Thieves Test Stolen Credit Cards on Charities

by Robert McMillan, IDG News Service

Credit card thieves are becoming big-time charity donors, but it's not out of the goodness of their hearts.

According to Symantec Corp. the criminals are starting to use charitable donations as a way to check whether their stolen credit card numbers are working.

Fraudsters have been using a similar technique for years, but until recently they tended to make minor purchases on online retail sites. Now, as these sites have become better at identifying and blocking these transactions, the criminals have begun looking elsewhere, said Zulfikar Ramzan, senior principal researcher with Symantec Corp. "Using a charitable organization as a way to verify a credit card number is a relatively new technique, and it's probably being used by a minority of the more innovative guys," he said.

Credit card numbers are bought and sold in underground "carder" forums, which bring together the people who have stolen the credit card numbers with those who want to use them. These charitable donations are typically made by the person buying the card numbers as a final check to ensure that the numbers will work, Ramzan said.

Last month the Red Cross was forced to return nearly US$7,000 that was donated in the course of 700 fraudulent transactions, said Carrie Martin, a spokeswoman for the American Red Cross. "We routinely see this kind of activity," she said. "We have someone in place who deals with this on a regular basis."

This fraud accounted for a tiny sliver of the Red Cross's $6 billion in revenue last year, but the organization also has to pay staff to stay on top of the fraud, Martin said.

This is not the only time that fraudsters have found ways to misuse charities. In another common scam, the criminal will give the charity a fake check and ask that a portion of it be returned in cash. Though the check will initially clear in the charity's bank account it will eventually be returned. By then, however, the charity will have already paid out to the thieves.

"These kinds of things have hit charities before," said Ramzan "I feel bad because all these charities are trying to do good and you have these fraudsters that try to take advantage of them because of the way they work."

Copyright 2007 PC World Communications, Inc.

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[TELECOM Digest Editor's Note: Despite the many good things the Red Cross does, they _are_ a wee bit disorganized at times. They are busy here in southeast Kansas this past week, plus all of the next month (at least) working with the flood victims of which there are plenty; more here in Independence than I first realized when discussing this matter last week, but Coffeyville and Fredonia, KS got hit much worse than we, as did Miami, and Bartlesville, Oklahoma. And you might have thought they would have learned their lessons with those open-ended debit cards they handed out in New Orleans a year ago and all the fraud at that time by their own employees among others. But apparently they did not since when FEMA and Red Cross made a joint announcement in Sunday's Independence Reporter, Red Cross said they would be using the debit cards again here over the next week or two.

Our city officials recruited everyone in town (not affected by the flood, which was about 95 percent of us, IMO) to work with the flood victims 'however possible'. Apparently the flood was the worst on record for the area. They got me to agree to work in the Southeast Kansas Food Pantry program which will be open daily during the next two weeks handing out food. I am _NOT_ doing this for the sake of the Red Cross, with whom I have my own arguments as discussed here in the past; my agreement was with Marilyn and Jack Gregory, the husband and wife co-partners and co-pastors of the local Methodist Church which has been running the shelter and drinking water supply all of last week and 'for the duration'. I'll be the Food Pantry clerk on the afternoon shift for a couple weeks. PAT]