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Crime Overview Credit/Debit Card Fraud

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Credit or debit card fraud is when an individual illegally uses another person's credit or debit card to pay for or purchase an item or service. Credit card fraud also includes opening a new account in another person's name, and using said card for purchases. A thief does not physically need to possess the actual card in order to steal, as they can also easily use just the credit card number. The fraud is generally a form of theft, adjunct to identity theft, as purchases are made with the intention of not personally paying for the items.

Credit card fraud generates millions of dollars in unpaid charges each year, and the costs annually reach into billions of dollars. Often this crime is not prosecuted because the cost to investigate and prosecute any given instance of the crime is greater than the amount charged. Cases in which the amount of fraud is over $2,000 are the ones that area most often prosecuted. Also, the Federal Trade Commission has a policy in place where they will not investigate any fraud cases that are under $2,000. Credit card agencies and banks typically absorb the expenses that have been incurred illegally, and have arrangements to reimburse the merchants, in most cases. Many financial experts agree, however, that everyone pays for credit card fraud, whether or not they are the victims themselves, in higher prices. Merchants which accept credit cards have instituted policies to try to minimize the use of fraudulent credit cards, by requiring photo identification or a home zip code.

If illegal charges are incurred on your credit card, contacting the credit card company will generally get the charges removed. While legally you can be liable for $50 in illegal charges, most of the time the credit card company will not require you to pay this amount. However, being a victim of credit card fraud will take you time to resolve, and could limit your ability to obtain new credit. The best way to avoid being the victim of credit card fraud is by immediately calling the issuer, as most credit card companies have a 24-hour toll free number designated for stolen or lost cards. After the loss is reported, by law an individual is no longer liable for any charges that are unauthorized.

Credit card fraud on a small scale often occurs in restaurants or other service industries, where a tip is given. It is important to verify your credit card receipts with your statements to ensure that you were not overcharged. Because tips are often added to the credit card transactions after you have left the place of service, it is not uncommon to be overcharged. This is often referred to as skimming, typically committed by a dishonest employee of a merchant who is honest. Another form of skimming takes place through the use of a device that can read the magnetic strip of a card being placed over the card slot of an automated teller machine (ATM). If you have discovered that you have been charged more than expected, you should contact the credit card company and the manager of the business to report the problem.

Credit card fraud can happen even when your credit cards were not lost or stolen. Often the card numbers, including the security numbers, are recorded during a regular transaction. The numbers are then held, sometimes for weeks or months, before you will notice unauthorized transactions. To protect yourself from this crime, you should never leave your card unattended. Also, use caution when giving your credit card number out over the phone, and do so with only reputable businesses.

A credit card that has been stolen or lost is still usable until the issuer of the card is notified about the loss. Though some merchants will ask for an ID with the card, the card holder is not lawfully obligated to show additional verification. The use of the Internet and mail in order to purchase goods is growing, and this is a convenient, indirect way for a credit card thief to illegal make purchases.

Credit card numbers can be traced back from receipts, bills, and even in some cases credit card applications. Using a paper shredder will protect you from being a victim of credit card fraud.

If you have been charged with credit card or debit card fraud, make sure to contact a qualified criminal attorney or lawyer in your state as soon as possible after your arrest. This legal professional can help defend you in court and can walk you through every stage of the process. Whether or not you are guilty, it will be in your best interest to have legal representation on your side if you have been accused of this crime.