Digital Age Fraud
October 13, 2005 8:04 PM   Subscribe

Seen something like this on one of your credit or debit cards recently? 09/25 DIGITAL AGE 888-529-98 CYPRUS, SE $24.99 Join the crowd. You might remember something from earlier in the summer, when CardSystems Solutions reported a security breach that had gone on for months. Or maybe you remember a bit of more recent news, when "a California judge ruled Friday that Visa USA Inc. and MasterCard International Inc. don't have to send individual warnings to thousands of consumers whose personal account information was stolen during a high-tech heist uncovered earlier this year."

My family was hit on three different cards from three different banks in less than a week. Doesn't seem to matter if you ever used the card online or not. Any guesses where "Digital Age" is getting all these valid credit and debit card numbers? Anyone? So, please, check your statements and be prepared to cancel your card immediately if you've been hit, too. Nothing good will come of these criminals being able to make additional charges against your accounts, using different shell companies to hide themselves, continuing to do this sort of thing for years
posted by RKB (27 comments total)
This PSA brought to you by the letters R K and B.
posted by FlamingBore at 8:12 PM on October 13, 2005

oh my.
posted by MillMan at 8:25 PM on October 13, 2005

RKB, thank you. I noticed this charge on my bill, and had no idea what the hell it was.
posted by symphonik at 8:28 PM on October 13, 2005

RKB: Anyone?
posted by R. Mutt at 8:28 PM on October 13, 2005

Did a post just disappear from this thread, or am I nuts?
posted by oflinkey at 8:33 PM on October 13, 2005

I've had such a charge (different name) to one of my debit cards.

$9.95,, 801-487-1342 UT

The card in question was never lost or stolen. It wasn't used online all that much, but it was a little a few years ago.

My credit union gave me the money back when I disputed it, and cancelled the card, but otherwise they were not that interested.

The phone number given was disconnected. For a little while, there was a website up at the address, that purported to be a web design firm. An email to their support address got no response.

There is speculation that Visa and Mastercard computer networks have been penetrated. This has been going on for quite some time. No one has gone to jail.

Ah, the security of the American financial networks is great.
posted by teece at 8:33 PM on October 13, 2005

Seriously though, I know someone who spends 60 minutes a week, every week dealing with an identity theft that happened over 6 years ago. Its endless. Every time he thinks that he has squashed it - through endless letters and phonecalls - a new weed sprouts up.
posted by R. Mutt at 8:47 PM on October 13, 2005

Card Systems is just a general processor, as I understand it. You don't have to have bought anything online for them to have handled your information. They're a processor for normal brick and mortar business as well. Also, I seem to remember reading that they were not supposed to be retaining a database of the numbers that were compromised int he first place.

I work for a credit union, although I don't work directly with the issue of the cards. We notified our members who were on the list and gave them the option as to whether or not they wanted new cards.
posted by JeremyT at 8:51 PM on October 13, 2005

Back in August, I found a charge for $9.95 on my card from somebody named GROUPPHOENIXONE, LLC. Once I looked them up, I found that their business consists of charging credit cards an amount just under $10.00, then pocketing the charges that nobody disputes. It's like spam, but with real money.
posted by faceonmars at 9:03 PM on October 13, 2005

As a merchant I have to say I'm really jaded by the banking industry. I remember several years ago when I had received what was definitely stolen card info (billing address California, shipping address Indonesia, that kind of thing) and thought the issuing banks would be interested in putting watches on the accounts, but no, they weren't interested. That really instilled my faith in the system. Needless to say I've weeded my own personal credit cards to the bare minimum as I don't trust the fuckers.
posted by rolypolyman at 9:16 PM on October 13, 2005

The issuing banks have almost no reason to care.

If you notice the fraud and dispute it, they charge it back to the merchant and lose almost nothing.

If you don't notice the fraud, they take their 2% cut.
posted by I Love Tacos at 9:27 PM on October 13, 2005

FWIW, dont actually cancel the CC account, just get a new card number. Closing the account can damage your credit report. How? Many parts of your FICO score rely on a ratio between total credit and credit available - if you close a card your total credit goes down and the ratio will probably go up, hurting your credit.

I saw it on that Ask Suze show on CNBC. Yea, I guess that channel is good for something, eh?
posted by SirOmega at 10:19 PM on October 13, 2005

christ. I need to keep a closer eye on my credit card. I almost never check my satements.
posted by shmegegge at 10:23 PM on October 13, 2005

The one time I had a stolen number the $39 charge that showed up tracked back to a website dealing in penis enlargement medication. I figured they were probably trying to embarass people into not disputing the charges.
posted by The Cardinal at 10:36 PM on October 13, 2005

I had such a charge on a card I had closed some months prior. The fuckers reopened the account and charged it, never sent me a statement and two years later sent a collection agency after me for $300+ in late fees and annual charges. On a card I had closed years before. I ended up having to pay something just to get them to go away as I was in the middle of trying to get a mortgage.
posted by fshgrl at 11:15 PM on October 13, 2005

I got hit with a similar scam - a $9.95 charge from " 610-579-9414 PA" on my Visa. Do a google search for insofttech and you'll lots of pages detailing the fraud. I got the charge removed, but I never did change the card number... I really need to do that.
posted by letitrain at 11:48 PM on October 13, 2005

Well at 2% at transactions definitely they're interested into having a few million minor transactions that will turn into a boatload of money for them...and if they're discovered they'll just blame the hackers, the way a government blame the terrorists.

Mmhhh time to rewrite a whole lotta laws I guess.
posted by elpapacito at 2:07 AM on October 14, 2005

For what it's worth, merchants who have a lot of charges voided back on them because of fraudulent activity do get some pain. Chargebacks are expensive, and if there are too many then the merchant starts paying higher processing fees for all charges. This system works well to shift the burden of fraud prevention to the individual merchants accepting charges. Online merchants have pretty limited options for fraud prevention though. Of course if you're a deliberately fraudulent merchant, you can apparently merrily pay the chargebacks for awhile, launder the money, and run away. It's outright theft.

Fundamentally the US credit card system is insecure. It hinges on card numbers being secrets. (And expiration, and CCV codes, and billing addresses). But of course you regularly give that exact information to people when buying things.
posted by Nelson at 3:38 AM on October 14, 2005

This article is remarkably informative about this specific fraud incident.
posted by Nelson at 3:41 AM on October 14, 2005

That is a good article, Nelson. For quite some time it was the only place you could find information when doing a search on this for Google News. I'd thought I'd included it with my other links, but looks like I forgot about it. Thanks for the addition.
posted by RKB at 7:37 AM on October 14, 2005

Another victim here - $9.95 to Dlx. LLC, which I had never heard of. There was a phone number in Minnesota which just went to an answering machine during business hours. The only references to it found by Google were people saying "This charge appeared on my account...". For example, this blog entry which quickly attracted many similar tales. I had to replace the card, etc..

There are entire fora about this scam, e.g. here at Broadband Reports.

Of course none of these cases individually can get any law enforcement attention becuase the amounts are small. The aggregate is obviously not small but I guess someone would have to prove that the same perpetrators are behing $5000 worth (the FBI threshold) or something of that sort.

WHat provokes me is that the banks don't care because they don't have to. They can shift the cost to insurance or add it to charges and interest rates for customers.
posted by jam_pony at 7:41 AM on October 14, 2005

I feel like I saw a movie or tv show that had a bit that involved charging people with a billing company name that was something horribly embarassing so people wouldn't contest the charge. Seemed like a genius idea and it has apparently caught on from the sound of things.
posted by shoepal at 9:17 AM on October 14, 2005

$9.99 charges from ESTOREONLINE ROCKLIN, CA seem to be hitting a lot of people, too.
posted by zsazsa at 9:30 AM on October 14, 2005

I feel like I saw a movie - shoepal

Yes. Lock, Stock, And Two Smoking Barrels
Listen to this one then: You open a company called the Arse Tickler's Faggot Fan Club. You take an advert in the back page of some gay mag, advertising the latest in arse-intruding dildos, sell it a bit with, er... I dunno, "does what no other dildo can do until now", latest and greatest in sexual technology. Guaranteed results or money back, all that bollocks.

These dills cost twenty-five each; a snip for all the pleasure they are going to give the recipients. They send a cheque to the company name, nothing offensive, er, Bobbie's Bits or something, for twenty-five. You put these in the bank for two weeks and let them clear. Now this is the clever bit. Then you send back the cheques for twenty-five pounds from the real company name, Arse Tickler's Faggot Fan Club, saying "Sorry, we couldn't get the supply from America, they have sold out".

Now you see how many of the people cash those cheques; not a single soul, because who wants his bank manager to know he tickles arses when he is not paying in cheques!
posted by raedyn at 9:41 AM on October 14, 2005

raedyn, you rule! Danke.
posted by shoepal at 10:51 AM on October 14, 2005

I'm really jaded by the banking industry.
The simplest solution for credit card fraud is the same system already in place with ATM cards, 4digitcode. They know this too...Well at 2% at transactions definitely they're interested into having a few million minor transactions that will turn into a boatload of money for them...and if they're discovered they'll just blame the hackers, the way a government blame the terrorists.

The new scam for thieves is selling gift cards (besides the actual industry itself) that use a stolen bank account by programming your account into it. The money is made by selling the programmed card to the public with cards sell being less than the actual amount on the gift card. The thieves have their money way before any bank transactiond are made here. Also, Joe & Jane Public are happy shoppers not knowing they are part of the scam too.
posted by thomcatspike at 11:18 AM on October 14, 2005

I had a $1200 fraudulent charge the other day on my debit card. It was made at a grocery store in Spain using the number for a card I never lost. That's some expensive wine, I guess.

No wonder I had such an easy time convincing the bank that it was fraud, it was just a good thing I had enough remaining in the account to cover my mortgage.

The interesting thing was going for 10 days without a debit card. Checks aren't really any slower than cards, but I kept noting that a check contains on its face everything needed to commit massive fraud. Account/routing info is all you need to yank money right out of an account. Given that and the hassle of recovering from fraud, I've started using cash a lot more often for small purchases.
posted by Invoke at 1:54 PM on October 14, 2005

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