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8 Common types of Credit Card Fraud

How Do Credit Card Frauds Happen?

Credit card fraud is the unauthorized use of a credit or debit card to fraudulently obtains money or property. This crime is the most frequent type of identity theft as of 2019, totaling 246,763 reports and accounting for 45.7% of the overall identity theft reports received by the Federal Trade Commission (FTC).

With this in mind, you do not want to get caught for credit card fraud in Wisconsin. It has caught the attention of federal law enforcement agencies and holds high priority among officials. As you can see from the data above, credit card fraud is extremely common in the US and can negatively impact both the accused and the victim.

While there are several ways credit card fraud can be committed, it will help you to understand the 8 major categories of fraud associated with credit and debit card transactions. According to MasterCard, they include:

  • Lost or stolen cards: This is the most common type of credit card fraud. If you find a credit card on the ground or otherwise in a place it doesn’t belong, report it immediately to best avoid criminal accusations.
  • Account takeover: This occurs when a cardholder unintentionally shares their personal information with a reported fraudster. The alleged fraudster then reports a lost card and address change to the victim’s bank and gets a new credit card under their name.
  • Counterfeit cards: Card skimming is a common way people obtain counterfeit cards, and, as a result, commit credit card fraud. This act involves copying or “cloning” credit cards and using them to make unlawful purchases,
  • Never received: This occurs when a new or replacement credit card is stolen from the mail.
  • Fraudulent application: Applying for a credit card using someone else’s name and information is considered credit card fraud.
  • Multiple imprints: Although rare, this type of fraud occurs when a person records multiple imprints for a single transaction by using a manual credit card terminal, known as a credit card imprinter or “knucklebuster.”
  • Collusive merchants: Believe it or not, merchants may work with fraudsters to defraud banks, deeming them “collusive merchants.”
  • Email order/telephone order (MO/TO) fraud: Among the most common types of credit card fraud is MO/TO fraud, which occurs in “card-not-present” transactions where a merchant has to manually enter the cardholder’s credit card details over the phone or via e-mail. Mo/TO merchants must take certain steps to validate the cardholder’s identity to ensure they are not committing fraud.

Wisconsin Credit Card Fraud Laws

With the information above in mind, it will help you to understand how credit card fraud is codified in Wisconsin’s laws. Each state handles credit card fraud differently, but Wisconsin prosecutors are particularly tough on credit card fraud cases because this is a common offense. Read below to learn Wisconsin’s statutes on credit card fraud:

Procuring a financial transaction card by the use of false written statements: It is illegal to knowingly make false written statements concerning your identity or financial conditions, or that of another person, for the purpose of maximizing your chances of getting a credit card or other financial transaction card.

Theft of a credit card: It is illegal to take another person’s credit card without their consent, as well as take a credit card that has been lost, misplaced, or mistakenly delivered with the intention to use it, sell it, or give it someone other than the authorized cardholder. It is also considered theft if you sell another person’s credit card or buy a fraudulent card from someone other than the authorized cardholder.

Use or possession of a lost credit card: If you don’t return a credit card that you know has been lost, mislaid, or mistakenly delivered within 7 days, it is assumed that you intended to illegally sell it, use it, or transfer the credit card.

Possession of a forged, altered, or counterfeit credit card: It is illegal to forge, alter, or other counterfeit a credit card with intent to defraud a purported issuer, a person, or organization providing money, goods, services, or anything else of value. It is also illegal to sign the back of a credit card that doesn’t belong to you.

Fraudulent use of a credit card: Anyone who is authorized to furnish money, goods, services, or anything else of value when presented a credit card must not defraud the cardholder by intentionally and knowingly using a forged, expired, or revoked credit card to furnish such money, goods, services or anything else of value. Failing to furnish items of value with intent to defraud is also a crime.

Another example of fraudulent use of a credit card is possessing an incomplete credit card with the intent to complete it without the issuer’s (bank) permission. “Incomplete” in this context means a card has not yet been stamped, embossed, imprinted, or written on.

Facing credit card fraud allegations in Milwaukee? Get powerhouse criminal defense from a former prosecutor with 20+ years of experience. To schedule your consultation, reach out to us at (414) 882-8382!