The History of Credit Card Fraud
Credit card fraud costs consumers and businesses billions of dollars every year. Since the introduction of credit cards in the 1950s, criminals have sought ways to attack the system.
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Types
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Before consumer education, an early form of fraud frequently occurred over the telephone; a criminal posed as an organization representative and offered incentives in exchange for credit card information. Soon, dumpster diving became the preferred method of theft, with criminals searching through garbage for disposed billing statements. Modern-day criminals use packet-sniffing programs on the Internet to steal credit card information electronically. With each method, the criminals would open and access credit card accounts in a victim's name.
Impact
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The 2009 LexisNexis True Cost of Fraud study shows that credit card fraud is the most common form of consumer-facing fraud. In 2008, 24 percent of all retailers, 43 percent of which have a strong online presence, reported an increase in credit card fraud. Retailers lose $100 billion a year to consumer-facing fraud.
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Fact
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In August 2008, Albert Gonzalez and 10 others were indicted in the largest case of credit card fraud in U.S. history. The conspirators attacked TJX and other companies using a computer sniffer program, acquiring more than 130 million debit and credit card numbers. The conspirators used the card numbers to steal tens of millions of dollars.
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