Huge credit card fraud ring busted by feds

Credit card

A massive credit card fraud ring has been busted by the federales after nearly a decade in operation. Photo Credit: Michiel1972/Wikimedia Commons/CC-BY-SA

Federal authorities recently busted up a major credit card fraud ring, involving 18 conspirators who stole at least $200 million, wiring the proceeds to several foreign countries. It’s one of the largest such operations to get caught and credit card fraud continues to be a major  issue worldwide.

Credit card fraud ring operated for almost a decade

Federal authorities recently shut down a major credit card fraud ring, according to USA Today. 18 people were arrested for allegedly participating in the fraud ring, which started operating in 2003. The way it worked is that the alleged perpetrators would create false identities or steal existing identities, create sham businesses and use them to get credit cards.

Eventually, the group had 25,000 credit cards, using more than 7,000 fake identities and 80 sham companies across 28 states to perpetrate the fraud. They would make small purchases, pay them down to build credit ratings and limits, then make large purchases. The fraud ring would buy things like gold, luxury cars and other high-end goods, funneling cash overseas. Cash from the operation went to China, Japan, Pakistan, India, Canada and the United Arab Emirates.

Single largest instance on record

The recently-busted fraud ring is the single largest credit card fraud operation in recent history. The 18 people arrested in conjunction with the crime, located in New York, Pennsylvania, Connecticut and New Jersey, have an international network of accomplices, so the full size of the operation and extent of the damage isn’t known. Early estimates are at least $200 million in credit card company losses.

Granted, that’s a huge operation and good job that it was busted, but it’s just the tip of a really maleficent iceberg.

According to NBC News, credit card fraud was estimated by Javelin Strategy and Research, to have grown 87 percent since the beginning of 2010 just among the top 23 issuers, causing $6 billion in losses during that time. Big banks and major credit card issuers, despite their largesse, are finding it increasingly harder to prevent, though are able to detect it more quickly after the first instance or two of a fraudulently used credit card.

What to do

Prevention is often worth a ton of cure. According to the Federal Trade Commission, one of the first-line defenses against credit card fraud, especially in case of credit card theft, is to safeguard the physical card itself. If a card is lost or stolen, report the loss immediately.

Information regarding one’s card, such as card numbers and so forth, should be kept hidden, such as shredding statements or blacking out sensitive information before throwing them away.

Another good tip is to constantly monitor the account. Check statements thoroughly and promptly and report any suspicious purchases immediately.


USA Today

NBC News


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