An international scam stole close to $10 million from debit and credit cards of users in micro payments by taking out at times a penny at a time. The Federal Trade Commission following investigations is cracking down on this wing.
An international cyber gang operated this by setting up money mules to tunnel out the finances from the compromised cards both debit and credit. The FTC placed a kibosh on 15 of these money mules and also shut down accounts used by scammers which were found to be phony ones set up for the crime.
During this crime, these scammers siphoned off the money through micropayments form various credit and debit cards and then funneled the funds to fake organizations made by the scammers. These fraudsters took out money ranging between $0.25 to $9 which went undetected by the software for anti fraud in place and also were not reported by clients who believed the amount to be too insignificant to report. Also these scammers only made withdrawals from every card once.
Starting in 2006, the fraudsters have compromised the security of 1.35 million cards during a period of four years and acquired $9.5 million from their ventures. According to the FTC it has also been found that a very low percent (10) of these charges were reported or contested during this time.
The scam was first reported by IDG News Service which said that the fraudster`s success was mainly due to the fact that they managed to siphon the money into fake organizations spread out which had names resembling those of actual existing organizations. The fact that many of these merchants also seemed to have real tax ID numbers further aided the process, allowing these fake users access to credit card accounts by fooling credit card processors.
These operations were carried out in a planned manner with purchased domain names for companies in the front and virtual offices as well as phone numbers to corroborate information on a superficial level. They also handed out the social security numbers of ID theft victims when asked about company executives Some of the fake names were Adel Services, Mark Siler, Union Green, Image company, Centrum Group to name a few. Once they passed the scrutiny of the credit card processors with all this information they could then access the stolen credit and debit card information.