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What Is Credit Fraud?

Fraud is usually defined as misrepresentation of and by one party that eventually leads to losses or damages inflicted on another party. The latter may bring the former to court trial by filing a suit generally called fraud litigation. This type of legal process is a civil lawsuit wherein the plaintiff makes a claim of fraud against the defendant, usually a business or investment company. One type of fraud is called credit fraud wherein a person utilizes the credit card or credit card number of another in order to gain money or other items by deception.

Credit fraud entails the use of another individual’s credit card or credit card number, usually one that has been stolen. In the past, credit fraud was limited the theft and use of credit cards in order to purchase goods or services. However, with the advent of technology, credit fraud has expanded to the mere theft and possession of the credit card number, which can be used to make purchases on the Internet. Thus, the need for the actual, physical credit card has been eliminated.

Another type of credit fraud involves opening a credit account under the name or identity of another individual. The individual will only know that credit fraud has occurred once he or she receives the billing statement. The perpetrator of a credit fraud often cultivates information on an individual before he or she takes over an account or creates one in the fraud victim’s name.

Credit fraud is one of the most difficult to prove fraud cases since most perpetrators are well-practiced and adept.

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