Terrifying examples of credit fraud & how to avoid them

December 15, 2022

In 2021, The Federal Trade Commission (FTC) reported an astronomical spike of over 70% in fraud compared to the previous year. Throughout 2021, consumers reported over $181.6 million in credit card fraud alone.

If you need any more reasons to protect your finances from fraud, here are nine truly disturbing stories that will make you want to store your credit cards away for the foreseeable future.

1. You’ve Got Mail Fraud

Most of us like our mailman even if our dogs don’t. But maybe the dogs are onto something…

In 2018, three New York area USPS employees conspired with six other people to steal credit cards and personal information directly from postal recipients.

Postal employees intercepted credit cards and used the victims’ personal information in other mail to activate them.

The stolen credit cards were used to purchase luxury goods like Chanel, Fendi Hermes, and Dior before reselling them online through a luxury consignment website owned by one of the defendants.

This crime ring raked in $1.3 million over multiple years before being arrested and indicted.

2. Address Change Chaos

In December 2015, Amy Wang and her husband started receiving unexpected credit cards, credit denials, and bills in the mail. After calling around for answers, they uncovered $25,000 in fraudulent purchases at Bloomingdales and Macy’s.

Then things got worse. The emboldened thieves processed an address change redirecting Wang’s mail for almost two months. They redirected the mail to a low-income housing unit five miles away from them.

The thieves received W-2s, bank statements, tax forms, and more since it was at the year’s end. Even their kids’ Social Security numbers were compromised.

There were hundreds of dollars in unrecoverable fees. It also resulted in lost income on Amy’s rental properties and lost wages for her workers.

3. Credit Card Fraud for Clout

Criminals should have sentences comparable to their actions. That wasn’t the case for a Virginia man who has repeatedly committed credit card fraud. 27-year-old Troy McFarland was released under location monitoring after his arrest for committing identity theft on a dozen people.

He caused over $74k in losses with purchases like a $14,310 Rolex watch and $16k in IKEA furniture.

Three months after his arrest, he cut off his ankle monitor and fled. In the months he spent dodging law enforcement, he released music videos bragging about “making $30k off a $15 visa.”

When he was arrested again, police found more fraudulent credit and debit cards on him. He’s now serving 10+ years in prison.

4. Grifting From Granny

You’d never expect your family to steal from your elderly relatives. That’s why this fraud case is so alarming. In 2014, Kami Reihman of Bozeman, Montana moved in to help her elderly grandmother after the death of her husband.

By 2016, suspicious family members started an investigation. Detectives uncovered that Kami used her grandmother’s credit cards for $100,000 in unauthorized purchases.

She also drained a bank account, taking her grandmother’s balance from $71,460 to $3,500. What did she spend the money on? $24,200 at a tanning salon, $1,200 at a gym, and $2,400 on Isagenix supplements.

The admitted thief was ordered to pay over $25k in restitution plus a six-year deferred sentence.

5. Small Business Swindler

When small business owners are caught in the crossfire between business credit card scammers and the bank, the results can be disastrous.

A food truck equipment business in British Columbia did everything right. They checked ID, ensured the credit card was present, and watched the customer sign the receipt. But they still had no idea they were dealing with a credit card scammer.

The fraudster made off with the equipment and the bank unexpectedly pulled $23,032 from their bank account to cover the loss. It took months of pleading and news organization involvement for the business owners to get just a partial refund of $16,760.

6. Millionaire Mega Hacker

In 2010, one of the largest identity theft attackers was sentenced to 20 years in prison. Alberto Gonzalez and his co-conspirators hacked into multiple retailers to siphon out 40 million credit card and debit card numbers.

It’s places you’ve likely shopped at before–TJX Companies, 7-Eleven, Barnes & Noble, OfficeMax, and BJ’s Wholesale Club. He and his co-conspirators simply drove past the unassuming retailers looking for unsecured wireless networks.

They reprinted the stolen cards and used them to withdraw thousands at a time from ATMs. When Gonzalez was finally arrested, he had multiple properties, several Rolex watches, a BMW, and $1 million in cash buried in his backyard.

7. Neverending Nightmare

After her wallet was stolen in a bar, an LA Times editor’s identity theft funded the escapades of four thieves over two years. The thieves used her debit card the morning after stealing it and opened checking accounts and credit cards under her name.

They changed emails and phone numbers on her existing accounts. Wrote bad checks under her name. They even attempted to steal more info by calling, emailing, and sending mail masquerading as her bank.

They also rented a Tesla under her name (and stole it), wrote a check for bail where the jailbird skipped court, and wreaked havoc on multiple aspects of her life.

8. The Imposter

In 2013, an Ohio woman received calls from a credit card company asking her to verify an account opening. She crosschecked the bank’s phone number and denied the account opening, but the bank still sent the new credit card to an unauthorized address.

The fraudster was so thorough in infiltrating her credit, that their false information was being accepted over her real information.

The thief had used her identity under the radar for six months. By the time she found out her identity was stolen, there were over 50 attempted accounts. The imposter built an entire life off of this woman’s credit and left her cleaning up collections and credit issues for years.

9. Credit Card Surprise

A Hayward, California woman went to check her mail and was met with a stack of 70 credit cards from Chase Bank. Each of the cards had a different name and the woman’s credit card number on the back.

Someone had infiltrated her account and added 70 people as authorized users on her credit card. What’s worse is that the addition of that many authorized users didn’t activate any fraud detection measures at the bank. They didn’t even notify her of the changes!

Fortunately, the bank closed her account and changed her login information before any purchases were made, but that’s a terrifying experience for anyone.