Credit card fraud is one of the most difficult crimes to catch perpetrators and punish them. In 2008, it about $800 million was stolen from consumers in credit cards frauds in the United States alone. The federal government will not investigate allegations unless they meet a certain monetary threshold, and local authorities do not have the resources to track many of the criminals.
Types of credit card fraud
While many people remain vigilant when their physical credit card goes missing by canceling the cards right away, there are several ways a thief can perpetrate credit card fraud.
First, if a victim’s identity is stolen, the criminal can open up credit card accounts under their name and charge large sums before a person even knows what is going on. Also, an account takeover can occur when a criminal gathers enough personal information about a person, poses as them with the credit card companies and gains access to their statements or online login information.
Also, in recent years computer hackers have broken through security systems at known retailer stores to obtain credit card data for consumers of those establishments.
Finally, a dishonest employee at a bank of Automated Teller Machine (ATM) can “skim” a person’s credit card information off of a transaction and use it for fraudulent purposes.
Consumer liability on stolen credit cards
United States federal law says that cardholders are only responsible for the first $50 of fraudulent charges on their credit cards as long as they sign an affidavit stating that the charges were indeed committed by somebody other than themselves.
If credit card theft occurs over $2,000, the United States Federal Trade commission (FTC) will get involved in the investigation. If the amount is over $150,000 the secret service will become involved. Local authorities investigate amounts under $2,000.
The penalty for credit card fraud is different in each state and is based on the amount that was stolen. Petty thefts are under $250 all the way up to Grand Larceny, which is more than $1,000. The thief will come to a deal with prosecutors to pay restitution to the credit card companies in exchange for less jail time and fines. Jail times vary by state, or if the federal government is involved, but anywhere from one to five years is possible. Also fines for the resources used during the investigation can be assessed as well.
Reporting a theft
Those that are victims of credit card fraud should contact their local police departments and fill out a report. Next contact our credit card company to dispute the charges. A final call or email can be placed to the National White Collar Crimes Center.