| ===== Phrack Magazine presents Phrack 16 ===== | |
| ===== File 5 of 12 ===== | |
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| | 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 | |