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Credit Card Fraud and Theft in Texas: Lots of Credit Cards Here in DFW

Credit Card and Debit Card Fraud in Texas: What’s Involved Here

Fraud is a crime under the Texas Penal Code, and it can mean many different things. Basically, “fraud” is considered a criminal act because people (victims, marks) get hurt by it. Fraud will get you arrested in Texas, and it happens when you take someone’s money or property by some kind of manipulation or sneakiness.

Con artists, grifters, hackers, swindlers, scammers: they are all vulnerable to being arrested on fraud charges in Texas if they are caught. Think of some of the “caper” movies or TV shows — those are some great examples of fraud in action.

 

CREDITCARDFRAUD

 

Credit Card Fraud in Dallas, Fort Worth, and North Texas

Which brings us to credit card fraud, a particularly popular form of fraud here in the Dallas – Fort Worth area. Why? Opportunity.

There’s lots of credit cards being used here in our part of the country. In fact, a recent report has the Dallas-Fort Worth metroplex having more credit cards, and more credit card debt, than most of the United States. Moreover in Texas, DFW was number two (San Antonio was first) in the state for credit card debt, with DFW having an average of $4900 in debt over 2.2 credit cards.

So, looks like North Texas is a prime location for those people interested in credit card fraud as a means of making a profit. This is a growing illegal business enterprise here, it’s bigger than you may realize.

How is this happening? Credit card information can be obtained in many ways.

1. Skimmers.

Sophisticated criminals use things like skimmers. These can be used at ATMs, stuck onto or near the place where you insert your debit card where it gains access to all the information on the card digitally, or they can be used in restaurants or bars — waiters may use a skimmer on their personal card reader. Skimmers can grab lots of information fast, and therefore can be very lucrative for their users.

Cards are then cloned from the information grabbed by the skimmer and used to get stuff. This is a very big deal here in the DFW area. Over in Sherman, for instance, the police issued a warning about cloned credit cards being used in the DFW area, apparently using information grabbed from skimmers placed on gas station pumps.

Another recent example? Last summer, patrons of a McKinney restaurant were victims of credit card fraud — lots of folk that ate a meal at the Blue Goose restaurant over in Collin County discovered that their cards had been used when they got their bills. Calling to complain, investigators eventually tied the credit card fraud to the restaurant, where it was discovered that their computer had been hacked.

Today, there’s a warning being issued to the DFW area by the Lubbock Police Department. Another credit card fraud scam is being investigated right now, using skimmers — it’s the 8th credit card fraud investigation involving skimmers that the Lubbock Police have been investigating so far this year. (Remember, we’re still in March.)

2. Phishing.

Phishing scams via email are another popular way to get credit card information. Sending out lots of emails that dupe people into providing their credit card information is an easy way to gather lots of credit information fast and use it to get things. Ditto grabbing the information over an open WiFi network at a local coffee shop.

3. Hack the Store.

Another way to get credit cards? Take them. The local Dallas CBS TV station keeps a tally on credit card grabs here, and in the recent past there have been security breaches where thousands of credit card accounts have been taken through invasion of online accounting systems at popular local stores like Target, Michaels, Neiman Marcus, etc.

Fighting Credit Card Fraud

Credit card fraud is so serious that both private industry and law enforcement agencies are working hard to find ways to make it harder to do. For instance, this month Visa announced a new “interactive button” that will allow you to “swipe” a purchase using your smart phone. Credit card companies are replacing existing credit cards with ones embedded with new “Chip-and-PIN” technology.

And they want to have more private information from you — like the location of your smart phone — in order to fight against financial losses they suffer from credit card fraud each year.

Police are investigating at both the local, state, and federal level.  And there are more and more insurance companies out there selling policies aimed solely at protecting against credit card fraud and identity theft (e.g., Lifelock).

See, for example, our earlier post, “FBI Bust $200+ Million Credit Card Fraud Ring: Charging Identity Theft and Fake Accounts, Phony Companies Used by International Organization of Companies and Individuals.

 

What is the Crime of Credit Card Fraud?

Credit Card Fraud involves using a credit card to get stuff without paying for it yourself, using fake credit. It can involve identity theft or lying on a credit application as well as using a stolen credit card (or credit card number) to buy things at stores or online. It is usually somewhat of a complex undertaking, where lots of credit cards are compromised in a relatively short period of time.

As for criminal laws, here’s the thing. First of all, taking stuff that is not yours is a crime. It’s theft, or when someone “… unlawfully appropriates property with the intent to deprive the owner of the property,” Texas Penal Code §31.03.

1. Theft is a Crime in Texas

When someone is arrested for fraud in Texas, they may face charges under the Texas Penal Code for theft, and their charge will be either a misdemeanor or a felony, depending upon how much was taken.

  • Theft over $1500 is a state jail felony, and if convicted, the defendant can face 180 days to 2 years in a State Jail Facility.
  • If the theft is over $20,000 but under $100,000, then there’s a possible sentence of 2 to 10 years in a Texas prison (operated or overseen by the Texas Department of Criminal Justice) as the crime is considered a Third Degree Felony;
  • Theft between $100,000 and $200,000 carries with it a possible sentence of 2 to 20 years in the Texas prison system as a Second Degree Felony;
  • Theft over $200,000 is considered a First Degree Felony and if convicted, the defendant can face a sentence of 5 to 99 years imprisonment in a Texas prison.

2. Fraudulent Use or Possession of Identifying Information is a Crime in Texas

Clever crimes get special treatment by lawmakers. When someone gets property though using their personal information, then under Texas Penal Code §32.51, they can be found guilty of a specific kind of crime, which is always considered to be a felony and will involve a sentence with time behind bars of either a Texas jail or Texas prison.

Under this law, “[a] person commits an offense if the person, with intent to harm or defraud another, obtains, possesses, transfers, or uses identifying information of: (1) another person without the other person’s consent.” This means using things like the following to get stuff:

  • Name
  • Social security number
  • Birthdate
  • Fingerprint
  • Password or electronic ID number
  • Financial Institution routing number and account number.

3. Credit Card Fraud is a Crime in Texas

However, since credit card fraud has become a special kind of illegal business operation, it’s been given its own special statute. The Texas Legislature has drafted and passed a specific law for crimes that involve using someone else’s credit card (or debit card) to get stuff.

Under Texas Penal Code 32.31, it is a State Jail Felony to use either a debit card or credit card (even if it’s expired) to get money or things. It’s a more serious felony if the credit card or debit card is owned by an elderly person. (Note: a state jail felony has a sentence with incarceration in a state jail facility, not in a Texas prison — that’s a lesser felony).

Specifically, it is credit card fraud and a crime if someone:

(1) with intent to obtain a benefit fraudulently, he presents or uses a credit card or debit card with knowledge that:
(A) the card, whether or not expired, has not been issued to him and is not used with the effective consent of the cardholder; or
(B) the card has expired or has been revoked or canceled;
(2) with intent to obtain a benefit, he uses a fictitious credit card or debit card or the pretended number or description of a fictitious card;
(3) he receives a benefit that he knows has been obtained in violation of this section;
(4) he steals a credit card or debit card or, with knowledge that it has been stolen, receives a credit card or debit card with intent to use it, to sell it, or to transfer it to a person other than the issuer or the cardholder;
(5) he buys a credit card or debit card from a person who he knows is not the issuer;
(6) not being the issuer, he sells a credit card or debit card;
(7) he uses or induces the cardholder to use the cardholder’s credit card or debit card to obtain property or service for the actor’s benefit for which the cardholder is financially unable to pay;
(8) not being the cardholder, and without the effective consent of the cardholder, he possesses a credit card or debit card with intent to use it;
(9) he possesses two or more incomplete credit cards or debit cards that have not been issued to him with intent to complete them without the effective consent of the issuer. For purposes of this subdivision, a card is incomplete if part of the matter that an issuer requires to appear on the card before it can be used, other than the signature of the cardholder, has not yet been stamped, embossed, imprinted, or written on it;
(10) being authorized by an issuer to furnish goods or services on presentation of a credit card or debit card, he, with intent to defraud the issuer or the cardholder, furnishes goods or services on presentation of a credit card or debit card obtained or retained in violation of this section or a credit card or debit card that is forged, expired, or revoked; or
(11) being authorized by an issuer to furnish goods or services on presentation of a credit card or debit card, he, with intent to defraud the issuer or a cardholder, fails to furnish goods or services that he represents in writing to the issuer that he has furnished.

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For more information, check our our web resources as well as Michael Lowe’s Case Results or read his in-depth article,

PRE-ARREST CRIMINAL INVESTIGATIONS – Dallas Justice Blog


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