Stealing From Banks One Cent at a Time

JRHelgeson writes "In a story strangely reminiscent of Superman 3, a 'hacker' allegedly stole over $50,000 from PayPal, Google Checkout as well as several unnamed online brokerage firms. When opening an online brokering account it is common practice for companies such as E-trade and Schwab to send a tiny payment — ranging from only a few cents to a couple of dollars — to verify that the user has access to the bank account listed. According to the story, the attacker wrote a script that opened thousands of accounts at dozens of these providers. He was arrested not for taking the money, but for using false names in order to get it."

Comments

Superman 3?

[jandrese]

How is this like Superman 3? I thought the point in that movie was to shave off the remainders in interest calculations. This is just a simple case of seeing someone transfer a few cents to your account when you open it and trying to abuse the system. The problem of course is that it's extremely obvious and you'll get caught, just like this guy did.

Re:Superman 3?

[lesinator]

This kind of attack hardly an invention of the movies. The salami attack has been around for a long time.

Re:Superman 3?

[Dachannien]

It's been happening in meatspace for thousands of years (though not so much anymore). People would shave bits off of coins made of precious metals and then smelt and sell the shavings to wind up with more money than they started with. Wikipedia notes that some British silver coins would routinely be milled down to half their original weight as nearly everyone took a little bit off the edge.

Eventually, coins could be made with milled edges, which largely curbed the practice, and today, of course, most coins are made from metals that are worth very little compared to the value of the coin itself.

Re:Superman 3?

[rrkap]

Actually, it's not just the penny anymore due to high commodities prices.

Coin                Melt Value
Penny (current)     $0.005
Penny (pre 1982)    $0.024
Nickel (current)    $0.059
Dime                $0.021
Quarter             $0.053
Golden dollar coin  $0.065

So, the mint is only loosing money on nickels right now, and the pre-1982 pennies are worth melting down.

Re:How did he do it?

[Mark J Tilford]

By closing the accounts before Paypal / Google Checkout could remove the money.

Re:Let's

[tha_mink]

Sign up for a gazillion Paypal accounts, use ONE bank account, and after Paypal deposits the money, withdraw the money and close the account. Tried it. Paypal doesn't allow multiple accounts with the same bank account information.