Application fraud schemes are serious because, while the victim is not responsible for the fraudulent debt, the victim may not learn about the fraud until it has already damaged their credit score or until after they’ve already made debt payments. ![]() Once the application is successfully processed, the perpetrator will use the new credit card to take out large quantities of cash, leaving the person whose identity was stolen to pay the debt. This fraud may occur if a perpetrator can obtain enough personal information about the victim to completely fill out the credit card application or is able to create convincing counterfeit documents. §1643, limits cardholders’ liability to $50 in the event of credit card theft, but most banks will waive this amount if the cardholder signs an affidavit explaining the theft.Ĭredit card fraud schemes generally fall into one of two categories: application fraud and account takeover.Īpplication fraud refers to the unauthorized opening of credit card accounts in another person's name. ![]() Credit card fraud is a form of identity theft that involves an unauthorized taking of another’s credit card information for the purpose of charging purchases to the account or removing funds from it.
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