A new fraud on the Internet
Date: August 01, 2007Source: courierpostonline.com
In what security experts describe as "cyber money laundering" or "e-fencing," scammers have perfected yet another way to convert stolen data into cash while sitting at a computer.
How it works: Thieves use a stolen credit card number to buy a gift card online, then sell it to the highest bidder at an online auction Web site or for a set discount at a gift-card exchange Web site.
"People have found that purchasing gift cards with stolen credit card information and selling them online is very lucrative," says Joseph LaRocca, vice president of loss prevention at the National Retail Federation.
The ruse helps crooks make use of pilfered credit card numbers before the victim has a chance to deactivate the account. It "extends the life of credit card fraud," says Paul Cogswell, vice president of loss prevention and risk services at Comdata, one of the nation's largest gift card producers and processors.
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