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$500,000 credit card scam in Providence, four held

May 7th, 2009

More than 50 customers of Citibank and Bank of America may have been victims of credit card fraud worth $500,000, it is reported that three men and a women fraudulently gained access to these customers credit card accounts.

As per the 32-count indictment of the federal government, which was unsealed on Wednesday, Eric Snead, 32, Kenneth Muniz, 21, Harry Gonzalez, 43 and Norma Danzot,40 all belonging to Providence and acting in collusion to cause Citibank to loose $200,000 and Bank of America $300,000.

The four accused used duplicate credit cards for obtaining cash, traveler’s checks and merchandise at local casinos in Nevada, New Jersey and Connecticut, as per the charges Snead would gather information of names, birthdates, addresses and Social security numbers of the victims, and that information was used for obtaining false temporary drivers license in the victims names.

The bogus licenses had photographs of Snead, Gonzalez, Danzot and Muniz, the charges further allege that the four accused used a number of reasons for getting duplicate credit cards of the victims.

Snead would then obtain credit reports from Internet sites, on getting the key information of the victims, the two banks would then be contacted and informed that the original credit card was lost or damaged and requests for duplicate cards were solicited, instructions on shipping the duplicate card through FedEx or UPS was made.

The other accomplices would then pick up the shipments from the terminals of the shipping companies, the indictment charged all four defendants for conspiracy to commit identity theft, the three of the four accused were charged with 11 counts that included unauthorized use of access devices, in addition Snead and Gonzalez were further charged with 9 counts of identification document forgery.

If found guilty, they could face a number of years in prison, Snead however will have to face the stiffest sentence of 15 years, for acquiring the document making implement (credit card), the Secret Service was assisted in the investigation by the state police and the Providence police.

Credit Card Fraud Protection

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Online Travel Agency - the latest victim of Credit Card Fraud

April 24th, 2009

Bernardo Reyes is an owner of an online travel agency in Bigues i Riells, a town located 40 kms away from Barcelona. The travel agency owned by Bernardo is very popular with tourist visiting Spain; most of the visitors to his website are from the neighboring countries like France, Germany, Netherlands, United Kingdom, many from the United States also use his online portal for travel bookings.

Bernardo has been successfully running the online travel agency for more than eight years now, the tourist also use the website for hotel reservations and for inland road travel within Spain. The peak season for tourist begins early in March, and the website earns most of its revenue during this period.

On 14th of March 2009, a customer made an online reservation for travel from Las Vegas to New Jersey, New Jersey to Madrid, Madrid to Barcelona and back, besides airline reservations discounted hotel bookings within Spain were also made by the online customer, the entire itinerary was planned for 14 days and the total cost was $ 4,865.

The entire costs for the trip was paid using an American Express Card by the customer, Bernardo was delighted because higher the value of bookings more the commissions, the average billing amount of  most of the customers visiting the website was under $ 1000, and this one was different.

It was business as usual for Bernardo; but three weeks later a phone call from his bank made him feel disgusted, the bank informed him that they were reversing the credit of  $ 4,865 given earlier, the reason given was  because the owner of the credit card had disputed the charges after receiving a  monthly statement from the credit card company.

The credit card owner was a businessman and a resident of Dallas, his contention was that he has never traveled in the past eight months, and someone had used his credit card fraudulently, on investigations it was found that the geographical location of the person who made the online reservation on Bernardo’s website was in Lithuania, Eastern Europe.

Bernardo was aghast and furious, ever since the inception of his online travel agency this was a first time a fraudulent credit card was used, and there was little he could do about it, the online travel website did not have the services of a company that offered online security to e-commerce websites for credit card fraud prevention.

The services offered by the credit card fraud protection companies include a link provided by them, through which credit cards used on a merchant’s website are screened and verified for their authenticity before a payment gateway processes them, this is done indiscreetly without the customer knowing it.

In this case, if Bernardo’s website was under the protection of a security providing company, he would have received an alert cautioning him about the geo-location of the fraudster, the transaction would be flagged for a manual review of the authenticity of the credit card; the service providers can detect fraud before they happen.

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Credit Card information of Symantec customers ‘traded’ Subscription renewals cost customers dearly

March 26th, 2009

An investigative operation undertaken by BBC has unearthed a credit card scam in which Symantec customers could have been victims of credit card fraud.

A reporter from BBC masquerading as a fraudster bought allegedly stolen credit cards from a person in New Delhi, the cards which were valid, belonged to three UK residents. All three of them had used the cards online to pay Symantec for subscriptions of anti-virus software.

The team from BBC received a tip-off from a source that arranged the trade-off at a New Delhi coffee shop; the entire sequence was indiscreetly filmed by the team which showed how hundreds of plastic cards could be bought for $10 a piece.

The BBC reporters contracted to buy 50 of the cards, 14 of which were ‘traded’ at the meeting and the rest were to be sent by email. The unscrupulous vendor claimed that these credit card details were sold to him by call center employees who handled telephone bills and mobile phone sales of overseas clients.

The reporters said that the name and address details of the card holders that were sold to them were valid, however there appeared to be a mismatch in the digits in many of them, but one out of every seven of the card details given by the person were active and in use in UK.

The BBC reporters called the owners of the cards and alerted them of the fraud, three of the owners it appeared, had bought Norton anti-virus subscriptions within hours of each other.

As per the latest statistics published by the banking industry association APACS, credit card fraud losses touched £609.9 million in 2008 with card-not-present frauds accounting for £328.4 million, a rise from the £290.5 million reported in 2007.

Most of these stolen credit card details are then used by organized gangs on merchant websites on the internet, and unless urgent security measures for credit card fraud prevention are not in place on merchant websites, the online fraudsters will have a field day siphoning of resources from gullible unsuspecting merchants who will be victims of chargeback’s and long expensive legal proceedings.

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Police study indicates a rise in credit card fraud in Dubai

March 21st, 2009

UAE A Dubai police report indicates that over 300 white collar crimes related mainly to financial frauds were committed in 2008, charge sheets were filed  against 600 people for these offences.

According to Lt.Col. Abdul Rahman Al Nuaimi who is a Director of Dubai Police’s Counter Economic Crimes Department, 602 people of different nationalities were charged in 322 cases of finance related fraud.

There were 32 cases of similar offences reported in January 2009 and another 30 in February 2009 and 103 people have been charged in the past two months, the economic crimes have been classified into three divisions namely combating fraud, combating deception and fraud and combating forgery.

The Criminal Investigative Department (CID) arrested a four member gang which was involved in counterfeiting cards and using them to buy high value products such as jewellery and watches.

In yet another case more than 500 forged credit cards were recovered from two gangs, which were using them to draw large amounts of money from ATMs, three other gang members  were arrested for being in possession of stolen expensive goods, money and fake identity cards.

Equipment used to forge credit cards, such as memory cards and laptops along with 146 blank credit cards were seized by the police.

The Dubai Police’s Deputy Commandant General has asked the banks to issue credit cards with pin codes, which can help prevent fraudulent transaction, which has over the past year doubled.

He also stated that in most of the cases the stolen credit cards were used before the owners reported the loss or theft of the credit card; the gangs also used a skimmer machine to copy the information available on a credit card, delivery boys of courier companies steal the credit cards meant and re-sell them to the gangs involved  credit card fraud.

The Deputy Commandant went on to say that Asians and Africans were mainly involved in most of the cases reported in 2008, including those involving counterfeiting currency or deceiving people in currency doubling rackets.

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Sensitizing E-Commerce Marts susceptible to credit card fraud

March 12th, 2009

Credit card fraud is taking its toll on the growth of e-commerce web stores; in fact many stores are discontinuing online payment processing, especially in countries like Canada, where many merchant stores have resorted to asking their customers to fill out order forms with payment options through money transfer or check or order the products on the telephone.

Many of the e-commerce stores that have been victims of credit card frauds such as a retailer like TigerDirect, which handles 20,000 to 40,000 transactions every day, but had no functional back office security that would have probed and checked the authenticity of credit cards used by the customers.

If these internet businesses had taken extra precautions, and utilized the services of a security provider  many of the credit card scams could have been prevented, and revenue lost on account of charge backs could have been saved, better late than never let us examine what are the services rendered by these security experts, and how relevant they are to e-commerce.

An agency that functions alongside a merchant’s web site, but unknown to a customer provides services for credit card fraud prevention to:

Check a Geolocation of an IP address:

It helps in tracking a geographical location from where the transaction has originated, a Geolocation technology will block transactions from locations known for fraudulent practices, some countries in Eastern Europe or Nigeria for example.

Check the IP address country with the billing address country:

As we all know that an IP address is a unique network identifier assigned by an Internet Service Provider to a user logged in to the internet, and if the IP address is different than the billing address, the security service company can flag the transaction and prompt the online merchant for a manual review of the transaction.

Check the email address entered by a customer:

Potential fraudsters generally use free email accounts which are anonymous and are difficult to track, however a security provider can track the geographical location, aided by other resources that includes identifying the Internet Service Provider of the customer, based on the findings the merchant will be prompted to review the transaction.

Check the veracity of a server:

A fictitious proxy server conceals the IP address of an Internet user; a security service providing company has an updated list of fictitious proxy servers and can quickly identify this and forewarn the merchant about it.

Check the shipping address of the customer:

The shipping address verification indicates if the address mentioned by the customer is a public P.O.Box, a private mail box or a temporary forwarding address entered for the delivery of the merchandise as a one-time arrangement. An alert will be sent to a merchant if the shipping address does not meet the criteria.

Check to see if the telephone number indicated is located in the zip code entered:
If there is a miss-match between the two, the security providing company will identify it and accord it a higher fraud score.

Check if the Credit Card issuing country is the same as the one mentioned in the billing address:

If the countries mentioned are different then higher fraud scores will be accorded by the company hired as a security provider.

Check the authenticity of the credit card:
A merchant will be prompted by the security agency to telephone the credit card issuing company and verify the genuineness of the card if it is found to be doubtful.

A merchant web site can hire the services of MerchantRMS it has the requisite screening processes for credit card fraud prevention and recurring charge backs.

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