Identity Theft on Credit Card Fraud Using Qualitative Method

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Table of Contents

Introduction
Protection of Personal Data and Credit Cards
The Fraud Diamond Theory
Conclusion
References

Introduction

In the modern world, more and more often, all financial transactions are carried out using e-commerce, reducing cash turnover. However, the development of technology invariably leads to the development of fraud in new areas that are not yet thoroughly familiar to ordinary people. As a consequence, this process can lead to theft of money from a credit or debit card. Therefore, the issue of card safety both on the part of banks and consumers is now the most acute. A variety of strategies are used to prevent and prevent these occurrences. However, the best result can be achieved only through the efforts of two parties cardholders and banks.

However, preventive measures require prior analysis. Unfortunately, a relatively large number of fraudsters operate in different countries and go unpunished. Just as a bank is developing a security system, fraudsters are also developing their schemes to deceive cardholders. This paper reviews the literature on this topic, which is an introduction to further research. Since it is the ratio and agreement of the actions of bank employees and cardholders that is a critical element in the money security chain, so as a result, the method of interviews with the heads of organizations issuing credit cards was chosen. As an analysis of this study, the theory of diamond fraud is used to define the phenomenology and ethnography of the topic. Twenty academic sources were analyzed for a thorough and deep understanding of the issue.

Accordingly, the literature review includes a review of critical strategies to combat identity and money theft, such as improved security technologies, customer education, and a heightened vigilance strategy. This review then examines specific interventions to prevent such incidents. Finally, the diamond fraud theory method and its application to related topics are explained.

Protection of Personal Data and Credit Cards

Stealing money from credit and debit cards is almost impossible without first stealing the holders identity. Consequently, the root of the problem lies precisely in the security of each persons data, which fraudsters can collect bit by bit on the Internet and elsewhere in different ways (Berghel, 2017). Todays extremely high rate of cybercrimes is dictated not only by the overall development of technologies, including fraud schemes, but also by the extremely low literacy in protecting peoples data (Goel, 2019). The methods of education developed by experts do not give the desired results for several reasons. First, users prefer automated security systems that do not require interaction with them. However, at the moment, it is the constant inclusion of a person in the protection of their security that is a crucial element in the preservation of personal data (Zou et al., 2020). Secondly, the determinants of the positive dynamics of users attention to this side of the issue are the presence of technical education and previous negative experience (Li et al., 2019). Consequently, people lack personal and financial cybersecurity knowledge due to the rapid development of technological progress and an insufficiently strong education campaign.

Several aspects further complicate this problem. First, victims do not always report such cases to the police or other relevant authorities (van de Weijer et al., 2019). In addition, there is a correlation between the types of cybercrimes and the percentage of police reports. Some victims experience psychological distress and depression after such cases, which require lengthy litigation, wasted time, and the possible loss of livelihoods (Golladay & Holtfreter, 2017). As a cause and as a consequence of such emotional and physical disorders, it also leads to the victims isolation, and many criminals who steal funds from credit cards go unpunished.

Control methods include many different strategies. Modeling and analyzing the text of identity theft stories helps to classify the constant flow of information about identity theft unstructured on the vast Internet (Zaeem, 2017). Such an analysis helps determine the average statistical portrait of the victim and the methods of actions of fraudsters and form a particular warning complex of actions that reliably protect people from theft.

Strategies for using new technologies and education are also highlighted. Both strategies imply actions on the part of banks and organizations that issue cards since the safety of personal data directly depends on their security system and organized available instructions for users. Therefore, in this work, a decision was made to use a targeted sampling approach. In other words, a person from such organizations is specially selected for the interview, passing according to strict selection criteria and holding a leadership position. The statistical aspect of this sample is achieved by inviting five such specialists. This approach is explained by the fact that it is necessary to understand the work of such organizations and how they answer urgent questions and problems in this area.

Consequently, the above measures leading to the theft of personal data entail other fraudsters who bypass the security system of banks and credit card organizations in pretty straightforward ways. Even everyday online purchases, which have increased in connection with the global pandemic, can lead to data loss (Burnes et al., 2020). This problem affects directly not only the cardholders and banks but also the entire health care system and the state (Al-Nemrat, 2018). The regulation of e-commerce, one of the newest areas in financial technology, requires regulation at the level of the law, with requirements for security systems, proper instructions for users, and appropriate penalties for offenders.

The Fraud Diamond Theory

The Fraud Diamond Theory looks at fraud by an attacker, which is also necessary for analyzing this problem. The theory includes four main elements regulating the commission of fraud: pressure, opportunity, rationalization, and capability (Rustiarini et al., 2019). The pressure can be dictated by social, government, and less often personal factors. Criminals most often commit these atrocities without being wealthy or successful people in life. The problem of poverty, structural inequality, and other social ills of society always lead to increased crime (Manhica et al., 2020). The high availability of knowledge in programming by sufficiently educated people with abilities can be used not only for good purposes. Security flaw-finding programs are encouraged by the companies themselves. However, the professional question that finding a bug can lead to much more enrichment for their purposes than reward for helping the company is most pressing (Maillart et al., 2017). These two factors reveal the main elements of the theory: pressure and opportunity.

Other elements depend directly on the psychological motives of the fraudsters and directly follow from the first two factors. Rationalization is always moral, namely the violation of the potential victims legal and moral rights (Peprah, 2018). Finally, the ability depends on the confidence of the fraudster in the performed action since most of them are always aware of the possible consequences and penalties. These factors are exacerbated by the victims frequent silence and non-reporting to the relevant authorities, and ignorance of their security capabilities (Sujana et al., 2019). In addition, the favorable economic situation in the country, which is the goal of any state, only creates a fertile ground for such fraudulent activities (Rengganis et al., 2019 and Christian, 2020). Finally, the imperfect study of some aspects of security systems by banks and the imperfection of laws regulating such offenses leads to a carte blanche situation for attackers (Azmi et al., 2017). As a result, it turns out that there are more than two interested parties in security financial organizations, cardholders, a society that regulates the social situation, and the state, which needs to find a balance of security for its citizens.

A triangulation strategy is used to determine the validity of the results obtained in this study. The capabilities of this method suggest a more reliable assessment of the results and limitations of empirical social research (Christian et al., 2019). This model leads to the need to improve audit activities and classify companies that issue credit cards for performing a set of actions that support security (Zaki, 2017). Nevertheless, the application of this method must be combined with quantitative indicators for a more accurate assessment (Utami et al., 2019). The integration of such a method will help reveal the theoretical potential of the interpretation of the results and reveal paradoxes and questions that require other, atypical solutions.

Conclusion

Identity theft and subsequent theft of funds from potential victims are urgent and require an integrated approach. An ideal analysis picture involves using both quantitative and qualitative methods to determine the validity of the results. Ultimately, efforts are required not only for the security systems of the relevant organizations but also for educating consumers of these services and government decisions that keep pace with technology development.

References

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Berghel, H. (2017). Equifax and the latest round of identity theft roulette. Computer, 50(12), 72-76.

Burnes, D., DeLiema, M., & Langton, L. (2020). Risk and protective factors of identity theft victimization in the United States. Preventive medicine reports, 17, 101058.

Christian, N. (2020). Behavioral strategy analysis using the Fraud Diamond theory approach to detecting corporate fraud in Indonesia. International Journal of Business and Management Invention (IJBMI), 9(4), 66-74.

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Manhica, H., Straatmann, V. S., Lundin, A., Agardh, E., & Danielsson, A. K. (2020). Association between poverty exposure during childhood and adolescence, and drug use disorders and drugrelated crimes later in life. Addiction.

Peprah, W. K. (2018). Predictive relationships among the elements of the fraud diamond theory: The perspective of accountants. Management, 8(3), 141-148.

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Rustiarini, N. W., Sutrisno, T., Nurkholis, N., & Andayani, W. (2019). Why people commit public procurement fraud? The fraud diamond view. Journal of Public Procurement.

Sujana, E., Yasa, I. N. P., & Wahyuni, M. A. (2019, January). Testing of Fraud Diamond theory based on local wisdom on fraud behavior. In International Conference on Tourism, Economics, Accounting, Management, and Social Science (TEAMS 2018) (pp. 12-15). Atlantis Press.

Utami, I., Wijono, S., Noviyanti, S., & Mohamed, N. (2019). Fraud diamond, Machiavellianism and fraud intention. International Journal of Ethics and Systems, 35(4), 531-544.

van de Weijer, S. G., Leukfeldt, R., & Bernasco, W. (2019). Determinants of reporting cybercrime: A comparison between identity theft, consumer fraud, and hacking. European Journal of Criminology, 16(4), 486-508.

Zaeem, R. N., Manoharan, M., Yang, Y., & Barber, K. S. (2017). Modeling and analysis of identity threat behaviors through text mining of identity theft stories. Computers & Security, 65, 50-63.

Zaki, N. M. (2017). The appropriateness of fraud triangle and diamond models in assesing the likelihood of fraudulent financial statements-An empirical study on firms listed in the Egyptian Stock Exchange. International Journal of Social Science and Economic Research, 2(0), 2403-2433.

Zou, Y., Roundy, K., Tamersoy, A., Shintre, S., Roturier, J., & Schaub, F. (2020, April). Examining the adoption and abandonment of security, privacy, and identity theft protection practices. In Proceedings of the 2020 CHI Conference on Human Factors in Computing Systems (pp. 1-15).

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