Discussing How Credit Card Fraud is Committed

Have you been defrauded of your credit card information? How did you find out about it, and what did you do? Recent reports indicate that business losses due to credit card fraud could reach an overwhelming amount of $20 billion by next year.

The biggest cause of these losses is identity theft whereby a fraudster poses as the owner of the credit card when calling the credit card company, and is able to provide all the right information regarding the card owner’s identity, and gets an approval for various transactions, often in huge amounts.

How is Credit Card Fraud Committed?

There are various ways that credit card information can be stolen. One is when you use it online for a purchase at a site that is not trusted. The site obtains your card information – card number CVV, etc., and people involved in the fraudulent business could use it for other transactions.

Another way is phishing whereby you are sent an email and you are asked to provide your credit card information. You are given a website link to click; the website looks like that of your banking institution.

You are then required to fill up a form that requires your card info. Another way is when you download content from the internet that could contain spyware or malware that is able to record what you input into the computer.

In these instances, there will always be people involved in committing the crime, and these people may be employed by dubious companies that intend to commit fraud. The employees are also well aware of their role, that they are committing fraudulent activities.

There have already been numerous reports of companies being raided and closed because they were found committing credit card fraud, and amassing millions. So is the business or company criminally liable in these instances? Yes they are.

If the fraudulent acquisition of the credit card information was done by an agent or employee knowingly, and on behalf of the company with the purpose of committing fraud, then it is criminally liable, and can be prosecuted under the law.

Criminal Liability of a Business

A business can be held criminally liable under the U.S. federal laws, as well as laws of the state. As mentioned, a business can be accountable for the criminal or fraudulent acts of an employee if he/she has done it based on his job requirements, and if the business is the recipient of the benefit that will be derived from the crime.

Once the intent to commit fraud has been established, the prosecutors will have to further evaluate the case if there is indeed a probable cause, using several guidelines. It is important to evaluate the following factors before prosecution:

  • Has the business been previously convicted of a similar criminal act?
  • What is the nature of the criminal offense?
  • How serious is the criminal act?
  • How widespread was the fraudulent act carried out by the business?

Prosecutors may also look into the criminal liability of those directly in-charge of the business operation. If there is a high probability of guilt, they could be charged individually and separately.