Credit card fraud charges are a form of identity theft in which transactions are charged to a credit card without the knowledge or consent of the cardholder. These fraudulent charges may be made using a card that has been found or stolen, or using card data which has been obtained through illicit means. While identity thieves have developed sophisticated methods for obtaining card information and making credit card fraud charges, US law limits the cardholder’s liability in instances of fraud.
Some credit card fraud charges are made using a card that has been found or stolen. In this instance, the thief has immediate access to many of the cardholder’s details, such as his account number, card expiration date, security code, and signature. Additional information commonly required to complete a credit card transaction, such as billing address, can be fairly easily obtained using a telephone book or the Internet. Even though the thief has possession of a physical card, however, he may avoid face-to-face transactions due to the possibility that he will be asked to provide identification. Therefore, found or stolen cards are often used to make purchases over the phone or Internet, or at self-service payment facilities like those commonly found at gas stations.
As credit cards can be difficult to obtain in large numbers, identity thieves have developed systems for obtaining card details that can be used to make credit card fraud charges without possession of a physical card. Often, this type of theft is carried out by an employee of a shop, restaurant, or other merchant that regularly handles customer credit cards. These thieves may use the stolen data for their own purposes, or may simply gather and sell it.
The data theft process can be as simple as collecting signed, discarded credit card transaction receipts at a restaurant or bar. Often the methods used are much more sophisticated, however. For instance, thieves may install a device known as a skimmer on an ATM or a shop’s credit card reader. When a customer uses the ATM or pays for a purchase with his credit card, this device scans and stores his card details. Stolen card data is eventually used to make purchases that do not require a physical card, as is usually the case with Internet-based merchants.
US law protects credit card holders from accountability for credit card fraud charges so long as the fraudulent charges are promptly reported. Thus, a cardholder should inform her card company immediately if her card is missing. In addition, she should take care to study her account statement each month. If she notices any unauthorized charges to her account, she should contact her card company as soon as possible.