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The Dark Underbelly of ID Theft and CC Fraud

Posted By Jim On 06/24/2005 @ 9:51 am In Credit,Government,Personal Finance | No Comments

There’s an incredibly insightful article on the NY Times website [3] (login required, us BugMeNot [4]) about the black market of stolen identities and credit card information. The article talks about two prominent black market forums, both accessible online to anyone who is willing to register for the forums, called Carders Portal (http://carderportal.org/) and the International Association for the Advancement of Criminal Activity (http://iaaca.com/). On these boards you can buy “cobs,” changes of billings, where they change the address to one of your choosing. For $50 you can score a Discover card, for $85 you can get an AMEX…

The article really opens your eyes to the dark underbelly of ID theft and how it’s huge business for these thieves. There are even more “services” being offered:

Phishing Contracts:
You can get a contract with someone to send out millions of phishing emails that could yield a few thousand “identities,” account numbers, addresses, phone numbers, passwords, etc. The article talks about how the information in some of these lists is so detailed it obviously came from a credit report. To get one identity? One thief profiled was asking for $200 per account with a balance over $10,000 with a minimum order of five! If you want a dump with online access, you will pay 5% of the available credit.

This refers to buying the algorithm used by the credit card companies to code the black magnetic strip on the back of cards, thus you will be able to create your own cards… which leads to the next item.

You can purchase blank credit cards that you can then encode with bogus information and use. Or, you can pay someone to do a “cash out.”

“Cash Outs”
You can pay someone to take your bogus encoded credit cards to an ATM and withdraw money until the account is spent. The price for this is high since it’s a much higher risk, the article says 50% or more!

The article then goes on to talk about how the thieves are targeting aggregators instead of the cardholder themselves as well as how law enforcement is losing the battle. It’s scary stuff…

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[3] article on the NY Times website: http://www.nytimes.com/2005/06/21/technology/21data.html?incamp=article_popular_2

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