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| Credit Card Fraud |
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| Basics of Credit Card Fraud: Types, Tactics and Prevention | ||
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| Years ago, most consumers paid cash. Today, most prefer to use their plastic credit cards. Credit cards are convenient, no doubt about it. However, credit cards and credit card numbers can be stolen easily, with disastrous results. Within hours, thieves can purchase thousands of dollars' worth of merchandise or borrow large sums of cash. The unsuspecting consumer gets the bill. | ||
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| If you have never lost a credit card or had one stolen from you, you may feel like credit fraud is not your problem. But the truth is, credit fraud affects us all. When criminals obtain goods or cash through credit fraud, it is the credit card issuer that bears the burden of the loss - a cost it covers by charging higher fees and interest rates from their cardholders. | ||
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| In 2003 more than 500,000 Americans experienced credit fraud, with more than $5 billion stolen in their names. You are at risk but not simply if you have lost your wallet or had your purse stolen. Thieves can operate without laying a hand on your credit cards themselves. | ||
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| Understanding Credit Fraud | ||
| In its simplest form, credit fraud involves use of your credit for purchases or cash advances by someone else. Though often damaging, such cases are normally stopped when you report your card as missing. Other types of credit fraud involve your account information but not your physical card. Such cases may be more damaging, since you may not realize anything is wrong until you notice unfamiliar charges on your monthly statement. Knowledge of your account number, expiration date, Social Security number and billing address may be much more valuable to a thief than the card itself. In the most advanced form of credit fraud - identity theft - someone can use your personal information to take over your credit accounts and open new ones. | ||
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| Other types of credit fraud involve your account information but not your physical card. Such cases may be more damaging, since you may not realize anything is wrong until you notice unfamiliar charges on your monthly statement. Knowledge of your account number, expiration date, Social Security number and billing address may be much more valuable to a thief than the card itself. In the most advanced form of credit fraud - identity theft - someone can use your personal information to take over your credit accounts and open new ones. | ||
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| Types of Credit Frauds and Tricks to Affect it | ||
| A stolen account number can often be just as effective for a criminal as a stolen credit card, especially if information such as the expiration date or your billing address is also available to him or her. You may not know someone is using your account until you notice charges or cash advances you did not make on your monthly statement. | ||
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| Criminals can steal credit account numbers in many different ways, such as collecting them in telephone or Internet scams, copying them from credit cards when the owner isn't looking, or gathering them from discarded receipts or account statements in people's trash. | ||
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| Gathering information from people's trash, also known as 'dumpster diving', is also effective for criminals intending to perpetrate the even more hard-to-catch identity fraud. 'Identity theft' describes when someone uses your personal information, such as your name and Social Security number, to either take over current credit accounts or open new ones using your identity. An identity thief might also rent an apartment, take a job, or even commit crimes using your name, but the identity fraud generally involves using your good credit rating without your knowledge. | ||
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| Tactics for stealing your identity include stealing personal information and then using it to apply for credit or stealing pre-approved credit card offers from your trash and sending them in with a change of address. A clever identity thief can use your name and information for months without your knowledge, sometimes making the minimum payments on any accounts he/she opens so as to keep that credit line available longer. You might not find out what is happening until he/she uses the credit to its maximum limit and then stops paying, causing the creditor to send collectors out to find you to settle the debt. | ||
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| Demographic Picture of Cheaters | ||
| Frauds are defined as 'intentional deception'. Individuals and businesses, due to fraudulent practices or activities, lose billions of dollars every year. Persons who commit fraud have somewhat different demographic characteristics than most other types of criminals. Forty-three percent of those arrested for fraud are female, which is far greater than the proportion of females arrested for other crimes. Approximately 41% of fraud arrests are for middle-aged persons (30-50 years old). Of fraud arrest, 85% are white and 16% are black. Thus, of persons arrested for fraud, they are generally older, white and significant proportion being a female. | ||
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| Preventive Measures by Card Issuers and Shopkeepers | ||
| Credit card companies are taking steps to make credit cards more secure. Some cards display a photograph of the cardholder so criminals can't make face-to-face purchases with a stolen credit card. Most cards have holograms, secret imprints, or hidden images so thieves have a harder time making a new credit card with a stolen credit card number. | ||
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| Thumbprints: Crack Down on Card Fraud | ||
| Shops across the country are now asking customers for their fingerprints as part of the battle to stop credit card fraud. Trial schemes asking shoppers for their personal thumbprint on the back of cheques or credit card receipts are already underway. The trial scheme is voluntary but stores may decide to decline the credit cards of customers who refuse. Prints are not usually kept on a database and slips are destroyed. But police can have access to the thumbprints if the scheme reveals a fraudulent transaction has been made. The scheme is the latest in a series of attempts to curb credit card frauds that range from using stolen cards to counterfeit or cloned cards. Banks would most probably be asked to fund at least half of a new system, which would include a cardholder's details being contained in a chip. A pin number would replace a signature at the point of sale to cut down on fraud. The use of a chip is intended to cut down on skimming; whereby a customer's details are easily copied from a magnetic strip on the back of credit cards and then money is taken fraudulently. | ||
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Consumer Debt Group, Inc. does not provide any legal representation. Consumer Debt Group, Inc. deals with licensed attorneys and our affiliated law firm has attorneys throughout the nation who are credit card debt settlement specialists.
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