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Credit card fraud is a form of identity theft in which an unauthorized individual makes charges to a victim’s bank card. According to the Federal Trade Commission, in 2015, 17 percent of all identity theft was related to credit card fraud. That is a lot of fraud adding up to billions of dollars in lost funds.
This type of fraud can be subdivided into seven categories.
Application fraud is related to a thief filling out a credit card application under the name and Social Security number of a victim. Once the application is approved, the bank issues a credit card that the fraudster uses to purchase goods and services. Meanwhile, the victim receives the bill and sees a negative effect to his credit score.
Related to application fraud, mail non-receipt fraud crosses the line from identity theft into mail theft, which is a federal crime according to United States Code 18 Section 1708. Mail theft alone can lead to up to five years in federal prison and up to a $250,000 fine. A mail non-receipt crime can mean a new credit card is stolen out of the mail or the application used to apply for new card is stolen.
When a victim loses a wallet or has it stolen, whoever finds it may be tempted to take his credit cards on a spending spree that lasts just as long as it takes to max out the victim’s credit line. Keep in mind that the thief could just as easily be a friend, family member, or stranger in this type of fraud.
Card takeover fraud happens when a criminal gains enough information about the victim to intercept the card in transit from the bank or to added himself on as an authorized user. For example, a criminal finds a credit card statement, an expired credit card, and a tax return in a dumpster. He uses the information to call the bank and have himself added to the account as an authorized user. He then orders a new credit card to be delivered to the victim’s home. He then stakes out the victim’s mailbox and intercepts the credit card before the victim arrives home from work. The criminal now has the means to make charges against the victim’s credit line.
In January, 2012, Forbes published Hacker’s Demo Shows How Easily Credit Cards Can Be Read Through Clothes And Wallets which detailed just how easy it is for an unethical person to collect credit card information just by walking through crowds and scanning wallets and purses. Once he is in possession of the information, he can use the card numbers to make online purchases.
Related to card-not-present fraud, counterfeit card fraud happens when a criminal successfully captures a credit card’s details, then transfers that data to the magnetic strip of a blank card. He can then use card scanners and ATM machines to make purchases and pick up cash.
Not all merchants are ethical. They may add unapproved charges to a perfectly legitimate credit card transaction or sell the credit card numbers collected from customers to fraudsters. Credit card companies are also a type of merchant. Some credit card companies fail to abide by fair trade laws and charge excessive fees that bump up the cardholder’s balance illegally.
Since most banks will not hold a victim of credit card fraud responsible for the fraudulent charges, many criminals consider credit card fraud a victimless crime. This is regardless of the months, if not years, it may take for the victim to prove their case and to recover from the shock to his credit score. Nevertheless, credit card fraud is a crime punishably by imprisonment, restitution, and steep fines.
Whether you are a victim who is struggling to have fraudulent credit card activity resolved or an individual charged with credit card theft, you do not have to fight alone. Let the legal experts at Long Island Criminal Lawyers advocate for you. Don’t find yourself on the losing end of a court case that can change your life forever. Contact us today for a consultation.