MANILA, Philippines – Fraudsters have found a new way to exploit credit cardholders: by intercepting newly issued cards, swapping them with counterfeits, and racking up charges before the customer even realizes what’s happened.

A recent case shared online involved a bank customer who discovered over P180,000 in fraudulent transactions just hours after activating a newly issued credit card. She received what appeared to be a brand-new, sealed card, personally activated it through the bank’s official app, and never used it anywhere — yet her credit card began getting charged for big-ticket purchases that she never made.

Her case is still being investigated by the bank, but from what we know, it looks highly likely that she fell victim to card switching fraud. While it’s not the most common scam, it’s a growing threat that every cardholder should still be aware of.

In this scheme, criminals get access to the newly issued credit card before it reaches the customer, re-emboss a counterfeit version, and send it to the unsuspecting cardholder. Meanwhile, they use the real card for unauthorized purchases.

CCAP executive director Alex Ilagan explained that the modus usually involves a “compromised messenger” that intercepts the card before it gets to the customer.

“Instead of delivering the original bank-issued card, they provide a fraudulently re-embossed card that bears the customer’s name and card number,” Ilagan told Rappler in an interview.

“The customer, believing they have received their legitimate card, activates it through official channels, unknowingly enabling transactions on the fraudster’s account. Meanwhile, the actual credit card never reaches the intended recipient, and unauthorized transactions occur until the fraud is detected.”

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How to keep your credit card safe

If you received a new credit card in the mail, don’t open up the package immediately — inspect it first. CCAP advises customers to carefully examine both the card and its packaging for any signs of tampering. This could include misaligned printing, irregular embossing, or a damaged security seal.

“If anything seems unusual, do not activate the card. Contact the credit card issuer immediately,” Ilagan said.

Once your card is activated, make use of your bank’s security features. Many banks, including EastWest, BDO, and BPI, have a card lock/unlock feature, which lets you disable the card when not in use. For extra security, consider keeping your card locked by default, only unlocking it when you need to make a purchase.

In your banking app, you can also enable real-time transaction alerts through SMS or app notifications, which will alert you for every transaction and allow you to detect unauthorized charges right away.

At an industry level, banks are working to tighten security measures. Ilagan said financial institutions are already flagging unusual spending patterns — such as large transactions immediately after activation — and in some cases, this triggers a temporary block on the card.

According to CCAP, banks are also working on “tamper-proof” packaging and courier monitoring to combat against the card swapping modus specifically.

“Banks are tightening controls over delivery partners, including stronger background checks on messengers or couriers, enhancing internal monitoring to identify irregularities in the card distribution process,” Ilagan told Rappler.

“CCAP continues to work closely with financial institutions and authorities to enhance security measures against credit card fraud, and we encourage all cardholders to regularly monitor their accounts and take advantage of available security features such as transaction alerts and two-factor authentication,” he added.

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What happens if your card gets switched?

If you suspect that your new card has been tampered with — or if unauthorized transactions appear on your account — report it immediately to your bank.

“The CCAP cannot comment on specific cases due to privacy and ongoing investigations, but we want to assure consumers that our member institutions follow strict protocols in handling unauthorized transactions,” Ilagan said.

The CCAP executive director explained that in cases of card switching, merchants are not typically held liable since the fraudulently activated card is still a legitimate bank-issued card. Because of this, it can be difficult for merchants to detect whether the card has been intercepted and switched before reaching its rightful owner, unless there is clear evidence that the merchant “violated proper card acceptance procedures.”

More often, banks are responsible for reversing the charges if the fraud is due to a compromised courier service.

“If the fraud stems from a compromised courier service and the customer did not authorize any transactions, the bank is typically responsible for reversing the charges,” Ilagan told Rappler.

llagan urged customers that have fallen victim to fraud to “immediately report it to their issuing bank, which will conduct a thorough review and implement the necessary actions to protect the customer.” This dispute resolution process includes an investigation and, if applicable, a reimbursement for the unauthorized transaction. – Rappler.com

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Finterest is Rappler’s series that demystifies the world of money and gives practical advice on managing your personal finances.