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Feds Bust a Dark-Web Counterfeit Coupon Kingpin
Sparrowvsrevolution writes: The dark web has become the go-to corner of the Internet to buy drugs, stolen financial data, guns...and counterfeit coupons for Clif bars and condoms? The FBI indicted Beauregard Wattigney yesterday for wire fraud and trademark counterfeiting on digital black market sites Silk Road and Silk Road 2. Wattigney allegedly spoofed coupons for dozens of products and sold collections of them online in exchange for Bitcoin. The FBI accused him of doing $1 million worth of collective damage to the companies he made coupons for, but a fraud consultancy believes the total financial cost of his actions was much higher. Wattigney also offered expensive lessons that taught people how to make their own coupons. "In his tutorials, [he] explained the simple breakdown of barcode creation using the increasingly universal GS1 standard: GS1 codes begin with a 'company prefix' that can be copied from any of the company's products. The next six digits are the 'offer code,' which can be any random number for a counterfeit coupon, followed by the savings amount listed in cents and the required number of item purchases necessary to receive the discount."
Who takes the loss the retailer or the manufacturer?
I love Jesus, except for his foreign policy.
I'm going to make fake coupons that makes the grocery store give me 10 dollars for every item I buy!
Get free satoshi (Bitcoin) and Dogecoins
I remember seeing coupons like this and guides how to produce them circulating on 4chan, atleast half a decade ago. Alot of people were using them to get steep discounts on PS3s as I recall.
0. Along with all the other tracking data, log coupons and reference either loyalty membership or credit/debit card tokens.
1. When take coupon is detected upon redemption to the manufacturer, score the shopper up for coupon fraud.
2. Score reaches threshold, shopper is first denied any coupons (this takes a slight change in rules).
3. Also deny discounts based on loyalty programs (rules changed here).
4. Shoppers find no value in fake coupons, stop going to sites that peddle fakes.
deleting the extra space after periods so i can stay relevant, yeah.
With entirely fabricated coupons, the manufacturer knows which offer codes are legit, and what amounts they should map to. They'll simply reject all counterfeits, and the retailer takes it in the proverbial shorts for the discount. Manufacturers could fix this by sharing all legit coupon codes with retailers (similar to the UPC system), but this would be cumbersome and since there's little benefit to the manufacturers, they don't.
For the second type of counterfeit where it's a fake copy of a legit coupon (you see this a lot with "free item" and deep-discount coupons that are sold by consumer product companies to say, appliance manufacturers or retailers. (i.e. "Buy this overpriced washer and get a six-month supply of Tide Detergent") it all depends on if the manufacturer spots the fake or not... If they do, the retailer eats it; if they don't the manufacturer does. Most of this type of coupons increasingly have security measures like holograms, thermo-sensitive colored ink, etc. to make the job easier on the manufacturer; doesn't help the retailer much though... they'll be able to know that, for instance all P&G coupons have certain security measures, but this won't work for smaller brands.
I actually had a job for a couple of years designing 'advanced' POS system software based on the industry standards. The items that the retailers considered 'advanced' just amazed me. They seemed like basic items to me. That said, it is almost impossible to protect against this until they changed the coupon codes to something like QR codes that they could digitally sign. The current standard was made long time ago and is very limited in the amount of information it can carry.
/ This is a simple standard anyone can google that shows exactly how these bar codes are laid out. I used that myself when implementing that section of code. Why anyone would pay for it is beyond me. At the end of the day, the retailers know there is going to be some fraud on this. They have switched to all of these automated checkout systems to save money on cashiers, who would likely catch this sort of thing, so I don't really feel sorry for them at all. They have made that trade.
That said, there are some safeguards in there. If your coupon total is unusually high, your checkout will lock up and require approval from the person watching up front. So anything outrageous will likely be caught. Also, you better pay with cash, as the transaction is all tied together to your card. Also, don't use a loyalty program. So at the end of the day is all that hassle worth it to maybe save a couple of dollars? Conversely, though, I guess the checkers care less and less every day as they get replaced by machines and probably just hit the 'ok' button most of the time, and the retailers eat it as just cost of doing business.
Myself, I would not suggest it as it is punishable by law. It is worth going to jail to save a relative few dollars off your bill?
I hope this scam works, and that it will mean the death of coupons as an inducement. When I think of the time expended cutting them out, fiddling with them on every shopping trip, and snipe hunts for products we don't usually buy but-there's-a-great coupon-this-week, I will rejoice at the extra time that awaits us in our future. Then consider the time and money expended by retailers and by manufacturers. Wouldn't we save just as much if coupons didn't exist at all? Whenever I'm out shopping by myself, ignoring the whole coupon world when I do price/value analysis, I find I'm saving just as much.
But coupons will persist so long as they keep appealing to the wives of this world.
Well, there goes my weekend.
Have gnu, will travel.
I remember working in a print shop in the 70's (yea, I'm old) and every week we would print 100 pages of expired coupons for a grocery store. The owner would cut them or rip them apart and submit them to the manufacturer. I only found out when I stopped the press and told the owner that we were printing old coupons. He explained the scam.
What with the Internet, you might think that there would be some sort of validation built into the system? Apparently not...
Enjoy life! This is not a dress rehearsal.
I don't get the thought behind coupons being (outside of this) subject to simply photocopying if you want more (illegally, of course). If coupons had individual unique barcodes and a till that "phoned home" cancelling the barcode once it's used, fraud would be almost impossible. The only fraud left would be copying those barcodes before the coupons made it into the customer's hands. Coupons are typically low value enough that's not worth the effort (unlike back when similar fraud would happen with gift cards).
It just makes no sense at all nowadays.
"Beauregard Wattigney" Even a google image search confirms this...
The losses will be passed on to us in the form of higher prices.
The CEO wants their yacht and will not accept a smaller bonus.
I hate those people and their giant binders of coupons. Why? Because if you get stuck behind one in line, they double or triple the wait time.
You should have downloaded MyCleanPC. Before I found MyCleanPC my life was bleak and hopeless, people threw stones at me and pelted me with garbage. I was constantly tortured on the wheel and whenever I went to sleep, flying piranhas would bite my penis. But then I found and installed MyCleanPC and everything was happy and gay! People now cheer me when they cross me on the street instead of unleashing their dogs, and I can make love to beautiful pony unicorn females every night. Oh, MyCleanPC, where have you been all this time?
If you PUT OUT A STANDARD THAT HAS ZERO AUTHENTICATION and expect it to not be abused then you deserve what you get. Now there may be some victims here, but don't go putting the blame on the fraudster(s) or those making the tools. They're only able to do that because of poor business and industry practices. This is how your tax dollars get wasted and why I'm sick and tired of paying for "security" that doesn't serve me.
I own a business and we DO get targeted for high end fraud. Though it's credit card fraud, not coupon fraud. The reality is I'm a victim as the owner of the business. However the blame is not on the fraudster, but the payment card processing industry. Every time there is a merchant who is targeted its "weak security". The problem isn't necessarily the weak security of the merchant, but a broken system the payment card industry doesn't care to fix because they're making money off it.
We take additional steps to authenticate customers and it pisses some customers off. Understandably so. We don't ask you to scan your ID or anything like that. Only authenticate that you have access to the account of the card your using. It's far from perfect, but its the best you can do when all a fraudster needs is a few simple # that are handed out like candy by consumers by design.
Why use MyCleanPC when you can use THE HOSTS FILE. Update YOUR HOSTS FILE and ALL WILL BE WELL forever
I can understand peddling heroin, slaves, nuclear weapons and so forth. But COUPONS! Some things just go beyond the pale.
You should have downloaded MyCleanPC. Before I found MyCleanPC my life was bleak and hopeless, people threw stones at me and pelted me with garbage. I was constantly tortured on the wheel and whenever I went to sleep, flying piranhas would bite my penis. But then I found and installed MyCleanPC and everything was happy and gay! People now cheer me when they cross me on the street instead of unleashing their dogs, and I can make love to beautiful pony unicorn females every night. Oh, MyCleanPC, where have you been all this time?
You win the internet for today good sir!
If you go to prison for coupon fraud, could you get a prison tattoo of a barcode with information encoded to reduce your sentence?
"but a fraud consultancy believes the total financial cost of his actions was much higher"
no sh*t, they want to be hired by the legal team suing the guy
How about getting rid of coupons altogether and just offer the lowest possible price.