Credit and Gift Card Fraud is a Form of Identity Theft

There are several forms of identity theft. Some involve the use of identifying information to create fake passports or national identification cards, others obtaining usernames and passwords to unlawfully use online memberships or services.

On the other hand, a significant amount of identity theft is committed to fraudulently obtain money, goods, or services. One type of identity theft carried out for a financial windfall is credit card and gift card fraud.

Two Types of Credit Card Fraud Under Federal Law

Federal law makes it illegal to unlawfully use, obtain, copy, or falsify a credit or gift card, whether originally belonging to another person or not.

Within this expansive definition of credit card and gift card fraud are two separate types of fraudulent activity: application fraud and account takeover.

  • Application fraud. Application fraud is fraud involving the application or paperwork to obtain a credit card. This can be the use of a false name, social security number, or other personal information to open a credit account. In most instances, this is opening an account in the name of another person.
  • Account Takeover. Account takeover is an equally common type of fraud that involves the criminal use of a credit card opened and activated by the victim. Schemes such as skimming and changing personal information on the credit card account are forms of account takeover. A huge amount of account takeover now occurs through online purchases and transactions.

What Is the Federal Law on Credit Card Fraud?

Under federal law, there is a general statute on fraud, fraudulent documents, and fraudulent activity. The majority of frauds, for example, fraud against an agency of the U.S. government, are prosecuted under this statute. An exception is credit card and gift card fraud.

Despite credit card fraud being a type of identity theft, the U.S. Code has a specific statute to cover acts of credit card, and similar, frauds. This statute is separate from the other fraud provisions in Chapter 47 of the U.S. Code and is located in Chapter 41 at 15 U.S. Code § 1644.

What specific acts constitute credit card or gift card fraud?

  1. The use or conspiracy to use a fraudulent credit card
  2. In a transaction affecting interstate commerce or foreign trade, and
  3. The defendant knew the credit card was “counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained.”

Other acts involving the use of fraudulent, counterfeit, and altered credit cards are also criminalized under 15 U.S. Code § 1644.

This includes:

  • Transporting or attempting to transport goods through interstate or foreign commerce, when the defendant knew the goods were obtained through credit card fraud;
  • Selling or transporting fraudulent or fictitious credit cards and gift cards through interstate commerce or foreign trade;
  • Knowingly receiving, using or concealing goods, services, money, or anything of value that was obtained through the use of a fraudulent credit card in interstate commerce or foreign trade; and
  • Providing or obtaining money, goods, services, or anything else of value in interstate commerce or foreign trade through the use of a fraudulent, false, or altered credit card.

Have You Been Accused of Credit Card Fraud?

Investigation and accusations of credit card fraud are overwhelming for many defendants.

Whether entirely baseless or not, these accusations can impact your financial future, ability to obtain credit or a loan down the road, and even apply for certain jobs or licenses.

Fraud investigations also involve substantial documentation and take a lot of time – these aspects add to their complexity.  In short, if you are facing accusations of credit card fraud, you need to act now.

Upon learning of potential charges for credit card or gift card fraud, there are affirmative steps you can take in your defense.

  1. Learn the law.  Gain an understanding of the laws and regulations that will impact a federal investigation and criminal trial for credit card or gift card fraud. You need to know more than an overview of the federal law. You also want an understanding of where your actions, innocent or not, fall under the law. This is where a lawyer steps in and offers confidential and consistent advice that is in your best interest.
  2. Gather Evidence.  Compile documents that support your innocence or possible acquittal due to procedure. This includes bank statements, online transactions, purchases, credit card applications, and any other supporting documentation or information. Everything should be provided to your defense lawyer through confidential means.
  3. You Have The Right To Remain Silent.  Avoid speaking to investigators. Unless federal law enforcement has a warrant for your arrest or subpoena for your testimony under oath, you are under no obligation to answer questions or speak with investigators. You can always turn to a federal defense lawyer for advice on how to interact with federal agents during an audit or investigation.
  4. “Beyond a Reasonable Doubt.”  As are other white-collar crimes, credit card, and gift card fraud require substantial documentation to connect the dots between each element of the crime. It is difficult for a prosecutor or investigator to obtain a great deal of this documentation without a warrant, and there needs to be probable cause for a judge to issue a warrant. While you should comply with all laws during an investigation, you don’t have to turn over any information or documentation not specifically required by a warrant.
  5. Maintain Compliance.  Cease any activity that is or potentially is criminal in nature. Whether this is putting a stop to the specific online activity or halting certain business operations, you don’t want an investigation to uncover current actions that lead to other indication of credit card or gift card fraud.

Let the Criminal Law Group Help You

One of the most important steps you take in your defense is hiring legal counsel. The sooner you start to build your own evidence, documentation, and defense strategy, the better.

You need a federal defense lawyer that is experienced in credit card and other frauds and understands the specifics of your case.

This takes both knowledge and trustworthiness – qualities you want in a federal defense lawyer for any case.

Find a top lawyer for credit card and gift card fraud at the Criminal Law Group.