THE RISE OF CREDIT CARD FRAUD

THE RISE OF CREDIT CARD FRAUD
Every month, our Treasury department emails us a list of all credit card chargebacks for the previous month. I used to ignore this report as I didn’t understand the implications of each chargeback. Once I realized that my company was essentially paying for criminals to go on shopping sprees, it forced me to change my tactics when it came to investigating credit card fraud. 
Historically, the only times I would investigate credit card fraud would be when a customer would contact one of my stores to report a bogus charge. I would find the transaction, save the video and turn it over to law enforcement. My job would be done. Not very proactive and I’d go back to my normal routine. It wasn’t until our VP of Treasury held a conference call on this subject that I fully understood the financial impacts of these transactions. I always assumed that the banks absorbed the losses, but I was dead wrong. These were passed directly on to our company and it was impacting our bottom line significantly. 
We (the investigative arm of our company) began changing our approach about 2 years ago. We now fully investigate credit card fraud and try to bring the culprits to justice as much as possible. That has led us to develop key relationships with members of local and federal law enforcement agencies. In fact, we recently helped bust a significant ring that had stolen the identities of thousands of hard working Americans and swindled my company out of nearly 5 million dollars. 
It started by us reviewing a rash of high dollar chargebacks around a certain area of the country. From there, we drilled down further, to the transaction level and saw that all the purchases were for the same items, pre-paid Visa gift cards. If you ever want to launder money… that’s the way to do it. Once funds are placed on those gift cards, they are pretty much untraceable and unstoppable. Visa also doesn’t help much with tracking the cards once they are used either… A little more investigating and we see the same group of about 20 making these purchases. Very organized and very disciplined. They would target a dozen or so stores all at once, almost in unison. It’s very different from one or two boosters traveling down the interstate. 
This went on for months, without a lead. We would have no warning and we were not able to track their movements. Out of nowhere, on seemingly random days, we would get hit and they would disappear into the wind just as quickly as they appeared. It was equally frustrating when we’d turn it over to local police; they really lacked the resources to fully investigate, so we were stuck. Until the group began to get greedy. 
They changed their tactics after a few close calls and simply began withdrawing money from the ATM’s outside of our store. Easy cash, which they would then use to purchase the prepaid gift cards. What they didn’t realize is that those ATMs are secured by the FDIC, making their crimes a federal offense. This caught the attention of the local FBI field office, which was more than happy to take what we had on this group, which eventually led to their takedown. 
Need information on Credit Card Fraud? Give us a call at 1.770.426.0547 now. 

Every month, our Treasury department emails us a list of all credit card chargebacks for the previous month. I used to ignore this report as I didn’t understand the implications of each chargeback. Once I realized that my company was essentially paying for criminals to go on shopping sprees, it forced me to change my tactics when it came to investigating credit card fraud. 

 

Historically, the only times I would investigate credit card fraud would be when a customer would contact one of my stores to report a bogus charge. I would find the transaction, save the video and turn it over to law enforcement. My job would be done. Not very proactive and I’d go back to my normal routine. It wasn’t until our VP of Treasury held a conference call on this subject that I fully understood the financial impacts of these transactions. I always assumed that the banks absorbed the losses, but I was dead wrong. These were passed directly on to our company and it was impacting our bottom line significantly. 

 

We (the investigative arm of our company) began changing our approach about 2 years ago. We now fully investigate credit card fraud and try to bring the culprits to justice as much as possible. That has led us to develop key relationships with members of local and federal law enforcement agencies. In fact, we recently helped bust a significant ring that had stolen the identities of thousands of hard working Americans and swindled my company out of nearly 5 million dollars. 

 

It started by us reviewing a rash of high dollar chargebacks around a certain area of the country. From there, we drilled down further, to the transaction level and saw that all the purchases were for the same items, pre-paid Visa gift cards. If you ever want to launder money… that’s the way to do it. Once funds are placed on those gift cards, they are pretty much untraceable and unstoppable. Visa also doesn’t help much with tracking the cards once they are used either… A little more investigating and we see the same group of about 20 making these purchases. Very organized and very disciplined. They would target a dozen or so stores all at once, almost in unison. It’s very different from one or two boosters traveling down the interstate. 

 

 This went on for months, without a lead. We would have no warning and we were not able to track their movements. Out of nowhere, on seemingly random days, we would get hit and they would disappear into the wind just as quickly as they appeared. It was equally frustrating when we’d turn it over to local police; they really lacked the resources to fully investigate, so we were stuck. Until the group began to get greedy. 

 

They changed their tactics after a few close calls and simply began withdrawing money from the ATM’s outside of our store. Easy cash, which they would then use to purchase the prepaid gift cards. What they didn’t realize is that those ATMs are secured by the FDIC, making their crimes a federal offense. This caught the attention of the local FBI field office, which was more than happy to take what we had on this group, which eventually led to their takedown. 

Need information on Credit Card Fraud? Give us a call at 1.770.426.0547 now.