Credit card application fraud is a type of identity theft that involves opening a credit card account in another person's name. By opening an account using stolen information, an individual can cause numerous problems for the victim, including debt, negative credit ratings, and even bankruptcy. In the United States, identity theft is a federal offense. Several government agencies and consumer protection organizations have developed strategies to help victims, and potential victims, deal with fraud on credit card applications.
A common method of applying for an account in another individual’s name involves filling out credit card application forms with counterfeit documents, or by using stolen information about another person. Typically, the applicant either pretends to be someone else, or he or she uses his or her real name and false contact information. The applicant might use stolen documents or have copies of the victim’s personal information, such as utility bills or other financial statements. For U.S. citizens, a key piece of information usually is the victim’s social security number. At first, the injured parties may not even realize what has happened, because they do not receive billing statements. Rather, the correspondence is usually mailed to the address specified on the original application.
Credit card application fraud can have many negative consequences for its victims. Once a fake application is approved, someone can accumulate potentially limitless charges using another person’s identity. These fraudulent charges can lead to huge credit card debt and negative credit reports. In some cases, victims have had to consider filing for bankruptcy because of the damage done by credit card fraud.
Anyone can be a potential victim of credit card application fraud. People who do not protect their personal information may be the most likely targets for this type of identity theft. Often, elderly people are the victims of fraud and scams. Possible reasons include their potential likelihood to be more trusting of someone asking for personal information. They also might be more willing to respond to unsolicited phone calls and email messages.
While it may not be possible to prevent credit card application fraud altogether, there are steps that people can take to decrease their likelihood of being victims. In the U.S., government agencies, such as the Federal Bureau of Investigation (FBI) and the Department of Justice, along with consumer protection offices, like the Better Business Bureau (BBB), are good sources of advice for protecting oneself from fraudulent credit card practices. For example, they often suggest obtaining a copy of one’s credit report to check for any suspicious activity. Another recommendation is to guard one’s financial documents carefully, and to avoid giving out personal information unless it is deemed absolutely necessary.