The Story of the Very First Case of Credit Card Fraud

“What in tarnation happened to my credit card?”

In 1899, the first use of credit cards emerged in the United States — for transportation companies that allowed passengers to ride private carriages on credit and then pay later.

Well, it didn’t take long for a farmer to find out what can happen when someone steals your credit card.  He found out the hard way he was responsible for the bill.

A Livestock Man received a Credit Card And Threw it Away 

As CreditCard.com discovered while researching the Library of Congress, the first ever case of credit card fraud occurred when a livestock man received a credit card from a transportation company and threw it out because he did not want to use credit.

Some scoundrel picked up the credit card and used it to take fancy rides on buggies with rubber wheels called Hacks.  At the time, a Hack ride was like taking a private limo to your destination – no doubt a saloon somewhere.

The scoundrel racked up a big bill and skipped town.  At the time, it was for the grand sum of $27; in today’s money, that is worth over $700, so it was no paltry sum.  The company billed the farmer for the fees at the end of the month, not knowing the card was assumed by a fraudster that happened upon it in the trash.

Ultimately, the card owner ended up paying the bill for the fraud activity on his own but he was sore because he had to ride streetcars while the fraudster rode in luxury in rubber-tired buggies. It wasn’t until the 1970’s that U.S. consumer regulations protected consumers from paying for fraudulent charges on their credit cards.

Imagine riding the streetcar while the fraudster got to ride in luxury!

Read the Original Newspaper Report Here from 1899

Things sure have changed here in the US with fraud and we have this original fraudster to thank for it.

Frank McKenna is the Chief Fraud Strategist for PointPredictive and a Fraud Consultant based in San Diego California