Credit Card Fraud Investigation: Understanding How The System Works
Credit card fraud costs finance companies hundreds of millions of dollars annually
. The conviction rate for credit card theft cases is a dismal 5%. Federal and local governments have varying roles in these fraud investigations.
If you've been the victim of credit card fraud contact your local police right away. Make sure you obtain a copy of the report or get a case reference number. This information may be required for verification purposes when you contact your credit issuer to report unauthorized charges.
It's important to follow-up your telephone conversation with your creditor with a letter of confirmation regarding your case. Always good to have it on paper for later references if needed. Also notify the fraud divisions of the three major credit reporting bureaus. They are Equifax, Experian and Trans Union.
Once your credit card company is aware that your card has been misused, the issuer will cancel the existing account and refuse to honor any future charges. The cc in question will be listed as lost or stolen on national and regional warning bulletins. Any legitimate charges that you made on it prior to reporting its unauthorized use will be transferred to a new account. Your company will then mail you a new card.
New technologies allow the majority of credit card companies to identity fraudulent charges and act promptly to stop the illegal activity. This technology becomes evident when are contacted by your credit card company for verification when you charge an unusually large purchase or use the card outside of your home state or country. As a safeguard measure your card using privileges may be placed on hold until you speak with the company to verify that you made the charges. It's best to let your credit company know in advance if you plan to make any major purchases or will be traveling.
The U.S. Secret Service has jurisdiction over credit card crimes if the credit card is owned by an American bank. The federal government considers the bank to be the victim of the fraud, rather than the cardholder. This is due to the fact that under federal law your maximum liability for an unauthorized purchase is $50. The Secret Service does not investigate credit losses under $100,000, which the agency defines as a minor loss.
The Federal Trade Commission or FTC typically does not investigate fraud cases involving less than $2,000. If you file a complaint with the FTC your information is entered into an online data base called Consumer Sentinel. The information is accessible to hundreds of civil and criminal law enforcement agencies across the U.S. and in some foreign countries.
When an alleged thief is arrested for credit card fraud he can be charged with either a misdemeanor or a felony depending on where the crime occurred.