A group of thieves used a very simple principle in its quest to riches. You are less likely to get caught by stealing a million dollars one dollar at a time than stealing the one million dollars all at once. So the crooks devised a way to charge either $9 or 20 cents on over a million credit cards and walked away with a cool $10 million. Bank accounts were set up in countries like Lithuania, Estonia, Latvia, Bulgaria, Cyprus, and Kyrgyzstan, where the monies were deposited. Thus far, the FTC has only been able to retrieve about $100,000 of the stolen credit card funds.

A recent article states:

The identity of defendants has not been discovered; it may have been only a single “John Doe.” All the F.T.C. says it currently knows are the names of shell companies.

Most of the fraudulent charges that appeared on victims’ statements were for $9, but at different times, charges of just 20 cents were favored, Mr. Wernikoff said. Maybe the scammers should have stuck with $9: “There were more complaints about the 20-cent charges because they looked really odd,” he said.

When the complaints eventually piled up, the trade commission began investigating.

According to the suit, the scammers used more than 100 names for their merchant accounts, names that might have looked vaguely familiar. If you tried to call the toll-free number that was listed, you would not have reached a human being. But the amount in question was so small that you might have shrugged when you failed to receive a call back after leaving a message.

CREDIT card companies do not make it easy for consumers to recognize fishy charges. The monthly statements’ description of each transaction — the “merchant descriptor”— is frustratingly brief. Consumers may regard some charges suspiciously, but they soon learn that being overzealous, reporting legitimate transactions at unrecognized merchants, wastes time and brings a measure of embarrassment.

Apparently the identification of businesses that make charges to your account is limited to either 26 to 28 letters. Which is odd given the ability to program the software for more letters to provide an adequate description of the company. Makes one wonder what the credit card companies are trying to hide.

Comments welcome.

Source – NY Times