Credit Card Fraud

Facing a credit card fraud charge can be unsettling to you and your loved ones. Credit card fraud is a common and serious offense in Los Angeles, California; it can attract serious penalties including jail terms of 10-15 years depending on the nature of the crime and the criminal record of the defendant. It can be charged alongside other crimes such as identity theft and data breaching; therefore, you will need to seek legal assistance to help you in fighting the charges. LA Criminal Defense Attorney is a team of legal experts with the experience and skills in evaluating credit card fraud cases and preparing a strong defense for the case.

What Is Credit Card Fraud?

Credit card fraud is a form of financial fraud, which involves the unauthorized use of someone’s credit card or credit card information to make purchases or take money from the victim’s account or to perform any transaction that gives the user an unmerited gain and causes loss to the victim. The fraud also involves using your own card after its expiry or revocation or paying for items exceeding the balance available in the card with the intention of avoiding payment. Receiving money or services using a stolen credit card falls within the crime of credit card fraud. In most cases, credit card fraud begins with the theft of the actual card or credit card information associated with a particular account.

Forms of Credit Card Fraud

Credit card fraud is an umbrella term describing various forms of violations involving credit cards. California penal code PC 484 (e-j) covers the various forms of credit card fraud. They include:

  1. Stolen Credit Cards (PC 484e)

California Penal Code 484e prohibits the transfer, selling or acquisition of a credit card or credit card information without the consent of the actual credit card owner. Stealing credit card is punished either as petty or grand theft depending on the circumstances of the crime.

Where the defendant sells, transfers, or conveys a credit card with the intention to defraud without the consent of the actual card owner, he/she would be guilty of grand theft. If the defendant acquires or retains possession of a credit card or credit card information with the intention to defraud, sell or transfer the card or information to another person other than the cardholder, he/she would be guilty of petty theft.

You can also be charged with grand theft if, within 12 consecutive months, you acquire access to credit cards of four or more different people whose credit cards or credit card information were acquired without the consent of the cardholder.

Acquiring or retaining possession of credit card account information validly issued to another person without his or her consent and with the intent to defraud is charged as grand theft.

Grand theft, in this case, can be charged either as a misdemeanor or as a felony. As a misdemeanor, the defendant can get a jail term of up to one year in county jail and a maximum fine of $1,000. A felony charge attracts a term of up to three years and a fine of up to $10,000

  1. Forging Credit Card Information (PC 484f)

Forging credit card information involves designing, making, altering, or embossing a counterfeit credit card with the intention to defraud or using or attempting to use a counterfeit credit card. Forging credit card information also covers the crime of signing the name of another person or a fictitious character to a credit card without the consent of the cardholder and with the intention to defraud. Faking credit card information is charged as a forgery.

Forgery under California law is a wobbler crime: it can be charged as a misdemeanor or a felony. For a misdemeanor forgery case, the punishment is a jail term not exceeding one year and a term of not more than 3 years for a felony forgery case.

  1. Fraudulent Use of a Credit Card or Account (PC 484g)

PC 484 defines various provisions that constitute the crime of fraudulently using a credit card or an account. Anyone who uses a credit card or account whose details have been altered, obtained or retained without the consent of the cardholder (PC484e or PC 484f), or where the card has expired, is revoked or has not yet been issued, to obtain goods, services or valuable items is guilty of theft. The defendant is guilty of grand theft if the goods obtained through credit card fraud exceed $950 within a period of six consecutive months.

  1. Credit Card Fraud by a Retailer (PC 484h)

With the possibility of paying for goods and services at retail shops using a credit card, a retailer can obtain, retain or transfer credit card information to another person or use it with the intention to defraud. Retailers are guilty of credit card fraud under several circumstances.

When a retailer with the intent to defraud accepts payment for goods, services or valuable items from a credit card which was acquired or retained without the owner’s consent, is counterfeit, expired or revoked, he/she is guilty of theft. In this case, a retailer, even after knowing that the card was acquired without the owner’s consent, is expired or revoked, goes ahead to ensure that the transaction takes place.

The retailer is also guilty of theft if he/she, with the intention to defraud, presents evidence of a credit card transaction without actually furnishing in the money. The retailer can also be charged with grand theft if the value of the goods or services exceeds $950 within six consecutive months. Where the amount is less than $950, the crime is charged as petty theft. Petty theft attracts a jail term of up to six months in county jail and a fine not exceeding $1,000.

Under PC 502.6 (a), a person who willfully and with the intention to defraud uses a scanning device to access, read and obtain information obtained in the magnetic strip of a credit card without the consent of the authorized cardholder is guilty of a misdemeanor. The crime is punishable by a term not exceeding one year in county jail, a fine of $1000 or both. Similar punishment is given to a person who uses a re-encoder willfully and knowingly with the intention to defraud. The re-encoder facilitates the use of the credit card information obtained from the magnetic strip of the card to authorize a transaction without the consent of the authorized cardholder.

Where the defendant is found in possession of such devices, which facilitate the fraudulent access to credit card information, the devices may be destroyed or forfeited in pursuant to PC 502.01.  

  1. Counterfeiting Credit Cards (PC 484i)

Counterfeiting credit cards are the fraudulent creation of credit cards without the consent of the issuer or using someone’s credit card information to process another credit card without their consent and with the intention to defraud. Anyone who is found in possession of an incomplete credit card with the intention to complete it without the consent of the issuer is guilty of a misdemeanor. Where the defendant facilitates, authorizes or engages in making, altering, varying, changing or modifying credit card account information with the intent of billing the transactions on another person other than the actual cardholder, he/she is guilty of forgery. Forgery is punished as either a felony or a misdemeanor.

Possessing an incomplete credit card with the intention to complete it for fraudulent use is a misdemeanor.

PC 484i also includes crimes of designing, making, possessing and trafficking card making equipment or incomplete credit cards with the intention that the equipment and cards be used in making counterfeit credit cards. The crime attracts a felony or misdemeanor charge depending on the circumstances of the crime and previous convictions.

As a felony, the defendant can be imprisoned for 16 months to three years or pay a fine of $10,000.

As a misdemeanor, the defendant is jailed for up to six months, pays a fine of $1,000, or both.

A defendant may receive a community service sentence as punishment for participating in credit card fraud by making or selling counterfeit, modified or altered incomplete credit cards or for trafficking in equipment used in the production of counterfeit credit cards. A previous conviction in credit card fraud may affect the sentence and penalty imposed.

  1. Publishing Credit Card Information

Publishing of credit card information is a misdemeanor under California law. It involves the communication orally, through a computer network or in any form of writing of credit card information of a canceled, revoked, non-existent card, a personal identification number or coding and numbering used in the issuance of credit cards with the intention to defraud, use to evade payment or to aid in defrauding. As a misdemeanor, the crime attracts a jail term of not more than one year in county jail and a fine not exceeding $1,000.

Legal Defense for Credit Card Fraud

Credit card fraud cases are serious offenses with life-changing consequences. Due to the seriousness involved and other related crimes, credit card fraud accusations require the preparation of a solid defense strategy.

In the court proceedings, the defendant needs to prove that their credit card usage was not intended for fraud or they lack awareness in the cancellation or revocation of the credit card. In some cases, the defendant can cite consent to use another person’s credit card.

Under California law (PC 250), intent must be determined to ascertain whether the act was committed intentionally, by mistake or because of ignorance. For example, a roommate may mistakenly carry the wrong credit card and use it to perform a transaction. In such a case, the defendant can cite the lack of intent in committing the crime.

In some cases, insufficient evidence is an acceptable defense. Prosecution requires sufficient evidence to prove that you actually intended to use the credit card for fraud. For example, where a card was revoked, the prosecution should prove that you knew of the revocation. If they cannot prove that, then you may not be guilty of the fraud.

Mistaken identity is another common legal defense for credit fraud cases. Credit card fraud in most cases happens without eyewitnesses, which may lead to false accusations. The defendant may find themselves as victims of these accusations and could cite mistaken identity as their defense.

Where identity theft occurred during the credit card fraud, the victim may find himself or herself having to answer for crimes they have not committed. In such a scenario, the defense attorney should provide evidence such as the report of a missing credit card, or prove that the defendant was in a different geographical location from which the crime happened.

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Punishment and Sentencing

Credit card offenses are charged as theft (petty or grand) and as forgery. The punishment and sentencing follow the nature of the crime, the past criminal record of the defendant, related crimes, and the amount involved in the case of petty and grand theft.

Offenses Related To Credit Card Fraud

Credit card fraud relates closely to the crimes of forgery and theft. In other cases, credit card fraud also includes serious offenses such as identity theft, internet fraud, burglary, elder abuse, conspiracy, unauthorized computer access, and mail theft. Such related offenses may affect the sentence and punishment you receive.

  1. Identity theft

Identity theft law (PC 530.5) prohibits taking of another person’s personal identifying information to use it unlawfully or fraudulently. When the defendant uses another person’s credit card information without the consent or knowledge of the cardholder, they are guilty of identity theft which can be charged as either a felony or as a misdemeanor. In some cases, identity theft involves taking over the account of the victim and using it as your own. In such cases, the person takes over the account, performing unauthorized transactions at the expense of the actual cardholder. Account takeovers can involve the person assuming control of other personal accounts and communication channels through which the cardholder can be notified of illegal or unusual activity on their credit cards.

  1. Internet fraud

Internet fraud related to credit card fraud involves committing credit card violation using the internet. It can happen when you purchase goods or services online using someone else’s credit card without their permission or using the internet to advertise services or goods related to credit card fraud such as incomplete cards or equipment. Vendors who sell goods bought using a stolen or counterfeit credit card are also guilty of internet fraud. Internet fraud is a federal offense, therefore, it may attract higher penalties and lengthy sentences.

  1. Burglary

Burglary (PC 459) involves entering a building or premises with the intention of committing a crime when inside. Therefore, when you enter such an area with the intention of committing a credit card fraud, you commit burglary as well. Burglary is wobbler (can be charged as a misdemeanor or a felony).

  1. Elder abuse

When you use the credit card or information of an elderly person (65 years or older) without their authorization with the intent of committing fraud, you violate their right to be free from financial abuse. Elder abuse is charged as a wobbler.

  1. Conspiracy

Conspiracy (PC 182) involves an agreement with a person(s) to engage in credit card fraud. Such an agreement can be with a retailer, a person trafficking in card making equipment, people stealing credit card information, and any other parties involved in credit card fraud. Conspiracy under California law is a wobbler which can attract a sentence of between 16 months and three years and a fine of not more than $10,000 for a felony, and a term of not more than one year in county jail and a fine of up to $1000 for a misdemeanor.

  1. Unauthorized computer access

Unauthorized computer access (PC 502c) involves knowingly accessing a computer or computer system without permission to do so. The crime overlaps with identity theft, especially where the defendant steals personal information including credit card details. Unauthorized computer access can be charged as a misdemeanor or felony depending on the impact of the crime.

  1. Mail theft

Mail theft is a misdemeanor under California law (PC 530.5e). It involved the theft of mail from a post office, mailbox or mail courier with the intention to use personal information therein fraudulently.

The Statute of Limitations

The statute of limitation indicates the maximum time within which a claim can be filed against the defendant. The statute protects individuals from being charged for a crime long after the evidence or witnesses who could exonerate him are no longer available. In California, the statute of limitations for credit card fraud is seven years.

How Is Credit Card Fraud Investigated?

Credit card fraud can be a hard crime to tackle especially since its prosecution relies on account users reporting the crime. With the growth of the internet, most fraud crimes pass unnoticed. However, in most cases, the cardholders may report a lost credit card or suspicious credit card activity. When a card is reported as lost or stolen, the account is frozen temporarily. When the card is used, the transaction can be traced and the suspect apprehended.

Professional investigators have advanced tracking equipment that they use to trace the activity of a credit card. The information they acquire can lead them to the suspect, prompting his or her arrest. The Federal Trade Commission investigates credit card fraud cases where amounts exceed $2,000, but leave most of the investigations to state and local authorities. The US Secret Service also provides additional legal support for credit card fraud investigations to local and state governments.

Why You Need Legal Assistance

Whether you committed credit card fraud or not, facing charges for the crime could have serious implications on your life. Once you are convicted, the records or your crime and sentence become public records, which can be accessed by landlords, employers, and companies conducting background checks such as banks. This means a conviction could affect where you can live, your creditworthiness, and reputation. Legal assistance is necessary to help you either minimize or find a favorable sentence or prove your innocence.

While you may feel confident enough to represent yourself, the help of an experienced attorney will provide you with a better angle at proving your innocence or getting a fairer and lesser penalty. A criminal defense lawyer understands the court system and has the experience gathered from working in similar cases. Such knowledge and understanding allow them to see your case from different angles and help you approach the defense in a strategic way.

In addition, they are aware of evidence collecting laws and procedures in California and will, therefore, follow them in gathering the most relevant and important facts of the case. They will also present the relevant evidence during the evidentiary hearings, ensuring that they do not leave out any crucial evidence.

A criminal defense attorney will also help in addressing issues of alternative sentencing such as community service sentencing depending on the circumstances of the crime.

Where you do not have the financial capability to hire a legal representative, the court, under the Sixth Amendment to the US constitution, is supposed to appoint one for you at no charge to you. However, if you can hire one yourself, it is best to take time to select the best in the industry. It will give you the advantage of having private counsel at your disposal.

The legal representative should have a good reputation with past clients, experience in handling credit card fraud, and have an efficient customer service system.

If you are being charged with a crime feel free to contact our Los Angeles Criminal Lawyer for a free consultation.