Credit card fraud is a serious crime in which a person uses either someone else's credit card or Social Security number, or uses a fake credit card to obtain some sort of personal benefit. Due to the widespread use of credit cards, this crime is perhaps the most common of all white collar crimes. In fact, in the United States, the number of occurrences of identity fraud is increasing more rapidly than almost all other crimes. One approximation claimed that in 2003, nearly 10 million U.S. citizens had their identity stolen.
It is important to understand that a person who accidentally uses a wrong credit card number has not committed the crime. The activity must be intentional and deliberate. According to the USC, Title 18, Part 1, Chapter 47, § 1028, the person must "knowingly and without lawful authority [produce] an identification document, authentication feature, or a false identification document." Although an accidental crossing over of numbers is an inconvenience for both parties, the actual owner of the card can cancel the order and get a new card to avoid disturbance in the future.
Credit or debit card fraud occurs under certain conditions, such as when a person takes another person's card and uses it to obtain personal gain or knowingly uses an illegitimate card. It may also occur if a person uses a card that is no longer valid. In addition, if the user is aware that there is not a sufficient amount of money in the bank to back up the purchase, this also constitutes as credit card fraud. If the card user is aware that the card was attained by illegitimate means, but uses it anyway in a transaction, this activity is also considered credit card fraud.
Due to the onslaught of online purchasing and banking, it is much easier to obtain credit card information than it used to be. This is associated with internet or computer fraud. Of course, a misplaced purse or wallet is an easy target and provides easy access to card numbers. Important information can also be obtained through receipts or discarded bank statements. Credit card fraud can occur via several tactics besides stolen cards. In addition, application fraud, account takeover, phishing, and skimming are other types of potential fraud and/or identity theft. Another kind of fraud, a "card not present" order, occurs when a stolen card number is used in a purchase that is not made in person. Authorities do not generally look into this kind of identity theft.
Identity theft and bankruptcy commonly go hand in hand. In cases where a person is prohibited from filing for bankruptcy, he or she may choose to file for bankruptcy under another person's name and without the other person's permission. On the other hand, if a person does not have the necessary funds to make a payment, but does not want to file for bankruptcy, he or she may use another person's information without permission to make the payment.
According to the Identity Theft Penalty Enhancement Act, which President Bush signed in 2004, identity theft results in a two-year prison sentence if the person convicted of the activity is charged with other criminal activity. The wording in the Act was not particular to any one kind of crime, so it can have an open-ended effect on how it is employed. Therefore, a person who engages in identity theft (or credit card fraud) via some illegal means, or simultaneously engages in an additional criminal act, would receive at least a two-year prison sentence. Credit card fraud and identity theft can result in various outcomes, depending on the type and extent of the activity.
