| In this issue of our series on credit card fraud we're | | | | cut, if for no other reason than to make sure he keeps |
| going to dig a little deeper into some facts and figures | | | | his mouth shut. In some cases the money goes to the |
| that will most certainly raise the hair on the back of | | | | merchant and the bank. Yes, there are some crooked |
| your neck. | | | | banks out there, especially overseas in countries that |
| In plain dollars and cents, a single credit card fraud can, | | | | will remain nameless for fear of gun toting gangsters |
| and has, accounted for about forty-million dollars in just | | | | being sent over here to settle a score. |
| one year alone. That translates to about 900,000 | | | | If, however, the fraud IS detected then the money |
| victims in 22 countries. That's a lot of people and a lot | | | | does get repaid to the victim but in most cases less |
| of money and that's just ONE fraud. For those | | | | than the under $50 amount that the banks have to |
| wondering, this particular fraud involved adult web sites, | | | | pay. In other words, the victim doesn't completely |
| but credit card fraud was going on long before the | | | | come away from this unscathed. Many European |
| Internet came to be. | | | | banks won't pay up at all. As for the merchant |
| What IS new is the ability to run this fraud across the | | | | account, they don't want to suffer losses, so many |
| entire world with just a mouse click and attack | | | | times they will simply just close up and reopen under a |
| thousands of people in a very short period of time. | | | | new name. |
| The Internet has simply given a very old scam new | | | | Because the system itself is weak, the thieves |
| legs. It has brutally exposed the security problems with | | | | themselves are rarely caught, and then when they are, |
| our credit card system and takes advantage of these | | | | they rarely get punished to the extent that they should. |
| leaks to the max. | | | | The problem with the system is that is was designed |
| The particular fraud mentioned up top was | | | | for buying physical goods with the card holder being |
| perpetrated by a company called J K Publications. If | | | | physically present. With Internet transactions the |
| you want to read about the details of this fraud you | | | | cardholder no longer has to sign for the transaction, at |
| can do so in the August 1999 issue of Scientific | | | | least not in the usual way, and this makes it way too |
| American. Needless to say, it is some juicy reading. | | | | easy to cheat the system. |
| So just where does the money go when a company | | | | In our next article in this series we'll look more into the |
| or merchant or even individual perpetrates a credit | | | | problems of the system and what victims of fraud can |
| card fraud? Well, if the fraud goes undetected in most | | | | do to help protect themselves, or for that matter |
| cases the money goes to the merchant himself with | | | | prevent themselves from being the victim of credit |
| the middle man, if there is one, usually getting paid a | | | | card fraud. |