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The Economy of Online Crime
hdtv writes "You might call the thugs or thieves, but on their own closed forums and referral-only Web sites, they value honesty and reputation. Fortune magazine looks into the black market for stolen credit card numbers and identities. What's interesting is that so few of the criminals retrieve their information via breaking into online stores." From the article: "Gaffan says these credit card numbers and data are almost never obtained by criminals as a result of legitimate online card use. More often the fraudsters get them through offline credit card number thefts in places like restaurants, when computer tapes are stolen or lost, or using 'pharming' sites, which mimic a genuine bank site and dupe cardholders into entering precious private information. Another source of credit card data are the very common 'phishing' scams, in which an e-mail that looks like it's from a bank prompts someone to hand over personal data."
No kidding. We're seeing an incredible increase in phishing attacks, either in the form of fake pages (and the corresponding spam mails telling you to go there), or in the form of trojans that hook into the browser.
It's interesting. Place a person, a very clever person, master degree in commerce or law, with a Ph.D., people who're worth their 6 digits a year, place them in front of a computer and you will be amazed. Something inside this computer turns the smartest person into a gullible idiot.
Ok, idiot being too hard a word. But it is VERY intriguing to see people who would never ever fall for a con job in real life to fall without even thinking twice for one online.
And I wonder why. What makes an e-mail more credible than snail mail? If they got a mail from their "bank", telling them to send their CC number or other details, they would NEVER do that. Online? No problem.
Why? Why are online scams so much more successful than offline?
We used to have a Bill of Rights. Now, with the rights gone, all we have left is the bill.
What if thoose sites are phishing sites setup by law enforcement to catch phishers ?
What kind of criminal masterminds would fall for their own scams ?!
Wanna fight ? Bend over, stick your head up your ass, and fight for air.
I work at a b&b where we continually get reservations by people wanting to pay with a credit card. Our customers make their bookings over the phone, fax and even e-mail - to process a payment, all we need is the card number and expiry date. When a receipt is printed (from entering the numbers), it actually has the card details on it!
I have seen many people collect their receipts from us upon checkin and just throw them away, without any thought about the information contained. Anyone willing to stick their hand in the bin would be able to collect these numbers for themselves.
I often think a better credit card system would be to have a credit card number and require the use of a temporary code for a transaction to take place (similar to my online banking) where we have an electronic device which has a changing code, of course, this would only be practical for over the phone and website bookings rather than fax/e-mail (although fax/e-mail bookings are insecure now as e-mails may not be deleted from the system and fax's could be just thrown away with the numbers on them).
Excuses Are Like Assholes - Everybody's Got One
Well it's nice to know that my online shopping is safe, it is somewhat scary to know that real life shopping is less secure. Just one more reason to never leave the room.
Philosophy.
Why would they care? Banks never EVER lose a dime on fraud, except for a some labor involved in procesing chargeback requests. ALL fraudulent transactions and chargebacks are immediately deducted from the vendor's account. The customer is fully protected. The banks NEVER take a loss. Only the vendors get farked. Over and over again.
:-(
Yes, I am a vendor with my own merchant account.
Honesty my ass. They're all just being extra careful not to get caught.
Remember that you don't sign the receipt as "authentication", you sign it to indicate you agree to the terms of the credit. That's the only purpose. If a store attempts to verify your signature against the back of the credit card, well, that's sort of bonus, but not required by the credit company.
For reference, see this link
In my own life, I have my daughter sign the credit card bill (and compute the tip, if necessary) and since she's an art student she has been coming up with some pretty creative signature designs.
In fact, I thought 'pharming' referred to genetic manipulation of animals and plants to produce pharmaceutical products. For instance, one might produce a strain of cows that express Viagra in their milk. Of course, they'd be a right bugger to milk...
Tubal-Cain smokes the white owl.
I've been to one of these credit card forums (not as a user, I don't have that kind of moral flexibility) and the thoroughness of these forums is quite amazing. The one I went to in particular required that if you wanted sell something, i.e. CC numbers, fake IDs, card skimming equipment (ATM bezels and strip readers), etc. you first had to provide free samples to the administrators of the forum to verify the quality of your product. If your product was found to be satisfactory, you would be allowed to sell your products, but first you had to put up a certain amount of cash (like $500, iirc) to be held by the administrators -- this cash would be used to refund your customers money in case you didn't deliver your products to them.
I am one of the people who tries to plug the holes, and build the systems that help our agents fix fraud. So I know my way around some of this stuff, and I'd like to clear up a few things.
- I don't know how things were "back in the day", but these days, if a family member racks up a credit card bill without permission, and the cardholder won't press criminal charges and file a police report, the cardholder is stuck with the bill. That said, if a merchant just gets approval from "the cardholder's wife", then it's no wonder the merchant got stuck holding the bill and with a penalty to boot. Both are part of the agreement you signed that allowed you to accept credit cards. You did read that, right? Just askin'.
-Banks are actually very serious about stopping fraud. Not only do banks end up covering a fair amount of the tab because the hoops you have to jump through to get Visa/MC to cover it get harder and harder (and in the world of banking, profits are generated by pennies a transaction, so even $50 of fraud is significant in terms of lost profits), but all the major issuers understand that no one wants to be the next one caught with their security wanting. The bad press associated with lost laptops, wayward tapes and hacked websites is something no one wants - and, in fact, it practically killed CardSystems. We are under major pressure to make sure our bank isn't next - because you do lose a lot of customers from this sort of thing. And reissuing cards to a swath of cardholders is both expensive and time-consuming. The bank I work for hasn't been involved in any of this so far, but we make a point not to brag about it - it just invites trouble.
-You DO sign the receipt as a verification. Signatures are not necessary for certain types of transactions, or for transactions under a certain fairly low limit, but if there is fraud or a dispute, the merchant has to produce the signature. Or they lose the dispute. This is why many merchants now use the CVV2, although, as you can probably infer from the story, it also is not perfect.
-Why the cheap price for high-limit cards? Because actually using them is much riskier than stealing them. Either you need your ill-gotten gains shipped somewhere, or you need to show up somewhere in-person. Or you go for fairly small stuff. In any case, it's a lot more risky than the number theft, and if you steal numbers, you probably sell a batch at a time. With the risk goes the reward, so to speak.
-Phishing, we're working on that too. All the major issuers have places on their websites where you can report phishing activities. Do so, whenever you see it. And the major issuers are also all conducting informational campaigns, trying to teach people what a legitimate communication looks like.
Overall, though, massive card number theft is unusual. Most people lose their information by losing their wallet, being careless with their info (like with phishing), or by a family member/friend up to no good.