Carding is a type of cybercrime in which criminals illegally gain access to payment card data (card number, CVV, expiration date, cardholder name) and use it for unauthorized purchases, withdrawals, or sales on the dark web. It's not only financial fraud but also a privacy violation, often associated with hacking. For educational purposes, below I'll discuss the implications in the US (with a focus on the CFAA) and the EU (GDPR), and provide a comparison. The explanation is based on key regulations, case law, and reports (such as those from the FTC and EDPB). Please note: this is an overview, not legal advice — for real-world cases, consult an attorney.
1. Legal Consequences of Carding in the US: Focus on Criminal Liability
In the United States, carding is classified as a federal crime because it affects interstate commerce and electronic systems. The primary law is
the Computer Fraud and Abuse Act (CFAA, 18 USC § 1030), passed in 1986 and repeatedly amended (most recently in 2024 through the National Defense Authorization Act). The CFAA prohibits unauthorized access to "protected computers" (any device on a network, including bank or payment system servers), which directly applies to carding: data theft through phishing, SQL injection, or malware is considered "exceeding authorization."
Key provisions of the CFAA relevant to carding:
- § 1030(a)(2): Unauthorized access to obtain information (such as card data) is a misdemeanor for a first offense.
- § 1030(a)(4): Access for fraudulent purposes (use of stolen data for transactions).
- § 1030(a)(5): Damage to a computer (e.g., DDoS to distract carding).
- Aggravating factors: If damages are >$5,000, affect >10 computers, or involve theft of medical/financial data, it is a felony.
Criminal and civil consequences:
- Imprisonment:
- First offense: 1-5 years (misdemeanor/felony).
- With aggravating circumstances (financial damage, repeat offense): 10–20 years. Maximum life imprisonment if related to terrorism.
- Example: In United States v. Valle (2015), a hacker who stole 100,000 card details received 6 years under the CFAA + wire fraud.
- Fines: Up to $250,000 for individuals; up to $500,000 for companies plus damages. The FTC (Federal Trade Commission) recorded 1.1 million cases of identity theft related to carding in 2023, with total losses of $8.8 billion.
- Civil Lawsuits: Victims (banks like Visa/Mastercard) can seek treble damages under the CFAA. In 2022, Target paid $18.5 million in a class action lawsuit following a 2013 breach (carding attack).
- Additional federal laws:
- Wire Fraud (18 USC § 1343): Internet/telephone fraud—up to 20 years (30 years if the victim is a bank). Example: Operation Open Market (2012)—arrest of 24 carders, total sentence of 100+ years.
- Identity Theft and Assumption Deterrence Act (18 USC § 1028): Identity theft – up to 15 years + $250,000.
- Bank Fraud (18 USC § 1344): Direct fraud against banks - up to 30 years.
- State laws: In New York (Penal Law § 156) - up to 7 years; in California (Penal Code § 502) - fines up to $10,000 + jail time.
- Investigations and enforcement: The FBI, Secret Service, and DHS (Homeland Security) conduct operations (e.g., 2024: 13 arrested in "Operation Carding Crackdown"). Extraterritoriality: The US even prosecutes foreign carders if the damage is in the US (through extradition under the MLAT).
Educational Insight: Why is the CFAA effective against carding?
The CFAA is the US "anti-hacking standard," but it has been criticized for its broadness (Van Buren v. United States, 2021: the Supreme Court narrowed "exceeding authorization" to literal unauthorized access). In the context of carding, it is combined with evidence (transaction logs, IP addresses), making prosecution a powerful tool of deterrence.
2. Carding in the Context of the European GDPR: Focus on Data Protection and Business Responsibility
The General Data Protection Regulation (GDPR, Regulation (EU) 2016/679) is not a criminal code, but a personal data protection regulation that came into force in 2018. It applies to all companies processing the data of EU residents (even if the company is outside the EU). Under the GDPR, carding is a "data breach" under Article 4(12): the leakage of confidential information (card data = personal data). The GDPR does not directly punish hackers, but focuses on
the liability of controllers and processors (banks, retailers) for inadequate protection.
Key GDPR provisions relevant to carding:
- Art. 5(1)(f): Principle of integrity and confidentiality – data must be protected.
- Art. 32: Obligation to implement security measures (encryption, multi-factor authentication).
- Art. 33–34: Notification of a breach to the DPA (Data Protection Authority) within 72 hours and to victims within 30 days if the risk is high.
- Art. 82: Right of victims to compensation for damages.
Administrative and civil consequences:
- Fines for companies:
- Minor violations: up to €10 million or 2% of global turnover.
- Severe breaches (including carding breaches): up to €20 million or 4% of turnover. Record: Meta — €1.2 billion (2023) for data transfer; British Airways — €22 million (2020) for a breach that allowed the theft of 400,000 cards.
- In 2023, the EDPB recorded more than 1,200 fines worth €2.7 billion, many for data breaches.
- Criminal consequences: The GDPR does not provide for these directly; they are delegated to national laws. For example:
- In Germany (StGB § 202a): Unlawful access – up to 3 years; § 42a BDSG – up to 5 years for violation of the GDPR.
- In France (Loi Godfrain): Up to 5 years + €300,000.
- Directive 2013/40/EU (cybercrime): Harmonizes criminal penalties for hacking – 2–5 years on average.
- Civil claims: Victims can seek compensation through the courts (Article 82). Example: After the Yahoo breach (2014, theft of 3 billion accounts, including cards) – €300 million in claims in the EU.
- Investigations: National data protection authorities (e.g., CNIL in France, ICO in the UK) + Europol (Operation Europol Carding, 2022: 50+ arrests). Extraterritoriality: GDPR applies globally (Google was fined €50 million in 2019).
Educational Insight: Why is GDPR Different?
The GDPR is a preventative measure: it forces companies to invest in cybersecurity (DPIAs – Data Protection Impact Assessments), mitigating the risks of data fraud. Unlike the US, the focus is on "systemic liability" rather than individual responsibility. The potential damage from data breaches in the EU is €1.8 trillion (ENISA, 2023).
3. Comparison of CFAA (US) and GDPR (EU): Table and Analysis of Differences
| Aspect | CFAA (USA) | GDPR (EU) |
|---|
| The main goal | Criminalization of unauthorized access and fraud (focus on the hacker). | Protection of personal data through business responsibility (breach prevention). |
| Type of liability | Criminal (individual) + civil. | Administrative/civil (companies) + criminal (national laws). |
| Carding penalties | Prison 1-20 years; fines $250k+; personal. Example: 10 years for $1M in damages. | Fines of €20M/4% of turnover; 2–5 years in prison (national). Example: €22M for BA. |
| Application to hackers | Direct: felonies for access/theft. FBI investigations. | Indirect: through directives; Europol focuses on networks. |
| Application to companies | Indirect: claims for damages. | Direct: Penalties for weak security (e.g. no card encryption). |
| Jurisdiction | Federal + state; extraterritorial for US systems. | Cross-border within the EU/EEA; extraterritorially for EU data. |
| Victims' rights | Compensation through court; FTC monitoring. | Right to notice + compensation (Art. 82); class actions. |
| Efficiency | High for arrests (Operation Card Shop: 80+ arrests). Criticism: overbroad. | High for deterrence businesses (fines have increased 300% since 2018). Less uniform for criminal cases. |
| Examples of cases | US v. Mitnick (1999: 5 years for CFAA hacking, including carding). | Equifax fine (€4M, 2020: breach of 147M records, card data leaked). |
Key differences in approach:
- Philosophy: The US is reactive (punish the criminal after the fact), the EU is proactive (force companies to prevent). The CFAA is like a "cop," the GDPR is like a "whip" for business.
- Scope: The CFAA covers all computer crimes, while the GDPR only covers data. In global carding (for example, Russian carders attack US/EU banks), both apply: the US uses the CFAA for extradition, and the EU uses the GDPR for fines against victim banks.
- Evolution: CFAA updated for AI threats (2024); GDPR – NIS2 Directive (2022) strengthens cybersecurity.
Conclusion: Lessons for Education and Prevention
Carding is a global threat, but the US (CFAA) cracks down hard on individuals, minimizing repeat offenses, while the EU (GDPR) is building an "ecosystem of trust" through fines and raising security standards (e.g., PCI DSS compliance). For students/professionals: Study these laws for cybersecurity ethics — carding not only ruins lives but also undermines the economy (global damages $30 billion/year, according to the Nilson Report 2023). I recommend the following resources: FTC.gov for the US, edpb.europa.eu for the EU. If you need clarification on specific cases, please ask!
