August 23, 2010
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News: FTC Sues Credit Card Scammers
According to a civil lawsuit that was recently filed in Illinois by the Federal Trade Commission (FTC), ten dollars can add up to millions. Do the math, it’s true. The problem is that it was a debit and credit card scammer that stole ten dollars and under from over a million cardholders with little or no effort. The suit which was filed in a United States District Court for the Northern District of Illinois, states that for over four years thieves charged debit and credit cardholders the unauthorized money and then transferred the money to banks in countries across the globe including countries like Lithuania, Estonia, Latvia, Bulgaria, Kyrgyzstan, and Cyprus. Since the credit card charges were always $10 and under, cardholders were not quick to notice them nor did they want to take the time to contact their lender.
The investigation began a number of months ago after the Federal Trade Commission began receiving complaints of suspicious debit and credit card charges ranging from 20 cents to 9 dollars. As the complaints piled up and the FTC filed a motion to seize the assets of U.S. companies involved in the complaints. At this time, the commission was only able to seize assets in the U.S.; however, expects to be able to do so from the overseas banks as well. The thieves were able to open bank accounts in the U.S. by presenting falsified documents to the bank which showed the company as legitimate. They used the bank accounts to filter the credit card payments through prior to transferring them abroad. Some of the banks fell for the scam, however, Wells Fargo employees were on the ball and after a thorough check of the companies, they discovered the companies were using stolen identities, names, and social security numbers.
Court documents did not identify the credit card thieves who were listed as "John Doe." The FTC has confirmed that they have a list of the names of the bogus companies. Most of the companies were bogus online retailers that pretended to sell electronics and office supplies for investigative purposes only. The companies also used fake addresses that had been purchased from a black market provider.