True or false: Did rock singer Courtney Love take out 104 American Express cards, charge $352,059.67 to them, and then refuse to pay off the charges?
In a real-life mystery that would have even Robert Downing Jr.’s indomitable Sherlock Holmes scratching his head, American Express is suing rock singer Courtney Love for $352K in charges to credit cards issued in her name. Love, in turn, is countersuing American Express, claiming that she never made the charges, nor even took out the 104 Amex credit cards issued in her name in the first place. Love, according to TMZ, is suing the behemoth card issuer for an unspecified amount in damages and interest, accusing Amex of “messy business practices,” by allowing a large number of credit cards to be issued in her name without her knowledge.
The answer to the question of who originated the charges will be for detectives and two armies of lawyers to sort out. Whether Love indeed was the victim of fraudulent credit card charges, as her lawyer implies, or whether she is simply looking for a way to avoid paying off credit card debt, we may never know. Whatever the outcome of the cases eventually may be, one thing is for sure: before the dust settles, both sides will likely have spent much more than three Grand in lawyers’ fees alone.
Whether Love was a victim of fraud or not, the case is a sobering reminder to stay on the alert. The dangers of credit card fraud are very real, and growing increasingly common. Like thousands every year, Love could well be the victim of identity theft; fraudsters could well have gotten hold of her personal financial information and used it to open credit card accounts in her name.
Celebrities like Love and other well-known personalities living in the public eye are a popular target for identity thieves. Steven Spielberg, Oprah Winfrey, Michael Jordan, Paris Hilton, and even Tiger Woods have all been victims of identity fraud of varying degrees of seriousness.
High-profile, wealthy persons may be particularly vulnerable to credit card fraud, because the usual security checks that credit card companies have in place to track unusual purchases are less effective in the case of jet-setting, big spenders. Card issuers’ fraud departments electronically monitor all credit card charges, and if an unusual pattern of charges occur, the cardholder will typically be contacted. For example, if you always use your credit card for charges below $500, if you suddenly charge a purchase of $1,500, you may get a call from your card issuers’ fraud department. Similarly, if you always make charges in Kentucky, and suddenly use your card for charges when travelling overseas, you are also likely to be targeted for a fraud check.
For people of average means aberrations in spending patterns are easy to discover. For celebrities and other jetsetters, large charges in numerous countries and locations are often the rule rather than the exception. This makes it more difficult for credit card companies to catch cases of identity fraud early in the game. In these cases, the crime may not become known until the victim of the fraud refuses to acknowledge and pay for the charges.
For regular Joes like you and me, the case is a good reminder that you can’t just rely on your credit card company to protect you from identity theft and credit card fraud, you need to stay on the alert as well. Even though card issuers, and not cardholders, are on the hook for fraudulent charges, cardholders are responsible for notifying the card issuer of unauthorized charges within a reasonable period of time. Most credit card companies do not extend their zero liability policy to credit card charges more than 60 days old.
To avoid falling victim to identity fraud, follow basic precautions to protect yourself from credit card theft. Always carefully read your credit and debit card statements every month, and follow up on any charges you don’t recognize, even minor ones. Likewise, at least once a year, but preferably every six months, obtain a copy of your credit card and review it carefully to make sure that no one has used your personal information to open credit accounts in your name. If you find discrepancies, immediately alert your credit card company and the appropriate authorities to report the identity theft.