Credit card companies pursue consumers aggressively for delinquent or unmade payments. However, sometimes, consumers cheat businesses and one another, which seems to be happening more and more lately. Statistics reveal that “friendly fraud” increased by between 20 and 3% percent in 2022.
Customers sometimes falsely dispute charges on their credit cards and forget the purchase, loan the card to a friend or intentionally dispute after the fact. One financial consulting firm notes that restaurant chargebacks now account for 1% of all transactions. The culprits typically fall within a small group. Merchants currently succeed in only about 4 of 10 chargeback disputes.
Federal charges against Washington, D.C., woman
On December 9, in a Virginia court, a jury convicted a woman who had run a scheme for many years; the scheme was expansive and serious. Between 2013 and 2016, a woman used stolen credit card information to buy gift cards, luxury items and other expensive things. Along with multiple co-conspirators, the woman stole the identities of Washington, D.C., area residents, costing retailers and financial institutions thousands of dollars.
Her conviction on several charges of conspiracy to commit bank fraud, aggravated identity theft, unlawful possession of 15 or more access devices and possession of access-device making equipment with intent to defraud began when she obtained stolen credit card information from the Internet. Her partner would manufacture the cards that the woman distributed to other partners to use at stores.
Co-conspirators plead guilty
The woman would return some of the items purchased on the victims’ cards for refunds to either her personal account or a coffee shop she owned with a co-conspirator that received more than one-third of its income with redemptions of American Express gift cards. Two co-conspirators pleaded guilty to conspiracy and are waiting to be sentenced. The woman faces a prison term of from two to 196 years when sentenced on March 15, 2023.
Credit card fraud requires the prosecution to prove a person performed specific elements with intent. The gap between challenging a transaction and federal bank fraud spans wide. Attorneys who understand the difference can offer guidance.