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What You Need to Know About Understanding and Preventing Social Security Fraud

What You Need to Know About Understanding and Preventing Social Security FraudWhat is Social Security Fraud?

Social Security Fraud is defined as a nature of fraud that involves – or includes – the unlawful and illegal utilization of social security numbers or social security benefits; which may include the misrepresentation of assets, fraudulent collection of social security benefits, or the theft – and misuse – of a social security number:

What are Social Security Numbers?

An individual’s social security number, may serve as both a form of identification, as well as means of individual classification and identification undertaken by the United States Government, which illustrates individual employment and tax history.

What are Social Security Benefits?

Social Security Benefits are defined as monetary compensation that is granted to individuals as a result of disability, retirement, or the classification as an elderly member of society. Within each paycheck received by an individual employed within the United States, a certain amount of wages earned are withheld by the Department of Social Security of the United States.

Types of Social Security Fraud

Within the scope of Social Security Fraud, there exist a variety of methods in which fraudulent activity may take place; typically, the realm of Social Security Fraud is considered to include both the collection of social security benefits, as well as the unlawful or illicit use of social security numbers:

Identity Theft and Social Security Fraud

Social Security numbers are given to citizens of the United States who are both employed, as well as seeking employment within the United States. Social Security Fraud occur in the event that an individual or individual engages in the misuse of social security numbers; in many cases, this may exist as a prelude to identity theft or the misappropriation of benefits or monies – this may involve:

The distribution of social security numbers obtained in illegal and unlawful manners; this is considered to proliferate administrative-based fraud

The misuse of a social security number in order to misrepresent oneself; this may involve fraudulent employment or tax evasion

Administrative and Social Security Fraud

Within the scope of Social Security Fraud, a primary fraudulent activity will involve the misappropriation of social security benefits; these funds are apportioned for the presumed later use of the individual upon retirement – social security benefits may be available for both that individual, as well as to the dependents or relatives of the claimant. Social Security Fraud may take place in any of the following settings:

An individual who is ineligible to collect the social security benefits belonging to another individual engages in their collection; this may involve the awareness of the eligible recipient – furthermore, children are prohibited from collection social security benefits from individuals not named as their respective guardians

The collection of the social security benefits awarded to a deceased individual is considered to be social security fraud; any nature of monetary compensation mistakenly awarded to deceased individuals must be returned

The misrepresentation within an assets list or social security application is considered to be a form of social security fraud that takes place with regard to the application process for the prospective receipt of social security benefits

What Are Fraudulent Applications

What Are Fraudulent Applications

One form of credit card fraud that often crops up involves fraudulent applications for credit cards. In this kind of fraud, the perpetrator attempts to apply for a credit account in another person's name. Most often, this will require the perpetrator to use false or stolen documents and information. One of the easiest ways in which to accomplish this form of fraud is to dumpster dive for any of the numerous offers individuals are often sent by credit card companies to open a new account.
 
 
These mailed offers for new credit cards are sometimes discarded without appropriate disposal by the receiving party, and thieves can then find these offers in the trash and simply fill them out in the receiving party's name, but with a different address. That way, the thieves can easily gain access to a new credit card attached to another person. Other types of documents important to this kind of fraud include utility bills, bank statements, and other official forms that might include necessary information on them. Fishing these documents out of the trash will easily allow the fraudsters to submit a fraudulent credit card application and wreak financial havoc on their victims.
 
 
It is important that if you are the victim of such a case, you report credit card fraud as soon as possible to the Federal Trade Commission and to the credit companies involved. Shutting down a falsely opened account as soon as possible is vital to minimizing the damage that can be caused by such fraud.
 
 
The unfortunate problem is that catching false applications can be difficult, especially when the statements are not coming to the victim, but are going directly to the thieves. The first time that you may find out you have been the victim of such fraud is when you are denied a loan because of a poor credit card, or when you are arrested or charged as a result of the charges on the fraudulent card.
 
 
The best possible way to combat fraudulent applications, then, is not to simply report credit card fraud when it happens, but is instead to prevent it beforehand through proper disposal of the documents which could lead to such fraud if they ever found their way into improper hands. Shredding important documents before throwing them out is critical to avoiding these fraudulent credit card applications; even those offers sent by credit card companies which seem to be mere junk mail of sorts need to be shredded, such that they cannot possibly be used against you.
 
 
One should also take preventive measures against access of personal information online, as Internet phishing can provide the same information as a discarded utility bill to those who would commit fraud. 
 
 
In the end, this type of fraud is perhaps the most damaging of all, as it is difficult to detect, and very difficult to prove as fraud. Even once you have discovered and taken the necessary measures to report credit card fraud of this nature, a court may not have the necessary evidence to rule that you have not opened the account yourself.
 
 
Such evidence is very difficult to provide, even if the bills have come to a different address, and you do not show evidence of having the products purchased on the card; it would be too easy to hide such purchases and change the address for the card simply so that eventually, one could claim that it was a fraudulent card and thereby avoid having to pay for any products purchased with it. Again, the best possible way to avoid such damaging fraud, then, is to take precautions to protect yourself from leaving any information for fraudsters to find.

Understanding Penalties Associated With Credit Card Fraud

Understanding Penalties Associated With Credit Card Fraud

Credit card fraud is a very damaging form of fraud, affecting the consumer victims, the selling merchants, and the credit card companies themselves. The crime costs companies tremendous sums of money every year.
 
 
Credit card fraud penalties, then, are an attempt to deal with the overall problem of credit card fraud by making it too costly, not worthwhile to pursue. The problem, however, lies in the fact that credit card fraud penalties are not often actually used, as the fraudsters committing the crime are rarely caught. The FBI does not investigate credit card fraud for sums smaller than $150,000, and the Federal Trading Commission only investigates fraud in excess of $2000.
 
 
As a result, it is easy for fraudsters to avoid any credit card fraud punishment by simply limiting their spending to smaller purchases, and avoiding the higher monetary sums that would attract the attention of these legal organizations.
 
 
But even if a fraudster were caught for credit card fraud, and faced credit card fraud penalties, those penalties are variable, depending upon what state the criminal is in. Credit card fraud punishment is often primarily determined by state law, and the penalties can vary from 15 days in prison to 20 years in prison, obviously also depending on the exact nature of the crime committed and how damaging it may have been.
 
 
Fines can also be levied against the fraudster. But these forms of credit card fraud punishment often do not find their marks, and even when they do, they feel insignificant compared to the damage done by a fraudster. Even 10 years in jail and a $10,000 fine as credit card fraud punishment does not seem to match up with a crime which could have cost hundreds of thousands of dollars, and which could also have significantly damaged an individual's credit rating for years to come, preventing that person from achieving full recovery for quite some time.
 
 
Under US Code, Title 18, Part I, Chapter 47, Section 1029, the general credit card fraud penalties include fines and imprisonment periods, with 20 years being the absolute maximum, only applicable for heinous second offense. It is unlikely that in most cases the full penalty is enforced, however, not least because in most cases, offenders will not be caught. Credit card fraud punishment is especially difficult to enact when the fraud occurs over state borders, and often law enforcement will not attempt to pursue such crime, simply because of the difficulty involved, if the credit card fraud was for small enough monetary values.
 
 
Of course, credit card fraud penalties will often stack with penalties for other charges. For example, identity theft and credit card fraud often go hand in hand, and credit card fraud involving use of the Internet might also involve computer fraud. This would not affect the chances of actually discovering perpetrators, but it would at least add on to the probability that perpetrators would suffer from more appropriately restrictive penalties.

Understanding Compromised Accounts

Understanding Compromised Accounts

If someone can obtain your credit card information in a permanent fashion, then he or she can compromise your credit card accounts. This is most often performed by holding the necessary information in order to satisfy Card Not Present transaction requirements. Card Not Present transactions are those transactions for which the credit card need not be physically present; only the card's information is of significance.
 
 
This type of transaction most often occurs online. Having the information necessary to satisfy CNP transactions' requirements, then, will allow the perpetrator to commit online credit card fraud, in which he or she can make purchases online with your credit card, almost as if he or she had stolen it.
 
 
Stolen credit cards would give some of the same information necessary to perpetrate online credit card fraud, including the name of the card holder, which is normally printed on the credit card; the account number, also printed on the card; the expiration date; and the verification CVV code on the back.
 
 
The primary element that might be missing would simply be knowledge of the credit card's official billing address, which many CNP transactions use as another form of verification. Thus, having a stolen credit card would not inherently allow for online credit card fraud, as much as tapping into the information through the Internet might.
 
 
Online credit card fraud is normally, then, is aptly enough restricted to purely Internet based exchanges, with physical sources of credit card fraud being of very little use. The information is obtained online, and is then used online to make purchases. The perpetrator never has any physical form of card which he or she could use to make purchases at real stores, but he or she also has all the knowledge he or she needs to make purchases fraudulently online.
 
 
Online credit card fraud might once have been something of a restricted problem, but now, it completely compromises the account in question. With the prevalence of Internet transactions, and the number of opportunities available for Internet purchases, someone who gains access to the credit card information necessary to perform online transactions would easily be able to make any number of fraudulent purchases with the stolen account.
 
 
Online credit card fraud can be much more involved, however, and can be attached to genuinely stolen credit cards, as well. In this event, it normally involves more observation of the intended victim, and is more of a planned crime. The result is that the account can be compromised perfectly, with a combination of physical purchases and online credit card fraud quickly and easily leading to large numbers of purchases. This is likely the worst kind of credit card fraud that can occur, as the planned nature of such fraud inherently makes it more dangerous and volatile for the victim.
 
 
Compromised accounts crop up more and more often, now, with the advent of the Internet. Online credit card fraud is fast becoming one of the greatest growing types of crime in the country, as it becomes easier and easier for perpetrators to find and access the information necessary to utterly compromise a credit account. New security measures are being consistently rolled out, but as the Internet grows in prominence, it becomes harder and harder to prevent the remote compromise of credit accounts via online credit card fraud.

Famous Cases Credit Card Fraud Overview

Famous Cases Credit Card Fraud Overview

Famous credit card fraud cases are not necessarily as common as you might think, because all too often, the fraudsters in credit card fraud cases get away with the crime. They are never successfully caught, because it is too hard to trace the fraud back to the perpetrator with only single instances of crime, and with smaller amounts of money, it is even difficult to get the attention of law enforcement agencies so that they will launch fraud investigations. Nonetheless, however, there are a few famous fraud cases in which the perpetrator was caught, with Alberto Gonzalez's case being the most famous of all.
 
 
Albert Gonzalez and the credit card fraud he perpetrated is one of the most famous fraud cases in recent times, not least because it was a case for so much money. Albert Gonzalez was a capable computer hacker who had previously been involved in credit card fraud cases, though nothing akin to what made him most infamous. Gonzalez and the group of hackers he led successfully hacked TJX Companies, stealing 45.6 million credit and debit card numbers over 18 months. He and his team went around from store to store, using wireless networks to steal credit card information from a number of different stores, including T.J. Maxx, Barnes & Noble, and Sports Authority. 
 
 
Fraud investigations eventually led law enforcement to investigate Gonzalez, eventually resulting in his arrest at Miami Beach, Florida. In raids connected to his arrest, law enforcement took $1.6 million in cash, Gonzalez's laptop, and a Glock pistol. Gonzalez was charged for even more fraud cases than originally anticipated, with charges including hacking into Heartland Payment Systems, Citibank's 7-Eleven ATM's and Hannaford Brothers computers.
 
 
From Heartland Payment Systems, Gonzalez and his crew had stolen 130 million credit card numbers. After a long process of indictment and trial, Gonzalez ended up with a plea bargain for his fraud cases, under which he would serve 15 to 25 years and would return a large amount of his ill-gotten property and more than $1.65 million to the government. 
 
Gonzalez's fraud cases are notable because they were many and varied. He was reported as having stolen huge quantities of credit card numbers in multiple incidents, with different crews, as he was charged separately by different states for his misdeeds. The fact that fraud investigations successfully caught him was a major coup, as Gonzalez was undoubtedly the source for any number of fraudulent credit card based transactions.
 
 
Another recent incident exemplifying credit card fraud cases involved Julio Lopez and Anett Villar, two members of a southern Florida gang that purchased stolen credit card numbers through the Internet and used them to cause over $75 in damages. The credit card numbers were paid for through the E-Gold online payment system, giving fraud investigations a way to track the perpetrators.
 
 
After purchasing the numbers, Lopez and his gang then made physical cards using the stolen numbers. He then proceeded to sell those physical cards, which were fully functioning credit cards with all the necessary security features. The Secret Service arrested Lopez, Villar, and four others, charging them with numerous fraud cases.

What Are Card Not Present Transactions

What Are Card Not Present Transactions

Card Not Present transactions are those in which the credit card need not be physically present for the transaction to occur. They were actually in existence for quite some time before the advent of the Internet, as mail-order purchases would inherently be Card Not Present transactions, requiring credit card information without having the actual credit card.
 
 
Telephone purchases would also qualify as Card Not Present purchases, seeing as the information of the card need only be shared over the phone to make the purchase, and the actual card need not be physically present. But the majority of modern-day Card Not Present transactions occur on the Internet. The unfortunate aspect of Card Not Present transactions is that they are all too easy to take advantage of with Card Not Present fraud.
 
 
The primary problem of Card Not Present transactions is that there is no way to verify if the purchaser, giving out the information, is the actual owner of the card. Since the transaction does not require the physical card, and over the Internet would require nothing more than correctly filling out the blanks in the order form, there is no real way to check the actual identity of the purchaser. Any verification questions could have their answers stolen right along with the credit card information.
 
 
One recent form of defense against Card Not Present fraud involves the use of specified, pre-accepted delivery locations. If for any given credit account, the owner sets up a number of acceptable shipping locations that are linked to that account, then ordering from any given website would only send to one of these pre-approved locations.
 
 
Thus, while a form of Card Not Present fraud would persist, if only because purchases could still be made against the card holder's will, those purchases could only be sent to locations which are likely safe from the card holder's point of view. A Card Not Present fraud perpetrator, in this instance, would likely be unable to do more than order items to the card holder's home.
 
 
Unfortunately, in general, Card Not Present transactions are likely to be too small to be considered worth investigating. Obviously, some transactions will require a bit of an examination because they will be transactions for great enough values of money, but the vast majority of Card Not Present transactions on the Internet will likely be too small to fall on the radar of investigators. This is a fact that fraudsters have taken advantage of time and time again, as the lax security features on smaller transactions allow them to penetrate these transactions and obtain what they need for Card Not Present fraud.
 
 
Customers aren't the only ones at risk, either. Sellers themselves must pay a higher price to use Card Not Present service, as Card Not Present transactions are inherently more risky than standard transactions. Coupled with these higher costs comes the threat of lost business with cases of Card Not Present fraud.
 
 
Such fraud would hurt the merchant as much as the victim of the fraud, as the merchant would be giving out his goods to the perpetrator, and then the sale would later be cancelled, leaving the seller with nothing to compensate for the lost goods. As a whole, then, Card Not Present transactions are those transactions around which both buyers and sellers must tread most carefully.

What You Didn’t Know About Carding

What You Didn't Know About Carding

The world of credit card fraud is more complex than it might at first appear. There is a whole market unto itself, dealing in stolen credit card information. Carding is one of the more important functions of this demi-market, as it is essentially a version of "quality control." Carding is the practice used by those who steal credit card numbers of making a small transaction of utterly unimportant nature in order to determine if the card is still active. The only point of carding is to determine if the card is still sellable onto the credit card fraud market. 
 
 
Carding requires the use of so-called cardable websites, which offer up opportunities for carding. This means that the website has some form of small-amount transaction available, which carders can use in order to quickly determine whether or not the card in question is still active. Such websites are often charity websites which will allow donations of any amount.
 
 
The point of carding at such low levels is so as to not attract any attention, while also avoiding the card's credit limit. For example, a small donation of one dollar to a charitable, cardable website would serve the purpose of carding perfectly well, while also likely going unnoticed by the card holder and the credit card company.
 
 
Previously, carding would refer to a practice of using generators which would come up with entirely random sets of credit card numbers. The carding individuals would then test these numbers to see which ones were actually connected to valid accounts; essentially, this version of carding amounted to a "guess and check" system for perpetrating credit card fraud.
 
 
Due to increasing security measures, however, this type of carding has been essentially eliminated, as the amount of information necessary for performing transactions is substantially greater than that provided by these random number generators. Nowadays, you need billing address and the CSV Card Security Code, along with the card's expiration date, all of which would be information that this version of carding would not provide. Thus, carding's primary role nowadays is as verification of active status on the card information.
 
 
Once a card has had its active status confirmed by carding, the information is collectively referred to as a phish. The carding individual will generally sell the phish to others; he will not carry out the credit card fraud himself, although he can still be held accountable on charges of credit card fraud for having provided others with the ill-gotten information they needed to perpetrate credit card fraud.
 
 
One of the primary problems of this relationship, however, is that the carding individual becomes a bit harder to trace, as he is now no longer the one performing the direct credit card fraud. As such, even if the credit card fraud were to be detected, the carding person might remain hidden from any investigation, thereby allowing him to do the same thing at a later date. Many times, the individual who performs the carding of a set of card information is also the individual who obtained the information, be it through skimming or phishing. 

Be Aware of Credit Card Fraud

Be Aware of Credit Card Fraud

Credit card fraud has its origins right alongside credit
cards. As long as there have been credit cards available popularly, there has been
the desire to misuse them for unfair monetary gain. Credit card fraud refers to
all such misuse, by which a credit card is used to fraudulently provide money
for a transaction. Sometimes, this takes the simple version of using a credit
card to pay for something which one cannot truly afford, thereby ensuring that
the items in question were essentially stolen, as it is unlikely that payment
will ever be made for those items. But it can take other forms, as well. Credit
card fraud can be directly linked to identity theft, in situations where stolen
credit cards are used to provide money. This is actually the most common form
of credit card fraud, and the form against which most credit card fraud
protection is oriented.

 

Because of the advent of the Internet and online
shopping, credit card fraud would seem to be more easily perpetrated than ever
before. The primary, easiest method of committing credit card fraud is simply
by stealing someone’s credit card, and using it for illegal purchases. There
are other methods, including using ill-gotten information, such as in an
instance where a sales clerk might save sales receipts with credit card numbers
on them, that he might later take advantage of the information; these are
genuinely slightly more complex, and require the perpetrator to begin in a
position of power. But now, as one enters credit card information into
computers and websites regularly, in order to make purchases online, that
information can be accessed from afar, by hackers and others who would simply
tap into your information through the Internet.

 

Yet, the Federal Trade Commission has reported that
credit card fraud has actually decreased in its percentage of all identity
theft crimes for the sixth year running. This could partly be due to the
overall increase of identity theft crimes, but it could also be due to
successful use of credit card fraud protection systems. Some credit card fraud
protection schemes are simple systems on the cards to help increase the
encryption and thereby prevent credit card fraud; the small security code on
the backs of most modern credit and debit cards falls into this domain. Credit
card fraud protection also includes monitoring of your credit accounts by the
credit card companies; if they see an unusual, sudden increase in activity,
then they can get in touch with the card’s owner to verify the transactions,
and ensure that there is no credit card fraud going on.

 

Though these credit card fraud protection measures would
not prevent credit card fraud, there are also an increasing number of
protective systems that will prevent credit card fraud from affecting the
victim. In the United States, for instance, card holders can only be held
liable for $50 of fraudulent charges made on a lost credit card, at most, and
credit card companies are often willing to waive even this, in return for a
signed confirmation from the card holder that the charges are, indeed,
fraudulent. If the number is stolen, but the card is not lost, then victims are
liable for $0 of the fraudulent charges. These credit card fraud protection
measures do help to prevent the overall damage caused by credit card fraud, as
too often the ones who pay most from such fraud are the individual card holding
victims, and not the companies. Furthermore, credit card companies’ ability to
simply eliminate charges from the card helps to add a back-up layer of credit
card fraud protection.

 

The battle between those who would commit credit card
fraud and those who would seek its prevention will likely continue on, however,
as any protection system that could ensure absolute protection would also
likely be unreasonably restrictive.

Skimming Explained

Skimming Explained

Skimming is a type of credit card fraud which is growing in prominence, and which endangers the very basic trust between consumer and seller. In skimming, an employee of a legitimate merchant uses his position to gain access to the credit or debit card information of a buyer, so that at a later point the employee can use that information to his advantage.
The transaction which gave the buyer’s information to the company was perfectly normal, and is not the source of the problem; skimming instead comes from the unethical behavior of single employees in an otherwise trustworthy business. A single waiter at a restaurant, for instance, might run a customer’s credit card through a so-called “skimmer” so as to store its information before he returns the card to the customer. He can even simply write down the CSV code which is not stored in the information on the magnetic strip, and thereby have all possible information that he would need in order to conduct fraud based on his skimming.
Other forms of skimming often involve bank employees themselves, setting up special detection systems on ATMs so that, as customers come to perform transactions at the machine, their cards are read and stored on a skimmer, or their PINs are monitored and recorded for later retrieval.
A credit card fraud investigation for a single cardholder would not encounter great success in detecting skimming as anything other than a likely explanation for the source of the credit card fraud when no other source of fraud presents itself. Finding the individual responsible for the skimming based on a single instance of such fraud would be very difficult. But a credit card fraud investigation could encounter much greater success in detecting fraud when multiple cases seem to surround the same business.
Such a technique would involve data mining, which would look at a set of gathered data from a group of individuals who have all complained of suffering from credit card fraud, and would then draw connections between them. This could lead a credit card fraud investigation to one particular business which all the victims use.
Should a specific business be found to have an employee practicing skimming on customers, then obviously that employee will be charged to the fullest extent of the law, but the business will likely be fined, as well. Business owners are held responsible for ensuring the security of their terminal-based transactions, and if they cannot do so successfully, then they will suffer a penalty of some kind, including the potential for complete detachment from the electronic transaction system.
Skimming is a problem which is nigh impossible to prevent from the customers’ perspective. You cannot control the actions of the employees at a place where you give your card as payment; you can only choose not to give that business your patronage in the future. The same basic rules for dealing with any credit card fraud still apply to dealing with skimming, of course.
As soon as you discover evidence of fraudulent behavior affecting your credit accounts, you should report it as quickly as possible. With any luck, yours may be the evidence necessary to help bring a credit card fraud investigation to success in finding the skimming culprit. 

What To Do If Your Credit Card Stolen

What To Do If Your Credit Card Stolen

One of the simplest and most common forms of credit card fraud involves the misuse of a stolen credit card. A stolen credit card is still perfectly active until a credit card company is informed that the card has been stolen. Nowadays, most credit card companies have a free telephone service that is always available for reporting lost or stolen credit cards.
But if a card holder does not realize that his card is lost or stolen, then he might not report it for some time, allowing the thief to then make any number of purchases using the card. Indeed, the other forms of security that might help to prevent a stolen credit card from being used are often ineffective for one reason or another. Signature panels on the backs of cards do not work, as signatures can be forged, and picture ID will most often not be requested by sellers; even if picture ID is requested, it will likely not out a stolen credit card, as it is perfectly within a supposed card holder’s right to refuse to give such picture ID.
The best way to minimize the damage of a stolen credit card is by quickly reporting the stolen credit card with the credit company. Doing so quickly is essential to avoid later reporting credit card fraud based on the fraudulent charges incurred between whenever you lost the card and whenever you reported it. The number should be easily found online, but it can also be found on your billing statements.
Once you’ve reported the stolen credit card, then you have to deal with any fraudulent charges that might have been incurred through the card. Reporting credit card fraud should also be done as quickly as possible, so as to avoid any further danger to your credit score and finances. The Fair Credit Billing Act ensures that you will only be held liable for a maximum of $50 on your card for the fraudulent purchases, but the credit card company still has to remove the charges from the card; reporting credit card fraud early will give them more warning, and help to speed up the overall process involved.
Considering that a lost or stolen credit card is likely one of the most commonplace sources of credit card fraud in the country, it is one of the sources that has been best defended against. The bottom line of dealing with a stolen credit card is that reporting it quickly will minimize any possible damage you might suffer, and after the fact, while it would not be the easiest thing in the world to deal with the fraudulent charges, the law would be on your side. Reporting credit card fraud would inherently protect you in any number of ways from the negative side effects of credit card fraud, and as a result, it is likely that the entire incident might not amount to terribly much damage, assuming that you act fast.
If instead of having a single stolen credit card, your entire wallet is stolen, however, that is a different story. You’ll have to cancel every stolen credit card that was in the wallet, and be prepared for reporting credit card fraud on every card. You will also likely want to take measures concerning the other documentation and identification you might have had in your wallet, as that could easily lead to instances of identity theft. But on the whole, though a stolen credit card is the most likely lead-in to credit card fraud, it is also one of the easiest to deal with.