Credit Card Identity Theft

Credit card identity theft is the most common form of identity theft. Here is a scenario that is typical for credit card identity theft, adapted from www.creditlearningcenter.com...

...the victim entered a high-end store that sells massage chairs, among other physical therapy items. With an appointment time to meet, she was in a bit of a hurry, bought a smaller item for about $100 or so, but what she really wanted was a high-end massage chair for about $2500. Before leaving, she quickly filled out a credit application for the chair and thinking everything would go through just fine, she left, and let them know she would be back to sign the papers and pick up her massage chair over the next few days.

About a week or so passed, and she forgot to go back to the store and pick up her chair. In the meantime, she got a call from Office Depot inquiring where she wanted to have about $2000 worth of office furniture delivered. "Office furniture?" she thought, "I didn't buy this."

After some investigation, it turns out that the person who worked at the company selling the massage chair helped themselves to our friend's credit application information, such as name, social security, address, etc. The identity theief then had plenty of information needed to open up any new accounts they wanted. So, the thief stayed right in the same mall, opened up multiple accounts, and rang up thousands of dollars in charges. Over time, the identity thief used the stolen information to open up 16 fraudulent accounts! Eventually all these accounts were closed, and, after a major headache of straightening out the whole mess, the person who contributed this story has a new attitude about giving out her personal information.

Now keep in mind that this is just ONE scenario that could potentially take place with credit card identity theft. The most common scenario is when you lose your wallet or purse, someone finds it and begins using your credit card for their benefit. This is why many identity theft prevention experts encourage people to only carry credit cards you know you will use. Many people carry several cards in their purse or wallet and this puts them at a greater risk if these cards are lost or stolen.

The availability of credit today is a major contribution to credit card identity theft. This is why it is very common and why you should be very mindful of credit identity theft. As recent as the 1990's credit was more difficult to obtain. The credit application process was similar to today's process of getting a car loan or mortgage. Creditors needed more information besides your name and social security number. They would need a photo ID and more thorough check of your financial situation in order to lend people credit. However, they found that a thorough screening process was holding back their business and creditors began easing their requirements for lending money in order to generate more business.

There are two major things you should do to prevent credit card identity theft...

...carry only NECESSARY credit cards, and check your credit report twice a year.

These are two simple things you can do to prevent credit card fraud. Click here for more information on identity theft prevention.

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