Identity Theft Articles

FTC Stops International Crime Resulting in $10 Million Fraudulent Charges on Consumer Credit and Debit Cards

Identity theft scheme highlights need to dispute any unrecognized charges

When most Americans think of identity theft, they may see each crime affecting only one party and destroying their finances and credibility. However, consumers should be aware that fraud and identity theft can happen on a large scale as well. Regardless of the scale of the crime, identity theft is invasive and can put an individual's personal information in jeopardy, leaving them vulnerable for future crimes. The Federal Trade Commission has just obtained a court order to halt a large-scale international scheme that has led to nearly $10 million of unauthorized credit and debit charges.

Criminals used one of the oldest tricks in the book to trick more than one million consumers out of giving up their credit and debit card information. By posing as representatives of legitimate companies, the criminals were able to obtain the consumers' information. They then opened up more than 100 merchant accounts that process credit and debit card payments. Each consumer affected was charged $10 or less, with the payments being routed through dummy corporations in the U.S.

According to the FTC, the highly organized criminals may have also run credit checks on their victims to determine if they were credit-worthy.

The FTC claims that most victims either didn't notice the charges or failed to dispute them because the charges were so small. The charges to their accounts ranged from 20 cents to $10. Consumers that called the toll-free number listed on their bills either received a recorded message or found the number to be disconnected.

"They know that most of the fraud detection systems won't detect anything under $10 and they know that consumers won't complain about a 20 cent fee," Gartner research firm analyst Avivah Litan told ComputerWorld.

The government agency is still investigating exactly how the criminals obtained the victim's identities.

This crime is a reminder to Americans that identity theft does not always occur on a large, noticeable scale. Consumers should become more diligent about reviewing their credit card and bank statements for unrecognized charges. While most may not want to dedicate the time or energy to dispute an unrecognized $2 fee, it may benefit them in the long run by detecting and halting a case of identity theft. In some instances, charging a small amount may be a criminal's practice round to see if he or she can get away with the crime on a larger scale.