How Do Thieves Use Stolen Credit Cards?

Written by J. Hirby and Fact Checked by The Law Dictionary Staff  

These days most consumers are worried about the security of their financial information. From hackers breaking into the accounts of thousands of cardholders to the theft of a single person's identity, it seems like threats to financial data come from all angles. Accordingly, it's no surprise that the average consumer wonders just what a thief can do with their stolen credit card information. As it turns out, thieves have plenty of options when it comes to using someone else's credit card.

Shopping Sprees

The most common way that thieves use stolen credit cards is simply by shopping with them. Shopping in retail stores is actually very easy for the thief with a stolen credit card in hand. As long as they can minimally make their signature look like the one on the back of the card, they are home free until the cardholder discovers that their card is missing. Once that card is reported lost or stolen, the thief can't use it anymore and he'll probably just dump it.

Online Shopping

The rise of Internet shopping has made it easier than ever for thieves to purchase goods with a stolen credit card. Thieves don't even need the actual card, they just need the information it contains. Frequently, the card information is stolen using a skimming device. A consumer swipes their card at an ATM or gas pump to which the thief has fixed the skimmer. The credit card data is immediately sent to the thief when the card is swiped. Sometimes retail store clerks or restaurant employees steal credit card information before using it themselves or selling the data to a partner. Other credit card thieves simply lift card information from online shopping websites, then use it for their own gain.

In the online shopping scenario, the legitimate cardholder usually isn't even aware that their information has been stolen. This may make it easier for the thief to use the card multiple times, racking up charges long before the consumer gets a statement in the mail and realizes that something is wrong.

Protect Yourself

Recognizing that the theft of credit card information is rampant, most banks offer consumers some form of protection. This may include transaction notifications that come to your smart phone by text or email. Essentially, your approval is required before a transaction goes through, meaning you have the power to stop a fraudulent transaction before it's approved.

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