There was a fascinating story in yesterday's ComputerWorld about the US Federal Trade Commission (FTC) filing a civil lawsuit against a scammer gang that had "set up fake U.S.companies that then ran more than a million phony credit card transactions through legitimate credit card processing companies."
According to the story, the scammers charged anywhere from $0.25 to $9.00 to legitimate credit card numbers that they likely purchased from black market websites trafficking in stolen cards.
The scammers set up some 100 bogus companies that fraudulently charged the credit cards over 1.35 million times for a total of $9.5 million over the course of four years. Only 78,724 of the charges were disputed, the FTC said.
The ComputerWorld story says that scammers know that most credit card fraud detection systems don't bother with fraudulent card charges under $10, and that most people don't seem to question small charges with legitimate sounding company names like Adele Services or Bartelca LLC attached to them.
Unfortunately, criminal charges against the scammers are unlikely, since the FTC believes they operate outside of the US. So the best the FTC can do is play "whack a mole" and try to shut scamming operations down when they do pop up.
Robert N. Charette is a Contributing Editor to IEEE Spectrum and an acknowledged international authority on information technology and systems risk management. A self-described “risk ecologist,” he is interested in the intersections of business, political, technological, and societal risks. Charette is an award-winning author of multiple books and numerous articles on the subjects of risk management, project and program management, innovation, and entrepreneurship. A Life Senior Member of the IEEE, Charette was a recipient of the IEEE Computer Society’s Golden Core Award in 2008.