Credit Card Fraud Laws

Get credit card fraud help: For victims of credit card fraud and identity theft, and those that can help.
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Credit Card Fraud Laws

Postby CreditCardGuru » Wed Feb 22, 2012 9:05 pm

As a cardholder, you need to be aware of the existing statutory credit card fraud laws as well as the strict punishment involved for those committing such crimes.

By definition, what constitutes credit card fraud?
An ex-spouse, disgruntled family member or even a good friend may try and rationalize that they didn't commit fraud when they used your credit card without permission. Well, whether it was your child, parent, spouse, [former] best friend or a even a complete stranger 2,000 miles away, the definition is quite clear...

When a person uses someone's credit card without the knowledge or consent of the accountholder, it is considered fraud. There are many different ways this crime can happen: lost or stolen credit cards, compromised account numbers through getting caught up in one or more of the retail industry's frequent data breaches, or even stealing a person's identity and opening new accounts under their name. Whatever the case may be, as soon as the victim informs the bank that the charges are not theirs (which usually starts with a verbal report on the phone) the credit card fraud investigation process begins.

What do the credit card fraud laws say?
for the criminal:

Title 18 includes a number of federal laws which may be applicable, depending upon how the crime was committed.

Title 18, United States Code, Section 1028 - In connection with identification documents, authentication features, and information.
Title 18, United States Code, Section 1029 - In connection with access devices (this includes credit cards).
Title 18, United States Code, Section 1030 - In connection with computers.

You can click on the above links for details regarding the minimum credit card fraud penalties on the federal level. There are also state laws and other federal laws which may be applicable. The punishments vary among the misdemeanor and felony classes, depending upon the jurisdiction and specific laws that were violated.

Cases involving less than $5,000 are frequently handled by local/state law enforcement. However if there are multiple victims and/or higher amounts (such as $50,000) the case will likely be handled by a federal agency; the FBI or U.S. Secret Service. The latter of which many find surprising, but keep in mind their responsibilities aren't just protecting the President - the Secret Service also ensures the integrity of the nation's currency.

The punishments are extremely strict and some statutes impose mandatory minimum prison sentences. Furthermore, since often times multiple crimes are committed, there are stiff penalties handed down for each (i.e. credit card fraud + identity theft + providing false information). Serving 4 to 7 years is a real possibility and repeat criminals may face up to 20 years or more. In addition to possible prison sentences, there are also fines of up to $10,000 per offense which are added on to the restitution and court costs.

The lesson? This isn't like getting a speeding ticket. The credit card fraud laws are brutally tough. Aspiring fraudsters should think twice (or more like a thousand times) because the length of incarceration for this type of fraud is sometimes longer than it is for murder! That's because when you receive a federal sentence you have to serve the entire sentence as there is no parole in a federal penal system.

for the victim:

In the United States, there is a federal credit card fraud law that stipulates the consumer is not responsible for any fraudulent charges committed after he/she first reported the card lost or stolen to the bank. The consumer may be held liable for the fraud before the reporting, but the max liability is $50.00. You can learn more about credit card disputes here.
What can you do?
It is important to be aware of your options and rights as a victim. Familiarize yourself with the fraud laws that govern your state. If your credit or debit card was issued outside of the United States, then research cross-border international credit card fraud laws as they will be different from domestic laws (which apply to US issued cards).

Also, check out the FBI website's fraud advice section to learn more about prevention and the applicable laws for this type of crime.

Have a question or want feedback? Ask for free on our credit card fraud help forum.
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Postby JCarter » Fri Apr 13, 2012 3:56 am

You may want to add 18 USC 1341 (Mail fraud), 18 USC 1342 (False name), 18 USC 1343 (Wire fraud) and 18 USC 1344 (Bank fraud) as all 3 can be charged in most cases of credit card fraud. I can provide appropriate references if needed.

ETA added fictional / false name statute.

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