Virtual cards have become a popular tool for online shoppers and businesses looking for an extra layer of security when making payments. They offer temporary or disposable card numbers that help protect against fraud, but scammers have found ways to exploit them. If you are concerned about unauthorized transactions or fraud, it is essential to understand how to block virtual cards and stay safe from common scams.
Understanding Virtual Cards
A virtual card is a digital version of a credit or debit card. It has a unique card number, expiration date and CVV, just like a physical card, but it exists only in digital form. Virtual cards are usually linked to a real bank account or credit card and can be set to expire after a single transaction or a set period. However, scammers have found ways to exploit virtual cards in various schemes.
Common Scams Involving Virtual Cards
Even though virtual cards provide extra security, fraudsters have devised ways to misuse them. Here are some of the most common scams:
Card Testing Fraud: Cybercriminals use bots or automated scripts to test stolen virtual card numbers by making small purchases. If the transaction goes through, they proceed with larger fraudulent transactions.
Friendly Fraud: Scammers purchase goods or services using a virtual card and later file a chargeback claim, falsely stating they did not receive the item or that the transaction was unauthorized. This leads to financial losses for merchants.
Account Takeover Fraud: Hackers gain access to a victim’s financial accounts, including their virtual card details, by using stolen credentials from data breaches or phishing attacks. They then use the virtual card to make unauthorized purchases.
Fake Virtual Card Generators: Some websites claim to offer “free virtual credit cards” or “instant approval virtual cards.” In reality, these sites are designed to steal personal information and financial data from unsuspecting users.
Gift Card and Refund Scams: Fraudsters trick victims into purchasing gift cards using virtual cards and then request refunds to another account. Scammers also use stolen virtual cards to buy gift cards, which are harder to trace.
How to Detect a Virtual Card in FraudLabs Pro
A virtual card can be recognized by its 6 or 8-digit BIN/IIN number, which provides key details about the card. This number reveals information such as the issuing bank, country of origin, card type (credit or debit) and subtype. The subtype further specifies whether the card is virtual, prepaid, a gift card or another category. To learn more, you can use an online Credit Card BIN Lookup tool.
In order to set up a rule for detecting or blocking virtual cards in FraudLabs Pro, it is essential to have access to the BIN information. You can find this data on the transaction details page. However, keep in mind that not all e-commerce platforms share card BIN details, so availability may differ depending on the platform.
If the BIN information is available on the transaction details page, you can create a rule to identify virtual cards on the Rules page. Simply search for the term “virtual” to locate the validation rule titled “Credit Card Equal to Virtual Card.” Depending on your needs, you can choose the appropriate action, such as placing the transaction under review or rejecting it outright. Please note that this validation rule is only available to merchants on the Medium plan or higher.
Conclusion
Virtual cards offer security benefits, but they are not immune to fraud. Scammers use various tactics, from card testing to account takeovers, to exploit virtual card users. Knowing how to block a virtual card and prevent fraud can help you safeguard your finances. By taking these precautions, you can enjoy the convenience of virtual cards while minimizing the risks associated with fraud.
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