Posts Tagged ‘credit card fraud’

Who Can Help?

Monday, October 27th, 2008

I recently had the experience of four fraudulent charges appearing on my credit card. I contacted the online merchants where the sales were made and learned of what appears to be a mill for the fraudulent use of credit cards. One merchant where my card had been improperly used to pay for goods determined that the same buyer with the same shipping address had attempted to put through more than 40 charges in the exact same dollar amount within a ten-minute period online. I also, after properly identifying myself as the holder of the credit card that was used to make the purchases, obtained the address to which the goods were to be shipped.

Getting help in dealing with credit card fraud is difficult because unless the purchases improperly charged to your account exceed $2,000, federal law enforcement generally won’t get involved. And with the sheer volume of card misuse, local officials cannot investigate every claim. So with little risk and some reward, incentives exist for credit card fraud to continue. Moreover, since card holders can obtain some protection from the card-issuing bank, they are not terribly motivated to invest much time in pursuing the matter, leaving the fraudsters to go on to victimize someone else.  I recommend a different approach: I obtained the address to which the goods improperly purchased on my credit card were to be shipped from the online vendor. This is the point in the transaction where the user of a stolen credit card has to step out of the shadows; otherwise, if he cannot take possession of the goods he has purchased on someone else’s credit card, it was all for nothing.

The risk for him is that if he has the goods shipped to his real address, that provides a means to identify him as the card thief. But if he has the goods shipped to a phony address, he will likely not receive them. So what is commonly done is that the thief will have the goods shipped to a street that exists, but the numbered address on the street does not. For this to work, he needs an accomplice who works with the shipping company who covers that route to know that any goods shipped to 123 Apple Drive, for example, are to be forwarded to him at another address. Apple Drive must exist within the identified city, state and zip code or else the package delivery service’s software will reject the package and return it to the sender. But if “123 Apple Drive” does not exist, there is a means to use that address to re-route purchased goods.

I discovered that the online merchants where my credit card was improperly used were instructed to ship the purchases to a street that exists within the city of Las Vegas at the correct zip code given, but the street number does not exist. I also discovered that in all four cases, the card thief elected the same delivery service. I wrote a letter with the pertinent information and all the relevant documentation I could obtain to the delivery service and requested that they investigate the matter internally. They replied to me that they would do so. I hope that the delivery service attempts to deliver a package to that phony address to track what happens to it. If more people alerted the delivery services in such instances, we could change the risk-reward equation for those who engage in credit card fraud and reduce the incidence of such abuse.