credit card fraud | Definition

Doc's CJ Glossary by Adam J. McKee
Course: Criminal Law

In the criminal law context, credit card fraud refers to using a credit card or credit card information in a fraudulent or unauthorized manner.

Credit card fraud is a prevalent and damaging crime in today’s society, where most financial transactions have shifted to digital platforms. In the context of criminal law, credit card fraud refers to any unauthorized or fraudulent use of a credit card or credit card information. This involves using the card or the information linked to it without the owner’s consent, typically with the intention of gaining something of value. This crime is viewed seriously by law enforcement and courts due to the financial harm it can cause to individuals, businesses, and the economy as a whole.

Types of Credit Card Fraud

There are several ways that credit card fraud can be committed, each varying in its complexity and impact.

Stolen Credit Card Use

One of the most straightforward forms of credit card fraud involves the physical theft of a credit card. In this scenario, the thief uses the stolen card to make purchases or withdraw cash from ATMs. Because the card is used without the cardholder’s knowledge or consent, these transactions are fraudulent.

Card-Not-Present Fraud

With the rise of online shopping, a new form of credit card fraud, known as card-not-present fraud, has become increasingly common. This type of fraud involves using someone else’s credit card information—like the card number, expiration date, and security code—to make purchases over the Internet or phone without the cardholder’s consent. The fraudster may obtain this information through various means, such as phishing scams, data breaches, or by skimming the card’s details during a legitimate transaction.

Application Fraud and Identity Theft

Application fraud is a more sophisticated form of credit card fraud that involves identity theft. Here, the criminal uses another person’s personal information—like their name, date of birth, and Social Security number—to apply for a credit card. Once they receive the card, they can use it to rack up charges, leaving the unsuspecting victim with the bill.

Counterfeit Card Fraud

Counterfeit card fraud involves creating a fake credit card using stolen credit card information. These counterfeit cards can look remarkably like legitimate cards and can be used until the fraud is detected and the card is blocked.

The Consequences of Credit Card Fraud

This is not a victimless crime. It causes significant financial losses for individuals and businesses alike. Individuals who are victims may find themselves saddled with unauthorized charges and may have to go through a lengthy process to dispute the charges and secure a refund. Their credit scores may also take a hit, affecting their ability to secure loans or other forms of credit in the future.

Businesses, particularly those that operate online, bear the brunt of card-not-present fraud. They may end up shipping goods or providing services that are not paid for, leading to financial losses. They may also be liable for chargeback fees when the fraud is detected.

Legal Penalties

Given the serious harm that this type of fraud can cause, it is treated as a serious crime in most jurisdictions. Depending on the severity of the crime and the jurisdiction, penalties can include hefty fines, probation, and imprisonment. Additionally, convicted fraudsters may be required to pay restitution to their victims, compensating them for their financial losses.


Credit card fraud is a multifaceted crime that can cause substantial harm. It’s a serious offense punishable by law, with consequences that can ripple out to affect individuals, businesses, and economies. By understanding what it entails, we can all be better prepared to recognize and prevent it, protecting ourselves and others from its detrimental effects.

[ Glossary ]

Last Modified: 05/15/2023


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