Creditnet News Story
FTC: Scammers stole millions with credit card system loopholes
Monday, June 28, 2010
By William Davis
The Federal Trade Commission has badly damaged an online scam ring that stole millions from American consumers. Those that perpetrated the thefts are still currently at large.
The scam's operators found loopholes in the processing systems of several major credit card companies, allowing them to set up fake American companies that ran more than a million phony credit card transactions through the companies' systems. According to a report from Computer World, the transactions were made with stolen credit card numbers which were then purchased on the black market.
These transactions were aided by the phony companies charging between 25 cents and $9 per card to more than 100 fake companies. Computer World said that about 94 percent of the charges went uncontested as a consequence. The FTC said the scammers charged 1.35 million cards for a total of $9.5 million, but less than 79,000 of the fake charges were reported.
According to a report from technology news website TechEye, 110 of the 116 bogus companies were set up through First Data, a large merchant processing service. TechEye said this highlights a bit of a problem with the company's vetting process.
| 
Subscribe | |
