Credit Card Fraud Act
The Credit Card Fraud Act of 1984 modernized the federal definition of what constitutes the fraudulent use of a credit card. The law imposes prison terms of up to 20 years for committing card fraud--or even attempting it. The act is found in Title 18, Section 1029 of the U.S. Code.
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Significance
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Prior to 1984, federal law recognized something as "credit card fraud" only if a person actually used a credit card--a physical piece of plastic--to commit fraud. According to the Justice Department, Congress passed the Credit Card Fraud Act to give the federal government an expanded definition of the crime to go after people who commit fraud.
Definition
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The most significant change to come out of the 1984 law was that you no longer had to use a plastic card to be charged with credit card fraud. Under the new law, you only had to use an "access device" to commit fraud--with "access device" defined as anything used in a credit card transaction. This includes cards, account numbers and personal identification numbers (PINs), as well as the electronic equipment used to process credit card transactions, such as card readers and the modems used to authorize cards.
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Provisions
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The law makes it a federal crime to make, use, possess or sell counterfeit access devices. However, using an "unauthorized" access device--a genuine device that is stolen or expired--is a federal crime only if you use it to obtain more than $1,000 worth of goods or services in a year. The law also prohibits possession of electronic equipment if you intend to use it for credit card fraud. Finally, the law says that attempted credit card fraud is the same as actual credit card fraud. It doesn't matter whether the attempt is successful--you're subject to the same penalties.
Penalties
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Violating the Credit Card Fraud Act is punishable by up to 15 years in prison, plus any fines and restitution the judge may order. On a second offense, the maximum sentence rises to 20 years. You'll also be ordered to forfeit any personal property you used to commit fraud.
Limits
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The Justice Department says the requirement that the defrauded amount be more than $1,000 was included so that the federal government could focus on cases more likely to be the result of organized crime. One-time offenses and frauds involving small amounts are left to state authorities to handle. Also, the law specifies that the prohibited actions must be taken "knowingly and with intent" to qualify as credit card fraud under federal law. If you accidentally use an expired card--or a friend's card--to buy more than $1,000 worth of stuff, you won't be prosecuted if you can prove it was a mistake.
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References
- Photo Credit credit card image by jimcox40 from Fotolia.com
