HOLIDAY SEASON BRINGS SEASONAL IDENTITY CRIMES – FRAUD OF THE SEASON IS INSTANT STORE CREDIT IN YOUR NAME

It will soon be Christmas and as the holidays set in stores, shopping districts, and the malls of America will be busy with shoppers and identity thieves. Christmas and New Years are the harvest season for identity thieves, as they commit their frauds and theft, while honest citizens and shopkeepers are too busy to pay careful attention.

Among the many crimes of the season is the “instant store credit” theft. Using forged identity documents and a stolen ATM or credit card number, identity thieves present themselves to store clerks as prepared to buy merchandise. The identity thief provides identification and a forged credit card, but before the transaction is completed, the thief applies for instant store credit. Many merchants’ provide incentives to customers to apply for store credit as a way of improving sales and reducing the expenses of credit card charges. Sales clerks are often encouraged to offer instant store credit if a customer provides identification and a seemingly valid credit card.

Once instant store credit is granted the identity thief purchases the maximum amount of merchandise allowed. The amount is usually under $1000. The items purchased have immediate resale value on the street or, in a variant on the scam the merchandise is returned for cash within hours of purchase.

This technique for identity theft works because criminals know that “credit checks” for instant store credit are not performed before the credit is issued. Customers are in a hurry, sales clerks are incented to provide instant credit, and the credit department of the store are swamped.

Last Christmas, we a KnightsBridge Castle had a client who discovered 27 applications for instant store credit in a two day period before Christmas. 11 cards were granted. All cards were maxed out within moments of issue. The client discovered the crime only when the cards arrived in the mail.

Credit monitoring, fraud alerts, or even a credit freeze does not prevent these crimes. Why? Because the credit is issued before a credit check is run.