===== Phrack Magazine presents Phrack 16 ===== ===== File 5 of 12 ===== ---------------------------------------------------------------------------- | The Laws Governing Credit Card Fraud | | | | Written by Tom Brokaw | | September 19, 1987 | | | | Written exclusively for: | | Phrack Magazine | | | ---------------------------------------------------------------------------- (A Tom Brokaw/Disk Jockey Law File Production) Introduction: ------------ In this article, I will try to explain the laws concerning the illegal use of credit cards. Explained will be the Michigan legislative view on the misuse and definition of credit cards. Definition: ---------- Well, Michigan Law section 157, defines a credit card as "Any instrument or device which is sold, issued or otherwise distributed by a business organization identified thereon for obtaining goods, property, services or anything of value." A credit card holder is defined as: 1) "The person or organization who requests a credit card and to whom or for whose benefit a credit card is subsequently issued" or 2) "The person or organization to whom a credit card was issued and who uses a credit card whether the issuance of the credit card was requested or not." In other words, if the company or individual is issued a card, once using it, they automatically agree to all the laws and conditions that bind it. Stealing, Removing, Retaining or Concealment: -------------------------------------------- Michigan Law states, that it is illegal to "steal, knowingly take or remove a credit card from a card holder." It also states that it is wrongful to "conceal a credit card without the consent of the card holder." Notice that it doesn't say anything about carbons or numbers acquired from BBSes, but I think that it could be considered part of the laws governing the access of a persons account without the knowledge of the cardholder, as described above. Possession with Intent to Circulate or Sell ------------------------------------------- The law states that it is illegal to possess or have under one's control, or receive a credit card if his intent is to circulate or sell the card. It is also illegal to deliver, circulate or sell a credit card, knowing that such a possession, control or receipt without the cardholders consent, shall be guilty of a FELONY. Notice again, they say nothing about possession of carbons or numbers directly. It also does not clearly state what circulation or possession is, so we can only stipulate. All it says is that possession of a card (material plastic) is illegal. Fraud, forgery, material alteration, counterfeiting. ---------------------------------------------------- However, it might not be clearly illegal to possess a carbon or CC number. It IS illegal to defraud a credit card holder. Michigan law states that any person who, with intent to defraud, forge, materially alter or counterfeit a credit card, shall be guilty of a felony. Revoked or cancelled card, use with intent to defraud. ------------------------------------------------------ This states that "Any person who knowingly and with intent to defraud for the purpose of obtaining goods, property or services or anything of value on a credit card which has been revoked or cancelled or reported stolen by the issuer or issuee, has been notified of the cancellation by registered or certified mail or by another personal service shall be fined not more than $1,000 and not imprisoned not more than a year, or both. However, it does not clearly say if it is a felony or misdemeanor or civil infraction. My guess is that it would be dependant on the amount and means that you used and received when you defraud the company. Usually, if it is under $100, it is a misdemeanor but if it is over $100, it is a felony. I guess they figure that you should know these things. The People of The State of Michigan vs. Anderson (possession) ------------------------------------------------ On April 4, 1980, H. Anderson attempted to purchase a pair of pants at Danny's Fashion Shops, in the Detroit area. He went up to the cashier to pay for the pants and the cashier asked him if he had permission to use the credit card. He said "No, I won it last night in a card game". The guy said that I could purchase $50 dollars worth of goods to pay back the debt. At the same time, he presumed the card to be a valid one and not stolen. Well, as it turned out it was stolen but he had no knowledge of this. Later, he went to court and pleased guilty of attempted possession of a credit card of another with intent or circulate or sell the same. At the guilty hearings, Mr. Anderson stated that the credit card that he attempted to use had been acquired by him in payment of a gambling debt and assumed that the person was the owner. The trial court accepted his plea of guilty. At the sentencing, Mr. Anderson, denied that he had any criminal intent. Anderson appealed the decision stating that the court had erred by accepting his plea of guilty on the basis of insufficient factual data. Therefore, the trial court should not have convicted him of attempted possession and reversed the charges. The People of the State of Michigan vs. Willie Dockery ------------------------------------------------------ On June 23, 1977, Willie Dockery attempted to purchase gas at a Sears gas station by using a stolen credit card. The attendant noticed that his driver's license picture was pasted on and notified the police. Dockery stated that he had found the credit card and the license at an intersection, in the city of Flint. He admitted that he knowingly used the credit card and driver's license without the consent of the owner but he said that he only had purchased gasoline on the card. It turns out that the credit card and driver's license was stolen from a man, whose grocery store had been robbed. Dockery said that he had no knowledge of the robbery and previous charges on the cardwhich totalled$1,373.21. He admitted that he did paste his picture on the driver's license. Butagain the court screws up, they receive evidence that the defendant had a record of felonies dating back to when he was sixteen and then assumed that he was guilty on the basis of his prior offenses. The judge later said that the present sentence could not stand in this court so the case was referred to another court. Conclusion ---------- I hope that I have given you a better understanding about the law, that considers the illegal aspects of using credit cards. All this information was taken from The Michigan Compiled Laws Annotated Volume 754.157a-s and from The Michigan Appeals Report. In my next file I will talk about the laws concerning Check Fraud. -Tom Brokaw