Credit Card Fraud

Credit card fraud occurs when purchases are made using someone else’s credit card or credit card number with the intent to defraud. Common forms of credit card fraud include counterfeiting credit cards, using lost or stolen cards, and fraudulently acquiring credit cards through the mail. Such examples of misuse are the most obvious forms of credit and charge card fraud, but unauthorized use of the number by itself — a more subtle form of fraud called "misappropriation"— is growing in popularity. Today, more than half of all credit card fraud takes place online.

The Title 18 of the U.S. Code, Section 1029 provides the penalties for “fraud and related activities in connection with access devices,” where access devices refers to any means of account access, including credit cards, account numbers, and PINs, as well as telecommunications services and equipment. The laws in the code prohibit things such as producing, possessing, trafficking in, or soliciting for access devices with the intent to defraud.

Though other state and federal law enforcement agencies can also investigate and prosecute credit card fraud cases, the United States Secret Service has primary jurisdiction to investigate threats against its “protectees.” Those threats include credit card fraud, as well as counterfeiting of currency and other Government obligations; forgery or theft of bonds, Treasury checks, and other securities; computer, identity, and telecommunications fraud, and a handful of other crimes affecting federally insured financial institutions.

The Secret Service’s unique authority is exercised in accordance with an agreement between the Secretary of the Treasury and the Attorney General. Penalties for credit card fraud include fines and/or imprisonment for up to ten or twenty years, depending on the specific provisions of the law that has been violated. The maximum sentence for a second offense is twenty years.