Online credit card scam stole millions, pennies at a time

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 a lot of fake companies to steal small amounts of money that went undetected by consumers or fraud detectors. Over four years, a lot more than a million individuals were charged anywhere from 25 cents to $ 9 on their credit cards in a scam that added up to be a lot more than $ 10 million.

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

Most scam victims didn’t 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. According to PC World, 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. According to the FTC, 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 typically make just one charge per card number to fake business names like Adele Services or Bartelca LLC. Avivah Litan, an analyst with the Gartner research firm who tries very hard to follow bank fraud, told PC World:

“They know that most 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 also the trends

The online scam is a textbook case about how online services could be used to facilitate business within the 21st century can also be exploited for credit card fraud. As credit cards are increasingly being used for inexpensive purchases–they’re now accepted by 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. First Data was one of the preferred scammers. 110 of the 116 fake merchant accounts the FTC uncovered were with First Data. The scammers also set up bogus accounts with Elavon and BBVA Compass.

Source of identity theft seems uncertain

The FTC believes the defendants could have run credit checks on the identity theft victims to be sure 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 sites 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 reports that the scammers set up 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 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.

More info about this topic at these websites:

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