The Difference Between Credit Card Fraud and Identity Theft

Both, credit card fraud and identity theft are crimes, but in order to be protected, people have to really understand the difference between the two.

Credit card fraud refers to the stealing of one's credit card number to use it for fraudulent purchases. As a criminal activity is serious, however, almost all credit cards around the globe include fraud protection, except from debit cards. People think that because debit cards bear the logo of Visa or MasterCard like credit cards, they are protected from fraud. The truth of the matter is that it all depends on the bank that issues the debit card. There are cases that debit cards are stolen and owners had lost money. Then it's up to the bank's discretion to refund the money or not, but this is not happening before one month or so.

Consumers are not held responsible for fraud if they identify and report invalid credit card charges. In addition, the cost of getting a new credit card to replace the stolen one is undertaken by merchants and banks.

Identity theft refers to the use of personal information to use one's identity for fraud. In most of the cases, identity theft is used for terrorism, illegal immigration, espionage and blackmail crimes. Perpetrators typically steal social security numbers, ID cards, and passports, thus acquiring access to driving and criminal records.

In particular, identity theft is used to pose for another when apprehended for a crime (criminal identity theft), to use another's information to assume fake identity in daily life (cloning identity theft) and to use another's business name to obtain credit (business/commercial identity theft).

Perpetrators use several techniques in order to steal an identity. For example, they search into redundant equipment such as disposed computer servers or dumpsters, which contain mail with personal information. They search government registers, internet search engines, or public records search services. They skim through card readers or remote smart cards (RFID) ID cards, credit cards and passports. They hack public computers - this is why people are prompted to erase their log on information when they use public computers. They advertise fake job offers, mostly work from home etc, and they use the victims' full name, address, resume, phone numbers, and banking details. They browse social network sites (Facebook, MySpace etc) and they retrieve online details posted by users.

Victims of identity theft can suffer severe repercussions if held responsible for the actions of the perpetrator. In many cases, perpetrators with stolen IDs, who get arrested, use the fake ID and get bail. However, the victim of identity theft is left with a warrant in they name. Another possibility is to apply for a loan and get informed that one has already defaulted on a previous loan. This is identity theft. One good practice to anticipate or prevent fraudulent activity is to change postal address thereby diverting billing statements to another location.

In the U.S. identity theft is widespread and more endemic than other nations. This requires the use of more sophisticated and advanced technology systems in order to make ID theft more difficult.