Computer Crime Research Center

Fraud Scheme Targets U.S. Merchants

Foreign criminals have been targeting small merchants in the U.S. with a "Credit Master" scheme using Internet, phone and fax orders. The criminals claim to be from a company in the United Kingdom and want to order HP ink jet cartridges, Pentium chips, computer components, auto supplies, or medical equip/supplies. The criminals often fax the order on fake business letterhead and ask the merchant to split the total sale amount among several credit card numbers. Most of the time the credit card numbers will be identical, except for the last 4 digits. In many cases the merchandise is to be shipped to an address in the U.S. although the fake business is located in the United Kingdom. The criminals ask merchants to provide shipment-tracking numbers so they can re-route the shipment.

Merchant liability in a card not present environment: When authorization is obtained on an account number issued to a customer and the account number is used fraudulently, the merchant will be liable. In 99% of cases, if the transaction is on a fraudulently generated account number that has not been issued to a customer, the Issuer may charge the item back even if an authorization is properly obtained. How you can protect your business: The best way for you to protect your business from this fraudulent activity is by not splitting any sale among multiple accounts. Review Internet and phone order procedures! If an order seems too good to be true, it probably is. Visa recommends you be especially aware if: The order is from a business in the United Kingdom The business uses a Yahoo or Hotmail email You have never done business with this company before The order amount is larger than normal You are given multiple credit card numbers to pay for the order You are asked to ship the merchandise to an address in the U.S. for a foreign company
The credit card numbers all start with the same 6 digits, and in some cases the only difference is the last 4 digits of the card numbers


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