Is it considered fraud if I'm abusing an error? 7 Answers as of May 30, 2013

I was just wondering if this is considered fraud. So let’s say, my credit card company lets me earn 1% cash back or gift cards points. So one day, I cashed the points for like 200 points for $200 gift card for a store. Then, I notice that it never took the 200 points out so I keep getting gift cards out from the credit card company until the company catches the mistake and changes it. So now I have like $1,000 of I gift cards. Is that considered fraud since I’m abusing an error on the credit card company? Do I have liability or get arrest for it? What if I give the gift cards to a friend to use? Are they liable?

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Law Office of Andrew Roberts
Law Office of Andrew Roberts | Andrew Stephen Roberts
Yes it is both civil and criminal fraud (theft).
Answer Applies to: California
Replied: 2/9/2012
Dennis Roberts, a P.C.
Dennis Roberts, a P.C. | Dennis Roberts
If your friend doesn't know about the error I don't see where he has liability. But there are plenty of cases where a bank accidently credits a large chunk of money to someone's account and he just sees it as a windfall and goes on to use it. It is certainly grounds for a civil suit and may well be grounds for prosecution. If it were me I would stop using the gift cards and if the company sends another just sent it back telling them you are not entitled to it and leave it alone.
Answer Applies to: California
Replied: 2/9/2012
The Law Office of Harry E. Hudson, Jr.
The Law Office of Harry E. Hudson, Jr. | Harry E. Hudson, Jr.
Yes.
Answer Applies to: California
Replied: 5/30/2013
The Law Offices of Christopher J. McCann
The Law Offices of Christopher J. McCann | Christopher J. McCann
Yes. It is technically a crime if you use those cards. Even though you were given the cards, you now know you do not have authorization to use them. It is a form of fraud.
Answer Applies to: California
Replied: 2/9/2012
Diefer Law Group, P.C.
Diefer Law Group, P.C. | Abel Fernandez
If the mistake was by the credit card this should not be criminal fraud. If you actively deceived the credit card company that would be criminal fraud for which you would be liable. Here, it sounds like you could not be liable of a crime but the credit card company can require you pay the money back. That they can do.
Answer Applies to: California
Replied: 2/9/2012
    Hammerschmidt Broughton Law
    Hammerschmidt Broughton Law | Mark A. Broughton
    Yes. You knew you were doing something wrong, and you "took" property of another to which you were not entitled. Did you return the money/points to the credit card company? If not, you would be liable - either as restitution in a criminal case or damages in a civil action to recover the losses - for the amount to which you were not entitled.
    Answer Applies to: California
    Replied: 2/9/2012
    Law Offices of Laurie Peters
    Law Offices of Laurie Peters | Laurie Peters
    Once the credit card company finds the glitch you will have to pay them back. Since you know that you didn't earn them it is theft. I would be no different if you withdrew money from the bank and the bank for some reason did not deduct the account. Eventually they would find it, and you would have to pay it back. You know you didn't have the money you were taking.
    Answer Applies to: California
    Replied: 2/9/2012
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