What is magnetic-stripe fraud?

Magnetic-stripe fraud refers specifically to the re-encoding of card information on the magnetic stripe of a credit or debit card. This type of fraud occurs when fraudsters use specialized equipment to read the information stored on the magnetic stripe of a legitimate card and then transfer or rewrite that information onto a counterfeit card. This counterfeit card can then be used in transactions as if it were the original, allowing the fraudster to illegally access funds or make purchases in the cardholder's name.

This definition aligns precisely with option B, as it emphasizes the process of manipulating the magnetic stripe itself. Other options describe different types of fraud that do not involve the magnetic encoding process directly; for instance, unauthorized use of a lost credit card focuses on the use of a card that has been physically misappropriated, while using fake identification to obtain a card pertains to identity theft rather than the manipulation of card magnetic strips. Using stolen details to access cardholder accounts refers to online fraud or account takeover, which relies on different methods entirely rather than physical card manipulation. Thus, the correct answer highlights the specific technical method involving magnetic stripes, distinguishing it from broader fraudulent activities.