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MGD
Premium,MVM
join:2002-07-31
Fort Lauderdale, FL
| reply to kooooo
Re: [Credit Card Fraud] fraud: www.prophotosland.com & www.phot
said by kooooo :
Can someone explain to me how this scam makes money? .... To add to what pcdebb  and Doctor Olds posted.
The essence of the scheme is that a considerable percentage of the victims may not catch the charge. It can easily be overlooked when an account has multiple cards that are in frequent use. In some cases a person may think their spouse made the charge, and vice versa.
The amounts of the fraudulent charges vary between $3 and $15 and are below the threshold where many people will actively pursue it. Several victims have reported that when they finally caught on, they went back over prior statements, and found several months worth of charges that went unnoticed.
For those that catch and pursue it, there is always a phone number listed on the line item charge, and also listed on the contact info on the hidden website. When a victim calls, the criminals will issue an immediate credit for the charge, and thus avoid the high chargeback fee. In fact, the banks unwittingly assist the criminals sustain each fraudulent operation by telling the cardholder to contact the merchant directly, first. That is exactly what the syndicate wants to happen if the victim discovers the charge, and pursues it.
That is why it is crucial that a victim report the charge as "fraudulent", and insist that it is classified as such. Besides triggering the card to be replaced, it will also generate a chargeback. It is the increasing chargeback ratio that usually causes the merchant account to be cancelled... eventually. Some of these individual sites have been in operation for well over a year. I have seen some that went down in a few months, it all depends on the mix of victims. If the criminals could issue credits to all the victims who complained then the account may never trigger an alert.
I am aware of one specific instance where the criminals were notified about the growing ratio of chargebacks. They responded that their site was being abused by "criminals" trying to buy items with stolen card data. The account rep's response was that after reviewing their website, they should institute an account enrollment policy where purchasers are required to enroll before being able to complete a transaction. He said that would be a deterrent to keep fraudsters away. The criminals responded that this was an excellent suggestion, thanked him, and said that they would immediately adopt that new procedure.
Copies of the criminals handbook/operational manual published in the other thread, show that the merchant account application for each fake site lists an anticipated mpnthly billing revenue of between $40,000 to $50,000 per site. One recent interception had records showing ~ $180,000 successfully processed in less than 4 months, and included a $20,000 wire transfer in the process of heading out to Cyprus being recalled. There can be a lag time of 30 to 60 days for all charge backs to filter through. A rough estimate is that 35 to 40, or more, sites are fully active at any given time. It is an assembly line process, new sites are being created all the time.
Once an operation is up and running, it is only excessive chargebacks that can bring it down, that, or the duped cyber-mule catching on. Because of the trivial amount, many victims are told by the issuing bank to contact the vendor directly "it is probably a billing error, or a purchase that you do not recognize".
Remember the criminals have perfected this operation over many years. They know exactly where the weak points are in the system and how to capitalize on them. One example of that, was a sting operation where potential roadblocks were created during the set up process, in order to confirm known theories of the operation. One of the fake websites that was already set up awaiting the cyber-mules merchant account approval, had the domain registered in a different state with a victim's card, and listed in their name. The syndicate was told that the merchant account approval was on hold, because Authorize.net had questioned why the related website was registered to someone other than the LLC that was applying for the account. The criminals responded that this could not be a valid reason for the hold up, because they knew that authorize.net nor the bank, never checks to see who owns the domain for the website that the LLC that was applying for the merchant account for.
Also, the criminals have recently began to address the excessive charge back ratio by submitting fake documents to the banks in response to dispute notices. They provide a false log of a user id and password including an IP address that the victim supposedly used to set up the account with. There is at least one recent victim report of the bank reversing and reinstating the fraud charge, upon receipt of those false documents.
MGD
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kooooo
@rogers.com | Amazing post. Thanks for taking the time. | |
Zenith
join:2008-03-12
Danville, IL
1 edit | reply to MGD
I copied your "how it works post" and pasted it into a word document. Hope you don't mind. Would you have a problem with my pasting it on other forums that may be discussing these type scams? | |
Doctor Olds
I Need A Remedy For What's Ailing Me.
Premium,VIP
join:2001-04-19
1970 442 W30
clubs:
| As long as you credit it being authored by MGD and include a link back to the post,,,,,,  I would guess he would not mind, but I am guessing and cannot speak for him.
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What’s the point of owning a supercar if you can’t scare yourself stupid from time to time? | |
Zenith
join:2008-03-12
Danville, IL
| said by Doctor Olds :As long as you credit it being authored by MGD and include a link back to the post,,,,,, I would guess he would not mind, but I am guessing and cannot speak for him. I would credit it to MGD for sure. MGD is doing a good thing and deserves all credit for the impact that's been made against the bad guys. | |
pleekmo
Triptoe Through The Tulips
Premium
join:2001-09-14
Manchester, CT
clubs:
| said by Zenith :said by Doctor Olds :As long as you credit it being authored by MGD and include a link back to the post,,,,,, I would guess he would not mind, but I am guessing and cannot speak for him. I would credit it to MGD for sure. MGD is doing a good thing and deserves all credit for the impact that's been made against the bad guys. I copied and pasted the analysis into my blog but also noted that I'd cribbed it from here and gave links to this thread and another similar one here, as well. Though perhaps I should give a more explicit credit...
--
HCN: Because you deserve a rest!
Proud member of the Free Omelas Liberation Front. | |
K Patterson
Premium,MVM
join:2006-03-12
Columbus, OH | I took the liberty of starting a new topic, hoping that others will add text or links for each of the frauds listed and that it will be stickied.
"The FBI wants you to know:" | |
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