Credit Card Theft

Credit card theft generally occurs when a person steals another person’s credit card or credit card information and uses or attempts to use that credit information without authorization.

Credit card theft is considered a form of identity theft. Thieves use a portion of someone’s identity — their credit card information — to make fraudulent purchases or to access cash advances.

Credit card fraud is very, very common. It’s estimated that 47% of Americans have had their card information compromised at some point. The federal government puts the number of cases per year at 9.5 million.

How Is Credit Card Theft Accomplished?

Credit card theft is somewhat unique in that the actual, physical card does not need to be stolen in order to accomplish the crime. Instead, the thief often gets hold of information such as the credit card account number, the person’s password, and their personal information such as their date of birth, address, social security number, etc.

This can be done through a number of means associated with identity theft crimes. Examples include:

• A thief hacks into your computer or online accounts to retrieve information
• The thief perpetrates scams or fraud schemes aimed at obtaining your information
• Theft of other physical items that contain your data (such as a wallet or purse)
• An identity thief may lure you to a fraudulent website where you are tricked into providing your card number. The thief then uses your credit card information for fraudulent purchases.
• An unscrupulous waiter steals your card number
• A thief digs through your trash, finds discarded receipts or credit card statements that include your account number, and uses that information to rack up fraudulent charges
• You swipe your card at your local ATM or at the gas pump. Later, you notice fraudulent purchases on your credit card statement. Someone may have installed a credit card skimmer to steal your account information. A credit card skimmer is a small device that thieves can install anywhere you swipe your card. Skimming has proven to be a very effective way for thieves to steal credit card information.
• Your credit card number could be exposed in a data breach that hits one of your favorite retailers. Thieves use this information to rack up online charges with your credit card account numbers.
• It is possible to buy stolen credit card numbers on the dark web. Credit card numbers are valuable to thieves, and they aren’t shy about visiting illegal markets to get them.
• If identity thieves can get access to personal information (through a data breach or some other method), they might be able to use it to apply for a new credit card, loan, or line of credit in the victim’s name. Or, they might blend information from several victims to create a false identity.
• Fraud can happen when someone intercepts your new or replacement card from the mail.
• The thief may commit scanner theft, by which they reroute information and money that a scanner picked up when you made a purchase to their own account.

How Is Credit Card Theft Punished?

Credit card companies investigate fraud. If the company notices a strange pattern of items posting to someone’s account, or if the victim reports the fraud to their credit card company, the issuer’s internal investigation team will begin by gathering evidence about any disputed transactions. It may check for things like who made the disputed purchase, the IP address of the person and the purchaser’s geographic location.

If the crime appears to be part of a larger pattern or organization, the card issuer might alert the FBI or other law enforcement officials. The card issuer must send a letter confirming it received your fraud report within 30 days. It then has 90 days to complete its investigation.

Federal law limits the liability of cardholders to $50 in the event of theft of the actual credit card, regardless of the amount charged on the card, if reported within 60 days of receiving the statement. If the physical card is not lost or stolen, but rather just the credit card account number itself is stolen, then federal law guarantees cardholders have zero liability to the credit card issuer.

Most credit card fraud cases that lead to criminal charges are handled at the state and local levels. Different states prosecute fraud differently. (There are also federal statutes that govern interstate and foreign commerce, making it illegal to use a stolen or fraudulently obtained credit or debit card. Federal prosecution is usually limited to criminals who perpetrate fraud against huge numbers of victims). The severity of punishment depends on multiple factors, including the amount stolen, the fraudster’s criminal history, whether they had criminal intent (as opposed to an accidental misuse of credit card information) and whether the victim was elderly.

Is credit card fraud considered a felony or a misdemeanor? That depends on the state in which the crime was committed. Different states have different penalties and classifications for credit card fraud. Whether credit card fraud is a felony could also depend on how much a thief racks up in fraudulent purchases. The crime is punishable by a jail or prison sentence, which often depends on how much was stolen. Also, the defendant may sometimes be required to pay criminal restitution in order to reimburse the victim for losses caused by the theft.

What is the sentence for credit card theft? States vary, but typically a misdemeanor credit card fraud conviction is punishable by up to one year in county jail and a fine of up $1,000. A felony credit card conviction is punishable by a few years in jail and a fine of up to $10,000.

How Can Credit Card Fraud Be Prevented?

By taking a few simple safety measures, you can reduce the risk of credit card fraud.

For example:

• Never share your credit card or PIN number information with a company you don’t trust
• Never leave cards out in the open
• Immediately shred your credit card receipts
• Don’t write PIN numbers down and keep them in your wallet
• Signing up for online statements so you can view charges right away.
• Regularly obtaining your credit reports so you can see if someone else took out a credit card in your name

Do I Need a Lawyer for Help with Credit Card Theft?

If you believe that you have been the victim of identity theft, contact your credit card company as soon as you can. The sooner you act, the better chance you have at protecting your rights and recovering any lost assets or finances.

On the other hand, if you are involved in a credit card theft violation, you may wish to speak with a fraud attorney in your area. Hiring an attorney can ensure that your rights are protected, and that you are informed of all the possible courses of action.

The attorney will represent you at any court hearings or trial, and will negotiate with the prosecutor to get you the best possible outcome. They can also provide you with legal updates if there are changes in the law that might affect your legal rights and options.