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How Credit Card Fraud Occurs

Credit card fraud is a widespread problem that affects the entire consumer credit industry. No doubt you have heard of various instances of credit card fraud, and are aware that it takes on many different forms. You probably are also familiar with the suggestions of how to protect yourself from credit card fraud personally. But how does credit card fraud occur?

Credit card fraud takes place in many different forms, and there are a variety of contributing factors that enable it to occur.

The consumer credit industry has many experts who are specifically trained to deal with and explore the many aspects of credit card fraud. An overwhelming number of credit industry fraud experts believe that one of the biggest openings for credit fraud comes in the form of the consumer's credit report. Although credit report information is supposed to be kept confidential and only released for legitimate purposes, the fact remains that it is relatively easy for criminals to get ahold of consumer credit reports. Many employees for credit card issuers, banks, or retail stores have the ability to gain access to credit reports on consumers (even thousands per month, in some instances) to determine their creditworthiness or potential risk.

Unfortunately, allowing such a large number of people to have access to these reports means that consumer credit reports often end up in the wrong hands, and that is when credit card fraud begins. The information contained in those reports gives the criminal exactly what he needs in order to assume a new identity - along with a falsified credit history. Other sources of personal identity information (including social security numbers and personal account numbers) also contribute to this accessibility.

The most common occurence of credit card theft happens when items containing your personal information (such as wallets, purses, briefcases, etc) are lost or stolen. This obviously gives the criminal direct access to the information contained on your driver's license, social security card, credit cards, and the like.

Another contributing force in the problem of credit fraud is the existence of information brokers. No, they aren't just in movies and novels - these people really do exist and operate in today's society. Their sole purpose and source of income is to gather any and all information they can get their hands on about you, the consumer and then sell that information to anyone who is willing to pay the price. That often includes banks, insurance companies, private investigators, and yes even criminals. When that wealth of information falls into dishonest hands it is abused in many ways, one of the biggest of which is credit card fraud. And it falls to the innocent victimized consumer to pick up the pieces after their formerly good credit rating has been left in a shambles by a fraud artist.

A common practice for credit card identity thieves is the simple act of mail theft. When a criminal is able to intercept a pre-approved credit card application from an unsuspecting consumer's mailbox, all he has to do then is to call the issuer of the credit card offer and request that the mailing address be changed. Many credit card issuers will make a change of address without requiring any further verification, and subsequently the new credit card will be mailed directly to the criminal. The consumer never has a clue what has taken place in this case until after the fraudulent charges show up on the consumer's own personal record.