WHAT IS CREDIT FRAUD?

Credit Fraud Statistics

According to a variety of sources, losses to credit card fraud and identity theft are just a fraction of the total amount of credit card spending in the United States. Studies also have indicated losses due to default far exceed those caused by fraud. From that perspective, credit card fraud and identity theft may not seem all that high, but if it happens to you, it can seem overwhelming. But, to victims of credit fraud, these statistics are terrible. Though they may be protected financially, they are forced to endure major inconvenience. Additionally, we all pay for the costs of credit fraud in the form of higher prices, higher interest rates and increased inconvenience.

Types of Credit Fraud

Credit fraud is a broad term for the use of a credit card (or any comparable type of credit) to buy goods or services with the intention of evading payment. Credit fraud includes:

• Identity theft: the unauthorized use of personal identification information to commit credit fraud or other crimes
• Identity assumption: long-term victimization of identification information
• Fraud spree: unauthorized charges on existing accounts

Sources of Credit Fraud

Just as there are various types of credit fraud, there also are different ways that credit thieves gather your personal information:

• Using lost or stolen credit cards
• Stealing from your mailbox
• Looking over your shoulder during transactions
• Going through your trash
• Sending unsolicited email
• Making false telephone solicitations
• Looking at personnel records

Discovering Fraud

There are several warning signs that credit fraud may be occurring:

• Your credit report contains inquiries or information about accounts that you did not open
• Strange charges show up on billing statements
• Bills arrive from unknown or unfamiliar sources
• You receive calls from creditors or collection agencies