Investigating Credit Card Fraud: How It Works

When it comes to investigating credit card fraud, several entities play a role. This article explores who typically investigates credit card fraud, the likelihood of law enforcement getting involved, and the processes involved in investigating such crimes.

Who Investigates Credit Card Fraud?

Banks, credit card companies, and special investigative units of large networks like Visa and Mastercard ((MC)) frequently conduct regular investigations into credit card fraud. These organizations have dedicated teams to look into cases and prevent fraudulent activities. Additionally, in some cases, law enforcement agencies can become involved, but typically as an ancillary part of another investigation. For instance, during a case involving store and home burglaries, we often found stolen credit cards and information.

Do keep in mind that in theory, your bank and possibly law enforcement can investigate. If the fraud involves the US mail, Postal Inspectors may get involved, or if it's multi-state or international, the FBI might have jurisdiction. Otherwise, it’s usually handled by local or state police.

Reality Check: What Really Happens?

While the realms of theoretical possibilities exist, in reality, very few cases actually get investigated. Banks typically take minimal action, often doing nothing more than processing the paperwork related to your claim. They may contact the merchant to see if there are any details that contradict your claims. If none are found, the bank will generally refund your money. If the amount is very significant or there are extraordinary circumstances, the bank may notify law enforcement. However, this is a rare occurrence.

If you report the fraud to the police, they will likely take a report and give you a case number. You might get a follow-up call asking for more details, but ultimately, very little action is taken. The report will be filed away, and no further resources will be spent on it unless the perpetrator is practically begging for arrest.

What You Can Do

Credit card issuers have staff or contacts dedicated to investigating fraud complaints. Whether you can receive a credit for the fraud depends on the Terms and Conditions for your account. The investigation typically involves screening claims to determine if they are indeed fraudulent and then passing the case to another staffer who will conduct the investigation and find the perpetrator. Remember, most banks are primarily interested in recovering the stolen funds.

In some cases, local police can investigate if the fraud involves someone you know, or if it’s a local business. You can also report the crime to the FBI and the Federal Trade Commission (FTC) if you wish, but given the limited resources, these agencies are unlikely to investigate unless the amount involved is large or there is a pattern of abuse.

Conclusion

The reality of credit card fraud investigations is complex. While several entities have a role to play, the likelihood of thorough investigation is slim. Understanding these processes can help you take appropriate action and mitigate the impact of fraud on your finances.