Types of Fraud
Credit Card Fraud and Identity Theft are related, but they are not the same thing.
Credit Card Fraud
Credit card fraud is the unauthorized, illegal use of your credit card to obtain goods without paying for them or obtain funds from your account by a cash withdrawal.
Credit card fraud can occur when someone’s physical credit card is lost or stolen by another party who uses it. But it is driven primarily by compromise of credit card account data during their normal course of usage. Such compromises can range from theft of data by skimming (copying) the information contained on a small number of credit cards’ magnetic strips to large scale data breaches where millions of credit card accounts are compromised through exploitation of a data security weakness at an online or physical store or chain. Stolen credit card data is then often used to attempt fraudulent online purchases or to create counterfeit credit cards to attempt fraudulent in-store purchases.
Identity theft occurs when someone uses your name and personal information to assume your identity either to open new credit accounts, bank accounts, mobile phone accounts, and more in your name or to assume ownership of existing accounts you may legitimately hold. Thieves often trick people into purchasing gift cards and ask that you provide the gift card details to them.
What to watch out for:
While identity theft may begin with the loss or theft of a wallet or purse, there are a number of other ways that identity thieves can obtain your personal information:
Phishing occurs when someone tricks you into divulging personal, financial or account information. Posing as well-known companies, thieves will send out e-mails asking you to reply, or direct you to a fraudulent web page that asks you to provide personal information, such as your credit card number, Social Security number, or account password.
Phone Phishing (also called “Vishing”) is another way thieves try to collect sensitive information from you. In this type of fraud, they will either contact you by telephone or send you a fake e-mail and ask for you to respond by telephone.
Thieves may acquire records containing your personal information and/or account information from intercepted or discarded financial statements, payroll stubs, or other records sent to you or from third parties with whom you interact in your normal course of business where such information is disclosed.
Real Estate/Title Fraud
Title fraud is also known as house stealing, property fraud, or deed fraud. It occurs when a thief obtains the title to your property through a fraudulent transfer document, changing the name(s) on your title to them, effectively stealing your home. Unfortunately it can be very simple and it is almost always tied into an event of identity theft. The fraud artist will target your house, forge the transfer deed, and then register the title to the property in their name. Next, they forge a discharge of the existing mortgage and then borrow against the clear title. Of course the fraudster does not make any payments and when the lender serves notice that it intends to foreclose, the scheme is at that point brought to the attention of the real owner.