Credit card hijacking

Credit card hijacking is a form of credit card fraud and the term is used when a person’s credit card is used by some unauthorized person (e.g. a thief or overaggressive vendor) to buy goods or services. The credit card owner usually has trouble reasserting control over the card, because usually they don't find out immediately, and the owner must distinguish legitimate purchases from illegitimate in a credible manner.

The first form of credit card hijacking is basically identity theft, which is the deliberate assumption of another person's identity. Identity theft is usually the result of serious breaches of privacy and often involves the victim compromising a great deal of financial and personal information allowing the thief to charge an existing credit card account or open up new credit card accounts in the name of the victim. Traditionally, methods of identity theft for credit card hijacking have involved mail interception or skimming of credit card data. As online transaction volumes increase, new methods for hijacking identities for credit card fraud include phishing and the use of spyware and botnets.

Cases of fraud cost the USA an estimated loss of billions of dollars each year. Even though you may not have been a direct victim, you share in the costs through taxes which go towards losses, investigations, and improved security. If you have been the victim of fraud, you should immediately contact the three credit bureaus (Experian, Transunion, and Equifax), after which further investigation will be taken over by the police or FTC, depending on the severity of the case.

The second form of credit card hijacking is the continued charging of a person’s credit card for a subscription to goods or services no longer desired by the credit card owner. This type of credit card hijacking was pioneered by major ISPs, credit monitoring services and online dating services, is perfectly legal, and is still common today in a wide range of subscription based goods and services. Credit card hijacking of this type came about as online subscription based marketers realized that traditional subscription systems, such as the annual subscriptions that paper magazines use, were an impediment to enrolling customers. A typical dial-up ISP, at US$24.95 per month, is US$299.40 annually. By breaking the subscription period into small units like months or quarters, and allowing direct monthly charging of the subscriber’s credit card, the psychological and economic barriers potential subscribers see are greatly reduced.

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