When your credit card gets stolen, it’s nothing short of a major inconvenience. Whether your physical credit card gets stolen or someone obtained your credit card information to make large purchases, it can be quite costly to you. If you are able to discern who actually stole your credit card, that person will face penalties for using a stolen credit card. The nature of the penalty is determined by the type of theft, the amount charged on the credit card and the law of the state where the card was stolen. In some cases, it may even be charged as a federal crime.
TL;DR (Too Long; Didn't Read)
Credit card theft can result in hefty fines and jail time, both at the federal and state levels.
Types of Credit Card Theft
It’s obvious when one of your physical credit cards goes missing, but credit card theft isn’t always so obvious. While many thieves steal physical cards from wallets, mailboxes or trash cans, others are more stealthy about getting the credit card information they want.
Often, credit card numbers are obtained through the use of credit card skimmers at ATMs, gas stations and other points of transaction. A skimmer is placed on the machine that reads the credit card and then sends the information back to a computer, where it can be used to make purchases and open accounts.
Credit card information can also be obtained through data breaches at retailers, online portals and other establishments that collect your personal information. Though these portals are typically secure and encrypted, sophisticated thieves have found ways to access the information they want.
If strongly motivated, some thieves can even use a receipt, trashed bank statements or email phishing schemes to get access to your credit card number and personal identification. With this information, they can make purchases, open accounts and wreak havoc on your credit report.
State Penalties for Using a Stolen Credit Card
When a credit card is stolen, and the information is illegally used to make a purchase or open an account, that is considered fraud. The act of stealing the card itself or your personal information is considered theft. Both fraud and theft are crimes that come with significant penalties. Depending on the state, credit card fraud and theft is charged as either a misdemeanor or a felony. A misdemeanor charge typically comes with fines up to $1,000 and jail time of up to one year. A felony charge comes with much larger fines and jail time of up to 20 years. How much was stolen, concurrent crimes and previous convictions all play into how credit card thieves are charged. They may even be charged for forgery if they signed the legal credit card holder’s name.
In addition to criminal charges, someone who steals a credit card may face civil charges from the person whose information was stolen. While many times the thief is ordered to pay restitution to the credit card companies or other institutions he stole from, you may be able to recover damages from the thief if you lost money or were otherwise harmed.
Federal Penalties for Using a Stolen Credit Card
If the person who stole your credit card racks up more than $1,000 in charges within a year of the theft, she will be charged with a federal crime. It is also a federal crime to intend to defraud someone and to do such things as use counterfeit access devices, traffic in device-making equipment and solicit a person to offer a fraudulent access device.
A person charged with federal credit card fraud faces up to 20 years in a federal prison, a fine of up to $250,000 or both. The person whose information was stolen is only responsible for unauthorized credit card charges of up to $50, no matter how much was stolen.
If you find out that your credit card has been stolen or you notice suspicious activity on your account, notify your credit card company and the local police as soon as possible. That gives them the best chance to stop the activity and dole out the appropriate penalties.