Credit card fraud law establishes criminal penalties for the fraudulent use of a credit card. If convicted, a defendant may be sentenced to jail or prison and be required to pay restitution to the victim.
Types of Credit Card Fraud Crimes
Credit Card Fraud is the fastest-growing type of financial crime. The following are the most common types of credit card fraud crimes:
- Not Present (CNP) fraud (or card not present fraud), where a customer (or their representative) uses a stolen credit card to make purchases over the phone, by mail, or on the Internet;
- Card-Not-Present (e-Commerce) fraud, where a thief gains access to secure information to make a purchase online;
- Account takeover where thieves use personal information like an email address or Social Security number along with a stolen password to steal money;
- Application fraud, where a thief submits a credit card application on behalf of someone else or buys or applies for several types of credit cards at once using multiple addresses;
- Skimming, where a thief reads and copies your credit card's magnetic stripe data for later use;
- Wireless credit card data theft, where thieves use a hand-held device called a Bluetooth skimmer to steal credit card information from cards in a victim's possession.
Schemes to get control over credit card accounts are constantly evolving in the hope of evading law enforcement. However, our different types of fraud are typically characterized in one of two ways. The first is "card present" crimes where the victim's stolen physical credit card. This category includes schemes to apply for new credit cards in the victim's name or change the address on the victim's account and then request replacement cards.
All other forms of credit card fraud involve using stolen credit card information to make a purchase. These are called "card present" crimes because the thief can access the cardholder's physical credit card. On most cards, the cardholder's name and the first six digits of the credit card number are visible.
Skimming machines and phishing sites are two examples of how individuals and companies can lose money to credit card fraud. Skimmers and phishing sites are dangerous for their victims because neither is detectable.
A skimmer is a device placed over an ATM or gas pump terminal that records data when customers swipe a card. These skimmers go unnoticed by customers, which means people can unknowingly enter their credit card numbers into a skimmer without knowing it.
While phishing websites are faked replicas of legitimate sites crafted to look as authentic as possible. Victims who log into these pages are tricked into entering their credit card information into what they think is a legitimate site when their account is compromised.
A criminal conviction can impact your career and future. Many employers will ask about your criminal history. Your criminal record can be shared with private entities, such as banks, schools, and banks.
When legislatures draft criminal statutes involving credit card fraud, they do not try to identify and prohibit every potential scheme. Instead, they write laws in general terms meant to encompass the various schemes and assign penalties based on the total dollar value of the items stolen or cashed in.
Stealing somebody else's credit card could be considered a form of theft or larceny and usually carries a penalty of up to one year in jail and a maximum fine of $1,000. Some jurisdictions would consider stealing a credit card number as a form of identity theft, which can carry substantial fines and jail time.
The consequences of stealing a credit card number depend on the card's value, and by that, I mean the purchasing power, which usually ranges from a misdemeanor to a felony. If stolen cards are used to purchase merchandise, the merchandise might be recovered or sold for a fraction of its value; the proceeds might be used to pay penalties, resulting in a substantial loss for the cardholder. If the cardholder is an individual rather than a business, the cardholder might have a Chapter 13 or Chapter 12 bankruptcy; in either case, there are limitations on what a person is allowed to own. This is an area where legal assistance may be needed.
Criminal Justice for the Defendant
Serious charges involving credit card fraud are taken very seriously by prosecutors because of the public perception that their efficacy will reward criminal behavior and their other implications under federal law. Few other criminal offenses carry the stigma associated with credit card fraud.
Public outcry over identity theft in recent years has led prosecutors to aggressively prosecute these cases, especially involving victims outside the local community. Because of the universal availability of credit cards, there are several potential victims, and prosecutors want to ensure that all will hear the "message" they send.
If you are facing any white-collar crime charges, especially including credit card fraud, it is essential that you turn to an experienced lawyer to protect your rights. The consequences of a conviction could follow you around for a long time, even affecting your ability to obtain employment.
This is especially the case since professionals who specialize in these situations will be better equipped to convince the judge of the unique circumstances of the defendant's personal life and why the defendant should be given a second chance.