My friend, who used to work in the anti-fraud and anti-money laundering division of a large multinational bank, told me some things over drinks about credit card fraud that frankly shocked me.
Among them, there was this tidbit: they typically don't even bother going after "small time" credit card thieves. They aren't worried about the guy who takes an old woman's card and racks up $500 in charges. In fact, because of various loss avoidance policies, it is more cost effective for the bank to just cancel the card when it notices fraudulent activity (or when you report it) and call it a day.
I guess I've always assumed that when you report a card as stolen, the bank does something about it. Maybe not a SWAT team or CSI-style crime lab, but something, you know. Perhaps a closer look at the fraudulent transactions... or an attempt to "trap" the thief... or pulling security camera footage from ATM machines, street corners, stores, etc.
Not so, says my friend. If someone racked up $500 in bogus charges on a stolen card, it's already figured into the bank's overall business model. This loss is more than made up by some poor chump in the Midwest paying 14.99% or even 29.99% on his debts from college, when he put a bunch of textbooks and a weekend vacation on his card.
Sad, but true: honest cardholders who pay their bills on time are subsidizing the criminal activities of the few. The amount of money, resources, and talent necessary to pull security footage, coordinate with local law enforcement, and so forth are not worth it for $500... or even $1,000.
According to my buddy, a bank's anti-fraud division is primarily tasked with tracking and handing over to the FBI or other agencies the "big fish." People who are stealing thousands of credit cards wholesale off the Internet, those who rack up $50,000 or more in bogus charges per year, drug-related money laundering, big-time tax deadbeats.
For an overworked anti-fraud team, this is where the priority is. Of course, all of this pisses me off. I had a credit card stolen a couple years ago, and while it was all sorted out in short time (I got a new card), it angers me that the thief is still out there somewhere, milking someone's account instead of doing honest work for his money. I believe in justice, and it's sad that banks don't even care about small-time crooks.
So here's how to catch a credit card thief. Disclaimer: This information provided for entertainment purposes only. I am not responsible for any injury or loss that may result should you decide to try this. Use at your own risk.
1. Once you notice fraudulent charges, swiftly contact the last merchant the crook bought from. Let's say he ordered something off BestBuy.com. So call them up, provide your credit card number if necessary, and say you want to make sure the new flat-screen TV you ordered is being sent to the right address. "It's being sent to 250 Park Avenue South, right?" you can ask, or whatever your address is. The customer service rep will say, no, sir, it's actually being sent to 1000 Scummy Con Artist Lane, Topeka, Kansas, etc... "Oh, I listed that one, that's fine. Thanks for your time." Thank the rep and hang up.
2. Don't go vigilante here. Think of yourself as the lovable, if confused private detective in Bored to Death -- not Dexter Morgan in Dexter. You now have an address, but it could be his friend's address, or even an innocent person's address (if the crook chose no signature required for delivery, he could hypothetically list anyone's address and then just scoop the box off the front porch if the family isn't home). So don't burn down the home.
3. Contact your credit card company. Tell them your card was stolen ASAP so that you get the credit line closed down and a new card issued to you. Do this immediately after getting an address, so that you will remain eligible for $0 liability on that fraudulent charge.
4. Contact local law enforcement, both in your area and where the TV or other item is scheduled to be delivered. Also contact the FBI. Tell them you called Best Buy (or wherever) about an order you did not place, and that you were given an address for where the item is supposed to be delivered. Also tell them you have called your bank and reported the card as stolen. Impress upon them how distraught you are and what a scumbag the thief must be... he has probably done this to hundreds of others. Which is true. Credit card thieves are rarely first time offenders, according to my friend. In fact, for some, it's an easy way of life, especially with the economy as it is. They develop a routine and consider it a job.
5. With any luck, the cops will nail the scumbag. No guarantees here, but your odds of getting retribution are much higher now that law enforcement is directly involved. Unless you do this, your small-time crook might just be listed in the "write-off" section of your bank's balance sheet and dismissed altogether.