«If it's a merchant I haven't heard of it...» You are right. However, examine your pattern of purchases: if you are like the typical consumer, most of your pur

«If it's a merchant I haven't heard of it...» You are right. However, examine your pattern of purchases: if you are like the typical consumer, most of your purchases are made at the same merchants that you have been shopping at for years and already trust. «How big of an issue is this in practice» It's a huge issue in some markets (eg. online shopping.) I can't remember the stats but CC fraud actually has bankrupted some merchants because it is so prevalent. Dishonest clients are a lot more common than dishonest merchants. It's easy to understand why: by being dishonest, a merchant damages its reputation instantly, however if someone attempts to use a stolen CC and gets flagged, he would simply try another CC number or try another merchant.