Online credit card scam stole millions, pennies at a time

An online credit card scam that stole millions of dollars was halted by the U.S. Federal Trade Commission. The online credit card scam used a lot of fake companies to steal small amounts of money that went undetected by consumers or fraud detectors. Over the last four years, more than a million individuals were charged from 25 cents to $ 9 on their credit cards in an online scam that added up to a lot more than $ 10 million.

Source of article: Online credit card scam stole millions, pennies at a time by Personal Money Store

The majority of the scam victims didn't even notice

The elaborate online credit card scam operated undetected because scammers made very small charges and set up a lot more than 100 bogus companies to process the transactions. PC World reports that U.S. credit card holders financed many of the scam because about 94 percent of all charges went uncontested by the victims of identity theft. FTC reports that 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. Typically they made just one charge per card number to one of the 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 the majority 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.”

Trends to search for with credit card fraud

The online scam is a textbook case about how online services used to facilitate business in the 21st century can be exploited for credit card fraud. As credit cards are increasingly getting used for inexpensive purchases–they’re now accepted by things like soda machines and parking meters–credit card fraud criminals have cashed in on the trend. It was reported by IDG News Service that the scammers found loopholes in the credit card processing system that allowed them to set up fake U.S. companies that then ran a lot 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 favorite 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.

Source of identity theft uncertain

The FTC believes the defendants could have run credit checks on the identity theft victims to be certain that they were creditworthy. The FTC doesn’t know where the scammers obtained the credit card numbers they charged, however they might have been purchased from any online carder forums, which are black market Web websites where criminals purchase and sell stolen information.

Credit card scam that is online seems like a textbook case

To create the virtual infrastructure for the online credit card scam, Webpronews teaches us that the scammers set up some fake physical addresses and fake web online 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 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 more about this topic 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