An online credit card scam that stole millions of dollars, pennies at a time, was halted by the U.S. Federal Trade Commission. The online credit card scam used fake companies and identity theft to steal small amounts of money that went undetected by consumers or fraud detectors. Over the last four years, a lot more than a million individuals were charged from 25 cents to $ 9 on their credit cards in an online scam that added up to more than $ 10 million.
Victims didn’t even notice
The elaborate online credit card scam went undetected because scammers made very small charges and set up a lot more than 100 bogus companies to process the transactions. It was reported by PC World that U.S. credit card holders financed most of the scam because about 94 percent of all charges went uncontested by the victims of identity theft. FTC reports the scammers charged 1.35 million credit cards a total of $ 9.5 million, but only 78,724 of these fake charges were ever noticed. They would generally make just one charge per card number to fake business names such as Adele Services or Bartelca LLC. Avivah Litan, an analyst with the Gartner research firm who follows bank fraud, told PC World:
“They know that numerous of the fraud detection systems won’t detect anything under $ 10 and they know that consumers won’t complain about a 20 cent fee. What’s different here is the scale, and that they got away with it for so numerous years.”
Credit card fraud and the trends
The online scam is a textbook case about how online services used to facilitate business within the 21st century can be exploited for credit card fraud. As credit cards are getting used more and a lot more for inexpensive purchases–they’re now accepted by soda machines and parking meters–credit card fraud criminals have cashed in on the trend. IDG News Service reports the scammers found loopholes in the credit card processing system that allowed them to set up fake U.S. companies that then ran more than 1 million fake credit card transactions through legitimate credit card processing companies. One of the largest payment processors within the U.S., First Data, was a of the scammers. Of the 116 fake merchant accounts the FTC uncovered, 110 were with First Data. They also set up bogus accounts with Elavon.
Uncertain is the real source of all the identity theft
The FTC seems to think that the defendants may have run credit checks on the identity theft victims to be certain they were creditworthy. The FTC doesn’t know where the scammers obtained the credit card numbers they charged, however they might are purchased from any online carder forums, which are black market Web sites where criminals purchase and sell stolen information.
A textbook online credit card scam
To create the virtual infrastructure for the online credit card scam, it was reported by Webpronews that the scammers set up fake physical addresses and fake web websites pretending to sell products, along with a real company’s tax number found online. Scammers then sent out spam e-mail pretending to recruit American finance managers for some of the offshore financial service companies. Those individuals who were selected by the scammers were persuaded to set up dummy corporations to receive the credit card payments and send the money to bank accounts in Lithuania, Estonia, Latvia, Bulgaria, Cyprus and Kyrgyzstan.
Discover a lot more information here:
PC World
pcworld.com/businesscenter/article/199952/ftc_says_scammers_stole_millions_using_virtual_companies.html
IDG News service
computerworld.com/s/article/9178560/FTC_says_scammers_stole_millions_using_virtual_companies?taxonomyId=17
Webpronews
webpronews.com/topnews/2010/06/28/ftc-cracks-down-on-online-payment-scam
