Credit Card Fraud Charges and Penalties

While the crime of credit card fraud is not new, it continues to increase in frequency due to the increase in online shopping. In this article, we’ll discuss the different types of credit card fraud, along with the federal and state laws that prohibit such activity. We will also discuss the penalties and defenses available for a person facing credit card fraud charges.

If you’re facing criminal charges for credit card fraud, contact a local criminal defense lawyer to discuss your case.

Types of Credit Card Fraud

Debit and credit card fraud are common forms of identity theft. Over recent years, there has been an increase in the number of credit card fraud cases, as more people rely on the internet to make online purchases and pay bills.

There are a variety of ways a person can commit credit card fraud, including:

• Engaging in fraudulent activity to obtain another person’s debit card or credit card or their credit card information (i.e., phishing for card numbers, security codes, PIN)
• A cardholder making purchases with no intention or ability to pay the bill (sometimes called “bust-out” fraud)
• Selling goods or services to another person while knowing that the other party is using a credit or debit card without authorization
• Skimming another person’s credit card information using a hidden device
• Shopping with a stolen credit card
• Opening new accounts with stolen identification
• Taking over an existing account
• Using a counterfeit card
• Using a lost or stolen card
• Using illegal cards online (wire fraud)

Fraud is considered a white-collar crime. Those convicted of credit card fraud face severe criminal penalties. We’ll discuss these penalties in more detail below.

State and Federal Laws

Both state and federal governments have passed criminal laws to address the issue of credit card fraud. If you’re facing state or federal charges of credit card fraud, it is essential to familiarize yourself with these laws so you understand the potential penalties.

State Laws

Every state has credit card fraud laws prohibiting the illegal possession and use of a credit or debit card. There are also laws that address criminals stealing other people’s account numbers. Lawmakers typically classify these crimes under identity theft.

For instance, Alabama Code punishes the theft of credit or debit cards, identity theft, or the illegal use or possession of identifying information.

California has been at the forefront of credit card fraud statutes for preventing credit card and identity theft. A few key sections of California’s credit card fraud crimes statutes include:

• Theft of access cards or account information
• Forgery of access cards
• Fraudulent use of access cards or account information
• Forgery; equipment for counterfeiting cards

New York also has specific statutes addressing credit card fraud. Some of New York‘s credit card fraud laws include:

• Theft of services
• Unlawful use of a credit card, debit card, or public benefit card
• Possession of stolen property or credit card
• Credit card grand larceny or theft

Laws will vary by state. If you have any questions or concerns, consider speaking with a criminal defense attorney for legal advice.

Federal Law

Under federal law, it is a federal crime for a person to steal or fraudulently obtain a credit or debit card and use it to make purchases. A person who engages in this behavior can face felony charges, with penalties that include lengthy prison sentences and significant fines, as detailed further below.

The federal statutes that address credit card and debit card fraud include:

• Federal fraudulent use of credit card
• Federal fraudulent use of debit card
• Fraud and related activity in connection with access devices

If federal prosecutors are pursuing criminal charges against you or a loved one, consider meeting with a skilled criminal defense lawyer right away. A conviction of a federal crime will significantly impact both your personal and professional lives.

Penalties for Credit Card Fraud

The penalties for credit card fraud depend on the facts of the crime and the severity of the offense. If a person steals a credit card but doesn’t actually use it, they may face misdemeanor charges. A misdemeanor conviction may result in jail time, but often results in probation and fines.

The more sophisticated the crime (e.g., using counterfeit cards), the more likely the alleged offender is to face felony charges. In addition, the more the defendant uses the stolen credit or debit card, the greater the penalty will be.

For example, credit card fraud involving amounts exceeding $1,000 may result in a prison sentence of one to five years. The specific monetary threshold that elevates the crime to a felony varies significantly from state to state.

Federal penalties are often more severe than penalties under state law. This is because federal prosecutors will often only file credit card fraud charges in cases involving substantial financial damage, with penalties that include between 15 and 20 years in prison and fines of up to $250,000.

As for penalties under state law, it depends on the specific state credit card fraud statutes. In New York, a person guilty of theft of services using a credit card faces Class A misdemeanor charges, which carry a penalty of up to one year in jail and fines of up to $1,000. A person guilty of possession of stolen credit cards in New York faces up to four years in state prison and fines of up to $5,000.

Defenses to Credit Card Fraud

To prove someone guilty of credit card fraud, a prosecutor must demonstrate that the defendant had criminal intent. Using someone else’s card by mistake or using a canceled or expired card is not enough.

Other possible defenses to credit card fraud include:

• Actual innocence
• Lack of intent to defraud another party
• Mistaken identity
• Duress or coercion
• Entrapment

The entrapment defense is listed, but rarely works. It is a lot harder to prove entrapment than most people realize.

Seek Legal Advice if You’re Facing Credit Card Fraud Charges

If you or someone you know is facing debit or credit card fraud charges, consider contacting a local criminal defense attorney to discuss your situation. This is especially true if you have prior felony convictions in your criminal history. Repeat offenders risk severe penalties and lengthy prison sentences. Getting a legal expert on your side can make a huge difference.