Credit Card Fraud.

"Tommy", the waiter taught me all about Identity Fraud way back in 1988, before the word was even coined.

Tommy, a waiter at a famous restaurant in New York City, was ecstatic when he told me about the $200 tip he had just received! Little did I know at the time, that was my first experience with Credit Card Fraud. The year was 1988 and I was a brand new assistant manager. Of course, I was really happy for Tommy until I found out later that Tommy regularly received "outrageous tips". No one got any tips even close to his! I started wondering , why just Tommy? I began to look into his tips and discovered that over a one month period, Mr. "Super Waiter" received a total of almost $6000 in tips!

Some may say it was none of my business, but at the time, this was more than twice my monthly earnings and Tommy only worked part-time to my full-time hours, making him better paid than myself by a factor of 4! I thought that maybe I was in the wrong end of the business. Here's how he did it.

Two to three times a week, during his shift, and when a new assistant was in charge, Tommy had his accomplices come in. They had a good time with plenty to eat and drink. They would pay by credit card and Tommy brought the receipt to the manager for approval. Usually, all a manager verified was, card present, expiration date, signature, and bank status (was it listed in the "Stolen Credit Card Book", a weekly printout containing stolen credit card numbers). After manager approval, the customer filled in the tip, in Tommy's case, hundreds of dollars.

So, where's the identity fraud? The credit cards were never in the "Stolen Book", the customer was always present to sign the credit card slip, and they seemed to have had a good time. The card fraud occurred when they presented the card to Tommy and he accepted it. You see, these buddies of his were involved in credit card theft of new cards never delivered to the owners. If you never received it, how do you know that it was stolen?

Tommy was eventually terminated for something else. We had no proof that he didn't check Identification upon receiving the stolen credit cards as payment. He always claimed he did!

The point is this, credit card fraud has been around for a long time, probably as long as there has been credit cards. Today, with the advent of the internet, it has just gotten a lot more sophisticated.

“In a 2004 Report, the FTC stated that "Credit card fraud was the most prevalent form of idtheft, representing 28% of all thefts reported". The advent of "camera cell phones" has made it a really simple matter of recording card numbers, pins, account numbers or anything else for that matter over a person's shoulder while they are conducting financial transactions.“

Why am I a victim of Credit Card Fraud and I don't even have a credit card?

The quick answer is, you were probable a victim of a more sinister cousin, called identity theft first. The card fraud is more than likely, just a consequence of this theft. Your identity may have been stolen and credit applied for in your good name. If a bank card was issued, chances are excellent that other loans may have been applied for and gotten approvals. You must act quickly. The longer you delay, the more damage is likely to be done to your credit rating.

The Federal Trade Commission reported that in 2004, "Credit card fraud was the most common form of identity theft, accounting for 28% of thefts reported". With the use of a "camera cell phone", a criminal can record a person's card number, pin, account number and anything else over a consumer's shoulder, (shoulder surfing), while they carry out ATM transactions.

Coincidentally, there's an easy fix to shoulder surfing. Make sure nobody is standing right behind you when you’re using an ATM. He or she may be trying to secretly photograph or video your bank card number and password with a camera cell phone. Always shield your hand and the screen, even if there is no one directly behind you. There is technology available to record transactions from a distance.