Credit Card Fraud

Quick Tips In Avoiding Credit Card Fraud Traps
Credit card companies can make it very difficult for some consumers to avoid paying large fees by concealing important credit card clauses by using tiny print, increasing rates without the consumer realizing, and charging large fees.

If applying for a new credit card there are certain things to look for before deciding if that card will end up creating debt instead of helping. Some credit cards not only charge just to apply for the card, but charge for an acceptance fee if accepted, followed by a charge for the annual fee and for a monthly participation fee. Many credit cards will have a very low credit limit when first approving consumers, resulting in a high number of charges for a card with a miniscule credit line.

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About Credit Card Fraud
In order to avoid credit card fraud the most important thing consumers can do is their homework. Using a credit card just once means that the credit card holder is agreeing to the contract and accepting the terms. Some credit card companies will revise the agreements so it is necessary to check the terms to make sure nothing has changed. If a cardholder does not agree with the new conditions, discontinuation of the card with no further use after notice is received will not bind you to the new conditions.

If you do not pay the entire balance you may want to consider interest rate with the particular credit card. If choosing a card with interest rates it is important to also pay attention to other things, including whether or not the annual fees are disproportionately high, if interest rates are constant or if they increase past a certain mark, if the credit limit is so low it is unattainable, what type of customer service is offered to cardholders, whether or not a grace period exists, and many other details that may come with a catch. For those cardholders that normally pay off the entire balance, then a low annual fee or no annual fee credit card may be a better option.

Certain states using laws do not allow companies to charge late fees. To get around this hurdle many credit card companies have headquarters in Delaware and South Dakota where usury ceilings are more relaxed. Check if you live in a state that does not allow late fees and maybe you can get them removed.
Please contact us to speak with a consumer fraud lawyer with any questions regarding credit card fraud.

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New Credit Card Service Considered A Scam
There are “services” being offered for credit cards that may very well be considered a scam, including credit insurance. This service is sold to cardholders but is often unnecessary according to the Federal Trade Commission. For example, since consumers are not responsible for unauthorized charges anyway, the FTC has come down on some companies for using misleading pitches. Cardholders should be aware of certain selling tactics that are meant to drive them into buying unnecessary services.

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Credit Card Company Profiting Off Gamblers, June 15, 2002
Citibank, the nation’s largest credit card issuer was warned by the New York Attorney General that they could face criminal prosecution for aiding in the promotion of online gambling that is illegal in many states, including New York. Other banks have already blocked online gambling transactions due to the borderline legal issues as well as the high number of customer disputes regarding gambling charges. Internet gambling operations are reportedly suffering because of the credit card company’s warnings or penalties that have been issued according to The New York Times.

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Credit Card Fraud Overseas
With the addition of the Internet and the increase of online commerce credit card fraud has been introduced to a new arena. Now the ability for overseas credit card fraud has made an emergence and was first publicly recognized after the news of a Russian hacker heisting thousands of credit cards from CD Universe Web site. These overseas credit card fraud stints have proven to have little penalty for the international credit card thieves because of the U.S. law enforcement that has encountered difficulties with the laws on white-collar crimes in other countries, jurisdictional questions, the indifference of some governments, and the investigations of credit card fraud being a time consuming and expensive process.

There have not been any instances of prosecuted credit card fraud committed overseas. It has been difficult for fraud officials to curb the overseas credit card fraud criminals because of the small amount of data available on online credit card fraud. It is thought that international credit card fraud nets millions of dollars every year. The stolen credit card information is usually gathered in the old-fashioned way, by stealing the numbers from mailboxes or through card readers by accomplices that work in restaurants or stores. The credit card information is then sent to the thieves overseas as they charge as much as possible in as short a time as possible. The credit card fraud victims realize the high amount of purchases is made after the crooks are and the merchandise is long gone.

In 1999, the Treasury Department’s Financial Crimes Enforcement Network, FinCen, received 120,000 reports with about 4% of them reflecting possible credit card fraud. Due to the gaps in the fraud reporting systems currently there is no way to tell how much U.S. businesses are being affected by overseas credit card fraud. Most instances of credit card fraud does not find the consumers responsible for the fraudulent use of their credit cards online, but the e-merchants have the potential to be greatly affected by online credit card fraud, especially small businesses.

Learn to protect your online purchases from credit card fraud. By using only one credit card for online purchases customers are able to more easily identify if fraudulent charges occur. Since debit cards often do not have a blanket rule under the Fair Credit Billing Act, using a charge or credit card for online purchases can better protect you from risking your entire checking or savings account. Any charges that appear on your statements that may be due to fraudulent purchases should result in you immediately canceling the card.

It should be assumed that any credit card used to purchase online products could be stolen. Smaller online retail sites tend to not be equipped with as many security resources. Contacting a retail site to inquire if the company stores users’ credit card information can allow the user to request their information be removed. If the company refuses, the consumer should not continue to shop there. Solicitations should never be given credit card information, and consumers should regularly check their credit history by using a credit-reporting company.

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History’s Largest Credit Card Fraud Scam
In late 1998, possibly the largest high-tech credit card scams was unveiled. The credit card fraud was “cramming”, what the Federal Trade Commission calls the practice in which consumers are billed for services they neither ordered nor received. What was uncovered was that Charter Pacific Bank of California had sold 4 million credit card numbers to Kenneth Taves and thought they were going to be used to help the Taves detect fraudulent purchases at his business.

When customers called the phone numbers to contest the charges they were thrown into a confusing menu, put on hold and disconnected, and could never reach a live operator. The FTC complaint named Taves, Gary Mittman, and the companies J.K. Publications, MJD Service Corp., and Net Options as the primary vehicles for the scam. Credit card companies have been criticized for not doing everything they can to protect consumers out of fear of slowing e-commerce down, and the FTC believes that as e-commerce continues to grow, so will these types of credit card fraud cases.

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