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Credit Card Fraud is Declining

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New research has shown a helpful decline in credit card fraud. According to a report discussed in Forbes magazine, fraud dropped to $6.4 billion in 2018, down from $8.1 billion in 2017. The numbers were compiled by Javelin Strategy & Research.

These numbers might not mean much to consumers, since banks end up eating the losses. But they are good news nonetheless, since consumers can end up bearing some of the cost of fraud, such as higher interest payments. However, the report was not entirely positive.

Scammers Are Changing their Focus

Although credit card fraud has declined, a new scam has emerged. Instead of stealing your credit card, scammers are opening new accounts using your personal information (date of birth, Social Security number, etc.). The number of new account fraud increased from $3 billion to $3.4 billion over the past year, or an increase of more than 10%.

Scammers are also shifting their focus from credit cards to prepaid cards or merchant debit cards. These cards are often more vulnerable because the merchant does not yet have the layers of security that bank-issued credit cards do. For this reason, it is easier for a scammer to open a new merchant card.

If you do not have credit monitoring, then you might have no idea that someone has opened a credit account using your identity—until you go to get a loan and realize that your credit has been shredded. (Don’t count on the scammer to pay your loan for you!) At that point, it can take a lot of work to undo the identity theft and financial fraud.

Should You File for Bankruptcy if You are the Victim of Fraud?

Untangling identity theft is difficult. You need to carefully document the theft and work with creditors to realize that you did not, in fact, take out a loan or open an account. This can take time and you might be unsure of your rights.

One option people consider is bankruptcy. Is this a good option for you? In the perfect world, no one would be responsible for debts incurred because of identity theft. But that isn’t always the case.

Whether you should file bankruptcy to address identity theft is one of those issues that should be considered on a case-by-case basis. Consider the following factors:

  • Is it possible to get creditors to acknowledge the debt is not really yours? If so, you probably shouldn’t file for bankruptcy.
  • What is your credit score like? Some victims of identity theft have watched their score tank, and filing for bankruptcy can’t really drive the score lower. However, if you still have decent credit, you might want to skip bankruptcy.

Contact Nowack & Olson

Whether to file for bankruptcy is hard to analyze on your own. We are here to walk you through the different considerations.

At Nowack & Olson, our Florida credit repair lawyers have helped many people who are victimized by identity theft regain financial control. For more information, please call 888-813-4737. We have offices around South Florida, including Miami, Boca Raton, Plantation, and Jupiter.

Resource:

forbes.com/sites/tomgroenfeldt/2019/03/18/credit-card-fraud-is-down-but-account-fraud-which-directly-hurts-consumers-remains-high/#5f66b2e920bf

https://www.floridabankruptcynow.com/house-democrats-look-to-ban-use-of-credit-score-when-setting-car-insurance-rates/

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