Fraudsters Use Charities To Prep Stolen Credit Cards For Sale

Online credit card fraud may be a cloud with a silver lining, if you're really determined to see it that way.

Internet security company Symantec claims that Internet fraudsters are donating money to charities as a way to check the validity of stolen credit cards prior to resale.

"In the world of carding, where stolen credit card information is bought and sold, carders need to know if the credit cards they are buying or selling can actually be used," explained Yazan Gable, a Symantec Security Response engineer, in a blog post on Friday. "It is sometimes difficult for them to verify this without raising any alarm bells and risking that their cards will be identified as stolen and disabled. As a consequence, a new trend is appearing."

Javier Santoyo, a manager at Symantec Security Response, said that Symantec learned of this trend by monitoring IRC channels specially set up to trade stolen credit card and identity information.

"They go through the steps of validating credit cards before they purchase them," he said. "The advantage of using a charity is it's not a regular purchase, so it may not come up as a flag for the credit card companies."

Lest anyone make the mistake of assuming that credit card thieves secretly harbor hearts of gold, it's worth noting that the windfall of stolen cash going to charities isn't particularly significant. "It's normally just a token amount, anywhere from a penny to $10," he said. "Normally, it's just to verify that the credit card company doesn't have the card on its cancel list."

Santoyo said Symantec doesn't have any figures to indicate how much ill-gotten money had been donated to charities this way. Credit card numbers can be sold online for between $1 and $6 each and those that come with a verification code, billing address, and confirmed available balance can bring up to $300, he said.

Carrie Martin, a spokesperson for the Red Cross, acknowledged that the organization receives unauthorized or fraudulent donations and said that the Red Cross returns the money. "It routinely happens," she said. "I don't know how much of a trend it is. It's also something that we proactively seek out. We have fraud prevention measures in place to keep fraud as small as possible."

According to Martin, the Red Cross detected 700 fraudulent online donations in June, worth about $7000, out of a total of 3600. That's double the number of fraudulent online donations (350) the organization detected in May and more than four times (150) the number detected in April.

Nonetheless, Martin declined to characterize the increase as a trend because some or all of the increase could reflect improved fraud detection methods.