Credit Card Fraud Penalties

Understanding the Penalties for Credit Card Fraud

As there are a number of ways a credit card can be misused, there are different types of credit card fraud penalties that can be awarded. Depending on various factors like the method used for committing the offence, where the fraud was committed and the financial loss borne by the credit card company, a penalty is levied on the offender – ranging from community service probation to years in prison.

Understanding Credit Card Fraud

To understand credit card fraud penalties, you need to understand the different ways a credit card can be fraudulently used. Here are some of them:

  • Unlawful usage of other’s credit card.
  • Manufacturing duplicate cards and selling them to unsuspecting individuals.
  • Using another individual’s credit card online, by stealing their details through their bank or card account on the net.
  • Providing false information about identity, income etc to the credit card company to obtain a card by swindling the company.

Severity of the Offence

An important factor that determines punishment for credit card fraud is the severity of the crime and the method used. Usually, most of the credit card crimes are committed along with other misdeeds like stealing the physical card or the confidential account details of the victim through the internet.

When an offender steals someone’s card and uses it unlawfully, he will not only be punished for credit card fraud but also for theft. Similarly, when someone steals the confidential details such as personal loans information and uses the card on the internet, it is punishable under both credit card fraud and cyber crime.

The punishment for fraudulent use of a credit card also depends on the money that has been used. Generally, unlawful withdrawal of amounts less than $1000 is considered a misdemeanor and not a severe crime in most parts of the US. Also, if the card is misused in different states, with the offender using up smaller amounts, it may become difficult to detect the fraud and charge the offender for it.

The Law

Depending on their severity, credit card fraud penalties can be handled at the local, state or federal levels. Although credit card fraud is considered a federal crime under the United States Code and Identity Theft and Assumption Deterrence Act of 1998, a credit card fraudster can be charged and tried at different levels in different states, because of the variations in state and local laws.

Punishment

The penalty for credit card fraud depends on the severity of the crime and the financial loss the individual or the company has had to bear. Using a card illegally for an amount less than $500 to $2000 is considered a misdemeanor and attracts minimal punishment of less than a year’s imprisonment and a fine. But repeated usage of the card for several smaller amounts or a large amount at once, leading to greater losses to the credit card company, can attract severe punishment of 15 or 20 years of jail term along with hefty fines.

Credit card fraud penalties also differ based on the criminal’s past record. If the offender does not have any past convictions, the punishment could just be probation and a minimum fine. But it can go up to several years in case of an offender with a similar criminal background.

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