February 2013 Issue

The 'Newsletter on Financial Fraud' from CustomerXPs is your monthly insight into the various new fraud types and methods used by fraudsters globally in the banking space.

This will help you stay abreast of all the latest happenings in the banking fraud space.

International $200 Million Credit Card Fraud Scam Uncovered


Federal agents in four states arrested 13 people today for allegedly creating thousands of phony identities to steal at least $200 million in one of the largest credit card fraud schemes ever charged in the USA

The Method:

The defendants charged in the complaint allegedly fabricated identities to obtain credits cards and doctored credit reports to pump up the spending and borrowing power associated with the cards. They would then borrow or spend as much as they could based on their fraudulently obtained credit history and not repay the debts, looting businesses and financial institutions of more than $200 million in confirmed lossesThe scheme involved a 3 step process:

Step 1 - "Make up" a false identity by creating fraudulent identification documents and a fraudulent credit profile with the major credit bureaus.

Step 2 - "Pump up" the credit of the false identity by providing false information about that identity's creditworthiness to the credit bureaus. Believing the furnished information to be accurate, the credit bureaus would incorporate this material into the false identity's credit report, making it appear that the false identity had excellent credit.

Step 3 - "Run up" large loans using the false identity. The higher the fraudulent credit score, the larger the loans that the defendants could obtain. These loans were never repaid, and the defendants reaped the profits.All the accused have been apprehended by the police and are scheduled to appear in court this month.

Source: FBI

Bank of PdS ATM Fraud Cases Expand


Authorities have finally cracked a case of a Romanian who allegedly "skimmed" money from the debit cards of 200 Bank of Prairie du Sac customers

The Method:

Bandura is alleged to have placed a device on an ATM at the Sentry Food Store in Prairie du Sac to steal the debit card information of its users. Bandura is alleged to be a part of wider ranging fraud network who have so far been responsible for skimming more than $3.3 million from US debit card users.

The complaint against Bandura alleges he used the information from Bank of Prairie du Sac customers to withdraw cash from ATMs in Milwaukee, Racine and Chicago. Many such Romanians have been convicted of ATM "skimming" frauds in multiple countries, possibly because of their country's prior focus on computing and mathematics. Some suspect those skills have been exploited by organized crime rings.

Source: Capital Newspapers

Rs 10 million Siphoned from Bank Account in India


Police in India have launched a massive hunt for 12 people who were involved in siphoning off Rs 10 million from a businessman's bank account in Mumbai. The Method: The hackers cracked the username and password of the current account of a cosmetics company at the bank's branch between 9:15 am and 10 am.

The amount was transferred to 12 different accounts in nationalized and private banks in and outside the city after the hacker impersonated as company director Ankur Korane to gain access into the current account and transfer money through real time gross settlement (RTGS) in 45 minutes.

Ankur Korane, 29, a director in a cosmetic company, suspected something amiss that morning when he received 12 SMSs informing him of debits of Rs 12 lakh, Rs 5 lakh, Rs 15 lakh and other amounts totaling Rs 10 million. The police have been able to arrest one of the accused and are on the lookout for the remaining 11 in the gang.

Source: The Times of India

New Malware Behind Credit Card Fraud


Bankers say that the recent spurt in credit card frauds is possibly caused by new malware Dexter which has been used to commit digital fraud internationally. Dexter is malware, which is of recent origin is termed by payment industry experts as a highly intelligent one as it directly communicates with the command-and-control server and instructs the systems to grab and transmit any credit card data that comes into the machine.

The malware uses the retailers network which are typically not secured since they are used for non-critical data. Use of malware in digital fraud has made it difficult for authorities to nab the fraudsters even when there is coordinated international effort.

This is because the hacker who receives the information from the Malware does not use it himself but sells it anonymously over the net to buyers across the world. Scamsters buy individual information after sampling few card numbers . Once this information is available it can be used to clone cards.

Source: Times of India

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