costs for businesses due to chargebacks and increased scrutiny from payment processors. To combat this type of fraud, businesses are advised to implement sophisticated fraud detection systems that can identify and flag unusual patterns of activity, such as multiple small transactions occurring in a short timeframe, especially from new or unverified users. Enhanced verification measures like requiring CVV numbers, using address verification systems (AVS), and setting thresholds for the number of declined transactions per session are also effective in deterring such fraudulent activities.