Credit Card Scams

Credit Card Scams

Credit card scams come in all shapes and sizes, with in-person, phone and online options used by criminals around the world to get our card details.

This diversity in scams means that the biggest credit card threats often change at the flick of a switch, which is why banks, security companies, and the authorities recommend regularly checking for new security alerts.

“Fraudsters will stop at nothing to get your personal information and card data,” Visa says on its Security Sense website.

“Their scams can be clever, but not clever enough if you know how they work and how to avoid them.”

With credit card companies, the government and security firms all keeping track of the latest threats and preventative measures, we have a wide range of resources we can quickly access to check if something is legitimate or illegal. But sometimes credit card scams can be so strange and wrong that they are actually hard to believe.

In fact, 2014 has seen a wide range of scams that really make you wonder about the people behind them – like the prisoners on Jekyll Island who were busted for running a credit card scam in 2013.

So we thought it would be interesting to review some of the most bizarre and shocking scams of the year. From the forced sale scam that cost Apple over $300,000 to the con artists using a child to get credit card details from strangers, the stories below are some of the dodgiest credit card scams we have seen this year.

The “forced sale” scam

In July 2014, a 24-year-old Sharron Laverne Parrish Jr. from Tampa was charged with scamming Apple 42 times and racking up a bill of $309,768. Official documents allege Parrish tricked Apple store staff into accepting override codes when his cards were declined and milked the scheme for all it was worth by going to stores in 16 different states.

As a report in the Tampa Bay Times explains, this scam preyed on a practice known as “forced sale,” “forced post” or “forced code.”

“A credit or debit card gets declined, a customer protest that funds should be available and a merchant calls the card issuer, looking for authorization to proceed,” reporter Patty Ryan writes.

“If the issuer approves, the merchant gets an authorization code, creating a record of the override.”

But there is a problem with this practice: the number is not unique, it only has to have the right amount of digits to work. In a similar case in New Jersey earlier in 2014, the US Attorney’s Office released a public statement that highlighted a flaw in this practice:

“…for technical reasons relating to the forced sale process, it does not actually matter what code the merchant types into the terminal. Any combination of digits will override the denial,” it says.

“So long as the customer provides a fake authorization code and convinces the merchant to enter it into the terminal, the transaction will go through. The merchant is unlikely to discover the fraud until days or weeks later.”

So Parrish was not calling his bank when cards were declined – he was only pretending to call them, then providing a number of his own choosing.

Similarly, the New Jersey woman that highlighted this scam to the US Attorney General’s office racked up over $500,000 in fraudulent purchases before the law caught up with her. At this stage, the override code practice remains the same, but retailers have been warned that they will be liable for any fraudulent purchases made when they force a sale in this way, so more awareness will reduce the chances of this card scam working.

The prisoner card fraud partnership

A couple in Florida netted $20,000 from stolen credit cards by making deposits into prisoner trust fund accounts – while one of them was actually in prison.

According to the Florida Department of Law Enforcement (FDLE), Polk Correctional Institution inmate Ronald Teague was instructing his wife, Tamika Teague, to use stolen credit card information to deposit funds into his and other inmates’ trust fund accounts. He and the other inmates would either use the funds themselves or send the funds out by way of the DOC Check System.

“The pair conducted 115 fraudulent credit card transactions utilizing 25 stolen credit card numbers. As a result, $22,735 in fraudulent funds were deposited into 36 different inmate trust fund accounts,” the FDLE said in a statement in April.

“Ronald Teague personally received $7,000 in fraudulent credit card deposits into his trust fund account and $900 in fraudulent payments to his Securus inmate phone account. During this same time period, Ronald Teague issued $14,900 to Tamika Teague through the DOC Check System.”

Once the ruse was discovered and fully investigated, Tamika Teague was booked into the Orange County Jail on $25,000 bond, while Ronald Teague remained in custody at the Polk Correctional Institution.

The FDLE reports that Attorney General Pam Bondi’s Office of Statewide Prosecution has taken on the case.

The IRS “warrant for your arrest” scam

Imagine getting a call from an official organization telling you that there was a warrant for your arrest. It’s the kind of thing that could scare you into believing its true, and that’s exactly what one scam towards the end of 2014 aimed to do.

The San Diego District Attorney Office sent out a warning at the end of November about a large-scale phone scam where victims are accused of owing taxes to the Internal Revenue Service that must be paid immediately.

The fake IRS callers are even threatening people by saying things like “there is a warrant for your arrest” and “the police are coming now to your residence”. The DA’s Office says the scammers are also persistent in backing up their claims.

“The callers often know partial information about their intended victims, such as the last four digits of their social security numbers,” an official statement says.

“They often call a second time pretending to be the police department, supporting their bogus story of enforcement if money is not paid, and send follow-up bogus e-mails.”

The San Diego District Attorney’s Office reminds people that it is a violation of state law to impersonate a police officer and that money would never be demanded in this way.

The IRS will never request personal or financial information by e-mail, texting or any social media. You should forward scam e-mails to phishing@irs.gov. Don’t open any attachments or click on any links in those e-mails.

The DA website also reminds people that “no deputy or employee of the Sheriff’s Department will ever contact members of the public by telephone to demand money or any other form of payment. If you get this type of call, hang up immediately.”

The “best friend” con artist

This scam saw a woman from Salem befriend people for up to months at a time before stealing from them. The press has called 24-year-old Vicheka Ly a “serial best friend” after finding out she was linked to the stolen credit cards and other possessions of former friends.

“Once she lives with you for awhile she steals and then moves onto the next one,” Taylor Nunes told KATU News.

“She made you feel so guilty, such a bad person for questioning her.”

Nunes says Ly became best friends before the “weasel” conned her out of $13,000. By the time Nunes realized what had happened, it was too late.

According to the Washington County Sheriff’s Office, there are several victims of Ly’s scheme, across different jurisdictions.

“During a search warrant, detectives discovered several credit cards in Ms. Ly’s possession that belonged to other victims,” Sheriff’s Public Information Officer Sergeant Bob Ray said in a statement.

“Detectives discovered there were similar cases in Hillsboro, Portland and Clackamas County where Ms. Ly is suspected of similar criminal behavior. The Hillsboro case reported Ms. Ly as using a stolen friend’s credit card and charging over $7,500 in one day.”

While large-scale credit card fraud victims have the small consolation of knowing that they are not alone and the account breaches came down to chance, this particular con literally took fraud personally.

The con artists using a child to steal credit cards

This scam takes low to new levels, with a couple actually using a child to help steal credit card information. Indiana police say the scam artists – described as a woman in her 20s and a woman in her 40s ­– pose as people in need of help, and use a child to make their pleas for money more urgent.

In an update on the case on November 28, investigators said the scammers had got hundreds of dollars off stolen credit card numbers from at least two victims. The investigators suspect the two con artists have a portable skimming device that is activated when they approach people asking for money.

One of the victims, a woman named Angie Ross from Bargersville, spoke to news website WTHR.com about her decision to help people at a Greenwood gas station.

“I guess I just try to find the best in people and hope I’m doing something if they need it,” she explained, saying she gave $20 to two women when they approached her at a Shell Gas Station at Fry Road and US-31.

“They had a toddler and she looked like she was crying and I’m definitely one to help.”

But a few hours later Ross got a text from her bank saying that there were two charges for $254.95 made to her card, with investigators linking the charges back to the two women.

Police have also said this is not the first time that someone has become a victim of this scam.

“They know of one other victim who this happened to exactly from the same pump at the same gas station and they believe there could be more victims coming forward,” WTHR.com reports.

As far as Ross is concerned, this scam will make her think twice before being charitable in the future, even when there is a child involved.

Conclusion

While a lot of the big headlines around credit card fraud focuses on major data breaches and hacking incidents, scams like the five above can do just as much damage. In some cases, like with the serial best friend or child con, it could even impact on how much we trust the people around us.

So whether you are using your credit card online, over the phone or in person, it is important to remember basic security tips, including:

  • Regularly check your account balance,
  • Never give out your personal details in an email,
  • Checking the phone numbers of anyone that calls you asking for personal information, or calling back on the official number to verify the call,
  • Contacting your bank and the authorities when you think your account may have been compromised.

If you ever feel suspicious about a person or situation, it’s also a good idea to act on it. After all, it is better to be safe than sorry – a point all of the scams above really bring home.

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