We’re all cooped up inside right now, and that means most of us are spending a great deal of time online. The only shopping most of us can do is online as well, which means many people will be using their credit cards more often.

 

This means it’s a good time to talk about some common mistakes people make with credit cards. Often, these mistakes can  be avoided. The people who make them don’t realize that they’re committing a crime.

 

Nevertheless, these mistakes could open you up to criminal charges.

 

Application Fraud

 

If you’ve ever made your income look just a little bit higher on a credit card application than it actually is, then you’ve committed fraud. A person commits fraud when they misrepresent themselves for financial gain.

 

For the most part this doesn’t come up unless you stop paying your bill. Yet it can come up if the credit card company sues you, or if you file for bankruptcy. In both cases, the credit card company audits your account, which includes taking a look at the application, which they keep on file.

 

Unauthorized Use

 

There are two ways people get into trouble with the unauthorized use of credit cards.

 

The first is when a girlfriend or boyfriend who happens to live with the owner of the credit card “ borrows” the card on a regular basis to shop.  While it’s not illegal to buy something on someone else’s card with permission, it’s easy for the owner of the card to claim you’ve used the card beyond the scope of that permission. You also usually can’t use the card without leaving a signature, which means you could be accused of forgery. Being an authorized user ends this problem, as does getting the card owner to simply make the purchases themselves.

 

The second case is the case of the authorized user who oversteps. Many people add each other to cards as authorized users, but only the primary cardholder truly owns the card.

 

When that person dies, you can get into deep trouble if you keep using the card. The credit card company won’t come down on you right away, but they will begin investigating if payments ever stop. Few people ever pay off the card they’re authorized users on, even if they make payments for years.

 

If the owner of the card dies, cut up your copy of the card immediately, then inform the credit card company and close the account.

 

Free Trial Fraud

 

You might be tempted to sign up for a lot of free trial offers right now. They’re everywhere: for streaming services, software services, and classes.

 

Often the deal is you will get 14 days or 30 days. As long as you cancel before the trial period is up you won’t be charged.

 

Of course, people forget to cancel all the time, and cancellation is often made into a giant hassle. So some people like to access the trial with a fake credit card. They often reason that they’ll switch credit cards later if they want to buy the product.

 

The problem is that fake credit cards are illegal in their own right. You’re also likely to be charged with theft or fraud for obtaining the use of the software or service under false pretenses. When you sign up for those trials you’re entering an agreement: you can have access if you’re willing to give them a valid credit card. If you get access without the valid credit card then you’ve created a problem.

Chargeback Fraud

 

Be careful when you start disputing charges. The tool exists for you to reverse unauthorized or fraudulent charges, but many people use it the wrong way.

 

You can’t, for example, dispute a charge just because you don’t like the product or the quality of the service. That’s considered a form of fraud because you still received the product or service.

 

Many people do this without intending to because they don’t recognize the merchant name on their statement. Keep in mind the DBA of the merchant may differ from the name they charge you under.

 

Need Help?

 

This office is working remotely during the course of the Covid-19 crisis. While arrests and court cases have slowed down, the truth is you could still end up charged and arrested during this time.

 

If you already know you’ve got a pending case, now is the ideal time to find an attorney if you don’t have one already. Call today to set up a free consultation.