Credit Card Fraud
Posted April 22, 2011
This type of identity theft involves an unauthorized taking of someone’s credit card information with the intent of removing funds from the credit card, or charging purchases to the account. There are two categories that credit card fraud schemes generally fall into.
Application Fraud
This is the unauthorized opening of credit card accounts in another person’s name, which can occur if an identity theft obtains enough personal information about the victim to completely fill out a credit card application. It can also occur if the identity thief is able to create convincing counterfeit documents. This is a very serious and damaging form of identity theft because a victim may learn about the fraud not at all, or too late. When the victim does find out, they may have a very difficult time proving that they have been victims of fraud and identity theft.
To help build up useful personal information, a criminal may try to steal documents such as bank statements, or utility bills.
Account Takeover
This is when an identity thief tries to take over another person’s account in these three ways in this order.
- First, they gather information about the intended victim
- Second, they contact the credit card issuer pretending to be the genuine cardholder.
- Ask for mail to be redirected to a new address
The criminal will then contact the credit card company to report the lost card and asks for a replacement to be sent. Some merchants have a new practice to protect their consumers and their own reputation. They ask the buyer to send a photocopy of the statement and photocopy of the physical card and statement to make sure that the usage of a card is legitimate.
Avenues for credit card fraud have been created due to the technological advances of today. With the age of the computer and online shopping becoming a way to shop for many, identity thieves do not actually need a physical card to make an unauthorized purchase. Yes, most online purchases are safe thus making your personal information safe but electronic databases containing credit card data could crash on their own or be hacked. If either of these two things happen customer’s credit card information is released. In addition, the security of many accounts may be put at risk.
You can help to prevent these two types of credit card fraud/identity theft by properly getting rid of documents with personal information.
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