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Credit Unions

ment is made not to a store nor to a bank, but rather to CREDIT UNIONS
Diners’ Club or to American Express. Diners’ Club cards SEE Financial Institutions
are used primarily at eating establishments. American
Express cards are used for airlines, hotels, and other travel-
related activities. No credit limits are established for
charge cards, but payment is expected in full within the CRIME AND FRAUD
next billing period to maintain one’s credit record. How-
ever, a current change in the approach to the charge card Both individuals and businesses commit many criminal
has been made by American Express to allow monthly activities that cost businesses, consumers, government
payments, just as if it were a bank credit card account. agencies, and stockholders considerable sums of money
each year. Business crime is not new; in fact, fraudulent
A second type of travel card is issued by airlines or
activities have been a common part of business operations
hotel chains. This card does not have direct money use,
for thousands of years. For instance, in 360 B.C.E. in Syra-
but serves instead as an upgraded service provider. Thus, cuse, Sicily (then a Greek colony), Xenothemis and a ship
included in this category are such cards as frequent flyer owner, Hegestratos, persuaded a customer to advance cash
cards, with which airline mileage is accumulated, to be by claiming that a vessel was fully laden with corn. Mar-
later used for upgraded or free flights. In addition, services
itime trade was at that time very risky, and many vessels
are provided to the cardholder such as early boarding of
were subsequently lost at sea. Hegestratos intended to
flights and/or other amenities. Also included in this cate- exploit this risk of loss at sea three days after the ship
gory are hotel chain cards that accumulate services at
sailed from port by sinking it. When the other passengers
hotels in that chain. Room upgrades, speedy check in and discovered Hegestratos’s plot, he panicked, jumped over-
check out, and help with reservations are among the ben- board, and drowned. This early example illustrates that
efits of this type of card. Furthermore, many hotels are
criminal, and especially fraudulent, activities have existed
partners with airlines, so money spent at a hotel can result within the world of business for some time and, unfortu-
in additional miles on the airline mileage account.
nately, will probably continue to do so.
A growing trend among the airlines is the issuance of
Under modern law, for a crime to have occurred, an
airline MasterCards or VISA cards. The airlines work with illegal act must have been committed and intent to com-
a bank to issue standard bank credit cards with one mod- mit the act must be shown. A crime is a violation of local,
ification: every dollar spent using that credit card is turned state, federal, or international law and is punishable by the
into airline mileage that can be turned in for airline tick-
appropriate government authority. Criminal activities are
ets and/or upgrades in travel classification. Thus, the ben-
usually defined as applying to a specific type of behavior
efit of the bank credit card is joined with the value of the
or action. Criminal activities can be committed by indi-
airline travel card.
viduals against a business as well as by businesses through
the actions of their employees against consumers, the gen-
SUMMARY eral public, and/or stockholders. Statistics regarding a
From a time when what was bought was paid for on the variety of crimes committed in the United States can be
spot, “plastic” has changed the way that consumers do found on the Federal Bureau of Investigation’s Web site
business and handle personal financial functions. Credit (http://www.fbi.gov).
cards allow a purchase now with payment in the future.
Debit cards result in an immediate deduction from a bank CRIMES COMMITTED BY
account without writing a check. Smart cards allow for INDIVIDUALS AGAINST
prepayment of expenses to aid in convenience when the BUSINESSES
expense needs to be paid. Travel cards permit charging of Business-related individual criminal activities are nor-
travel related expenses and the accumulation of travel
mally broken down into two categories: internal and
services and benefits. All of these items are part of a paper-
external.
less financial society accessed by cards of various types. In
fact, it is possible that the day of cards will at some point
Internal Crimes. Internal crime occurs when an employee
end and another means will be found to connect pay-
steals from or commits some other offense against the
ments for purchases. Until then, given the many ways to business. For example, depending on their jobs, employ-
purchase, wise consumerism is needed for the correct ees may have access to business files, records, or sensitive
choice of cards for an individual.
financial information. The dishonest employee could then
use this information to commit a crime against the busi-
Burton S. Kaliski ness. Generally, the higher in the business the employee,

178 ENCYCLOPEDIA OF BUSINESS AND FINANCE, SECOND EDITION