How scammers get away with fraud
theguardian.com
theguardian.com
There was an investigative news story on TV about a couple who would order hundreds of thousands of dollars of merchandise over the Internet using stolen credit card numbers and brazenly have it delivered to their own home. The TV crew showed their house brimming top to bottom with boxes and boxes of fraudulently obtained goods that they would resell on eBay. They said no police ever visited them.
In every one of the frauds the couple committed, the merchant would know that he shipped to (for example) 1234 Main St, Minneapolis. The credit card issuer, bank, and defrauded card holder would have the address also. Probably hundreds of police reports were made, or am I assuming too much? If a single policeman actually followed up on one of these "too small" thefts of $100 to $1000 they could have prevented hundreds of thousands of dollars of additional theft.
I imagine that the system breaks down because no one reports the fraud or pushes to get something done, or because the police don't follow up, or both.
When I was younger some teens would water balloon my family's house a few times a week. We called the police when we thought we figured out who it was. They showed up within an hour, had a chat about it then went to the kids' houses who promptly confessed. It was all handled outside the legal system. Later I told a police officer about this story and asked why they were able to give it so much attention so promptly. He said something along the lines of, "it's easier to deter them now while they're still afraid of their parents' wrath."
The main benefit there is that banks are iirc. legislated to provide this to everyone, and because merchants have no risk this way they don't ever have to filter potential customers based on perceived creditworthiness and similar factors.
In the case of eBay seller fraud, eBay absorbs the loss. Report the fraud to them and you'll get your money back.
They don't even bother suggesting that you report it to the police.
Insurance companies might insist on you telling them a crime-report number (I imagine this is quite effective in reducing fraudulent claims of fraud), but eBay don't.
https://en.wikipedia.org/wiki/Broken_windows_theory#Criticis...
Petty theft, especially of bicycles, gets almost no investigation either.
I was incredulous, as of course was he, and I asked to look at his paperwork because, frankly, I didn't believe him.
Often, I have learned, when you hear of things like this in the system, once you look at the paperwork you find out "oh, on top of stealing the bicycle you also pulled a gun on someone" or something of the like that explains things.
Not this time...the guy was a drug addict in his 40's who had a lifetime of petty crap, and I guess the judge was in a shit mood the day of sentencing. Since a porch is attached to a house..an "occupied dwelling" in Florida parlance, this was considered a rather serious crime, thus the 15-year bam!
I guess I'm trying to say...it depends upon several factors how things like this are going to be treated. To be honest, I have a few "friends" in Vegas now that are telling me they are really cracking down on fraud and handing out real time behind relatively minor offenses.
Just carrying a fake ID in Vegas with priors will get you a 2-5 year state-sponsored vacation.
Petty crimes like this ruin otherwise helpful ideas. In my city I've come across a number of Bird scooters that have been vandalized, had the GPS ripped off to presumably steal them for personal use.
If nobody does anything about that, an otherwise great idea that could seriously help people get around more easily and reduce traffic and pollution will simply not work, because we allow some people to get away with being assholes.
I find cars tremendously annoying and dangerous, does that mean I can start smashing them up?
Also, they are not being only vandalized, but stolen, which would imply that the perpetrators do believe the scooters are quite useful, but simply don't want to pay for them.
You're also ignoring that many of the scooters are being stolen not vandalized, or the vandalism is part of the theft (ripping off the GPS unit so the scooter can't be tracked).
Besides nuisance/boon is not a binary switch. Even if the vandals were a handful of angry cranks who were annoyed by the scooters, that doesn't imply that the scooters aren't overall beneficial to the city.
At some point I figured the guy who took mine needed it more than the effort I didn't take to lock it up.
Reasonable, morally normal people don't want anybody sent to prison for stealing a bike. That's a reductive straw man. The issue at hand is that this person had stolen before, had been caught stealing multiple times before, and, despite being told that doing it again would result in a long sentence, still couldn't stop himself from stealing a bike.
This is a pattern of bad behavior, even in response to the threat of dire consequences. That's not normal. And it's not just "stealing a bike." It's the totality of the behavior that's being punished. "Three strikes" laws require three strikes. It's silly to look at any one of those strikes in isolation. The point is that society is saying, "enough is enough."
I live in a country with bad policing and these type of crimes are taken seriously. Like if you use the card for 50-100$ purchases, your next will probably jail time.
Another point: Did the card owner complain? Usually, when a complaint happen multiple parties are involved. The shipper gets a charge back on his account, so he'll actually care to pursue. MasterCard/Visa also pursue these issues as well as the banks involved in these transactions.
tl;dr: probably BS in the US. And from what I read the only countries where you can get away with are Russia, Nigeria, etc...
She called the police and showed all this to them and they basically said that she wasn't a victim of the crime, since she had been made whole by the credit card company and the amount was too small for them to follow up on. So, nothing happened and presumably this person is still out there ripping off other people.
Local cops serve the local community. They're responsible primarily for deterring/investigating crime that most directly affects the local community. So if they have to choose between chasing some bank's $500 and the perp who broke into a someone's garage, they're going to serve the locally registered voter every time. And that's how we want it.
Banks are very good at managing fraud, on the whole. They tend to view it at the level of detection and prevention, not punishment (which is far more expensive). And their techniques work. Total fraud in the credit card industry is actually very low.
The women would have been out $500 if she had not noticed it and because she did, she had to report it to get the money back. Both of those are problems that she had/would of had to suffer through.
Yet another example of how many crimes depend upon a degree or more of separation to escape prosecution and conviction. We are most definitely victims when the recovery cost is borne through the revenue from the interest rate charges.
We should be wondering why doesn't every payment system run 0.1-0.5% overall end-to-end between both user, merchant, and payment system that simultaneously acts as a bank, or perhaps even lower for more decentralized systems. There's very little transparency at all the costs imposed by middlemen within the system.
There is a pictures of such trucks here: https://krebsonsecurity.com/2015/11/gas-theft-gangs-fuel-pum...
> But those rules don’t apply to fuel stations in the United States until October 2017, and a great many stations won’t meet that deadline, said Verifone’s Turner.
I'm not from the US though I visit often. It's the only place I ever use the magnetic stripe on my card. I tend to be able to use the chip when buying groceries, but in most restaurants & coffee shops its mag stripe all the way. Realistically is that going to change any time soon?
The reason EMV isn't enabled at most merchants is its both more expensive than standard swipe transactions, and massively slower unless your Costco & Kroger (who both just got quick chip). 30 seconds of waiting for a card to process, combined with EMV chip read errors due to partial insertion or failing/oxidized contacts (especially common on pinpads that aren't mounted to the table, most often the Pax S300 cause those customers are cheap AF) is a recipe for long lines.
Grocers are leading the EMV transition as they are the most powerful block of merchants when it comes to beating down interchange rates and processing fees, with Walmart repeatedly suing Mastercard, and other large retailers doing the same to the other card vendors. For that small segment, they've been able to beat down Visa & Mastercard on the per kilobyte data transmission fee and on the other BS fees that make processing EMV cards more expensive than magstripe.
It certainly doesn't take 30 seconds of waiting to tap and pay here...
Transaction (be it chip or swipe) is approved in a couple of seconds.
The last couple of years, we've had cards fitted with NFC, too - so if the terminal is compatible, no need to type the PIN code, either - just put the card next to the terminal, done. (This only works for smaller charges - less than $65-ish, methinks - and every now and then you're asked to type your PIN anyway.)
It's really popular now, all my cards and even my credit card come with it, so some people aren't happy about that naturally, although personally I've never had any problems.
Here in the UK pretty much all terminals are always online and so EMV transactions only take a couple of seconds to authorise.
In Europe where EMV was first introduced, offline transaction processing was extremely common because there had been no reason to put terminals online prior to the EMV rollout and merchants did what merchants do and whined about the cost of acquiring telecom, so offline mode was required in Europe.
I have literally never seen a fully offline transaction in the US (in fact, very few US cards even ship the certs necessary to conduct offline transactions), but several of them in Europe and the UK as recently as last year.
Funnily, the best way I found of dealing with it was just wiping the cooper with the (leather) wallet itself. Seems like it's abrasive enough to take out the oxide layer without major issues (and it does not accumulate static)
As for payment speed, it usually doesn't take 30s but now most payments are done with contactless, which is even faster.
While I noticed some chip readers seemed slower than magstripe in the initial wave of rollouts, that no longer appears to be true. I've certainly never seen one take 30 seconds to process; that just sounds absurd. 3-8 seconds seems to be closer to the norm.
Of course, gas stations still haven't adopted them. I've even seen gas stations that have updated their machines with new hardware since the chip machines started to appear, that are clearly still magswipe.
The most bizarre thing I've seen so far in terms of the transition to chip machines is at Wegman's, where the regular cashiers' machines will let you use the chip—but the ones at the café, despite being chip-capable machines, have various stickers on them and an insert in the chip slot saying "SWIPE ONLY". Gotta wonder what piece of rigamarole prevents them using chips there.
The only speedup from Quick Chip is not running issuer scripts. The actual auth process doesn't take much (if any) amount longer than with a swiped transaction. Quick Chip feels significantly faster because you can insert and remove at any time during the transaction, but it doesn't actually do much to speed up the transaction processing. It just makes you feel like the transaction is faster because you aren't sitting there at the end waiting for the terminal.
It's July 2018. So this should be in effect right? right?
> Realistically is that going to change any time soon?
Unlikely. Until the penalties affect consumers/voters en masse, it's highly unlikely to ever change. Even if it did, a few congressional hearings would lull voters enough to not care any longer.
The only hope is that fraud becomes so expensive for the card folks that they actually enforce this themselves. Obviously that hasn't happened for all, but maybe they are making progress?
Grocery stores and big ticket places seem to already have switched.
Though they seem to allow swiping if your chip gets a bad read three times (under the assumption it is broken). That sort of defeats the security.
Like anything in the US, retail businesses frequently prefer doing the opposite of what the world does, and ignore what's the most sensible decision.
I assume that someone who installs a skimmer can still use the card data somewhere that does not have a chip terminal... it is my understanding that the vast majority of fraud in the states is CNP (card not present).
On several occasions, I've had attendants come out to ask a question or two when filling up - my guess is some kind of warning sounds inside if you pump too much fuel in one go from the pumps intended for smaller vehicles.
(One attendant kept looking nervously on the concrete the car was parked on - half expecting to find us standing in rapidly expanding a puddle of diesel...)
(And do the transaction in a shorter timeframe, I don't see why it should take 1 day for it to go through)
I wonder how often it happens that the bank simply keeps the money it froze, either telling nothing to the originating bank, or telling the originating bank that the money has been transferred or withdrawn. For two banks that rarely deal with each and are in different countries, what can the originating bank possibly do other than take whatever the receiving bank says at face value?
Interesting.
I wonder how my cc details were compromised. Was it a skimmer at gas stations? or one of those credit card scanners in Canada (Canadians seems to use PIN number with credit cards) or bcferries.com website.
I am not sure.
It's also a card I've _never_ used in person, and most of my online transactions are through PayPal or Amazon, so no idea how my card details leaked.
Probably your bill at the gas stations was higher than the one for the subway tickets.
You just apply broken window theory to everyone of them.Punish swiftly to discourage bad behavior.
Students who sell their accounts for cash;charge them with conspiracy to commit fraud and money-laundering.
Some of the criminal activities described in the article are kind of chutzpah
Indeed. A vast majority of digital financial crimes in some way rely upon these types of accounts. I really don't understand why I haven't heard of any of these people who sell their accounts to criminals being charged as accessories (before the fact). Perhaps because enforcement is low in general. But I think that a lot of the alleged college students doing this wouldn't risk ruining their future on felony fraud charges for $200 if we started prosecuting some of these people. The mere fact that not all of the money was routed back out and some remained as payment is essentially the smoking gun that they were knowingly involved. Any decent investigator/detective would be able to break these students in 15 minutes once presented with that evidence.
Interesting. In many ways the Americans are far behind (still writing checks, lack of chip and pin) but in this arena they have Europe beat.
ROFL :)
Credit Card security model, with CVV, is so broken, but also so widespread, it is cheaper to cover fraud than change it. Especially if card processors (Visa, MasterCard) can shift damages onto merchants.
As a bank one has other options besides the law, though. Lawyers, private detectives, even deals with gangs. It's not impossible to survive such things and defend against it.
The only thing stopping the bank is the bank itself. Like most organisations a bank is probably barely able to achieve what it makes money with and everything else trailing off into nirvana in an unlimited amount of bureaucracy.
Also when you hear politician A did scandal B. That's actually the team of politician C putting pressure on A.
Or when you hear a German car company having trouble with fulfilling US safety guidelines. That's one or more US car companies trying to fend off a competitor.
The world is a selfish place. But thanks to that competition between different parties even normal people like you and me can gather some info about it.