Payment Service Companies Cash in on Identity Fraud

Big money is being made through buying and selling stolen creditcard information. There’s an entire market thriving in shady chat roomson public Internet relay chat (IRC) servers. Carders vie for the bestdeals, having to wade through the thousands of lines of advertisements.Large collections of credit card numbers, identities, credit carddumps, bank account credentials and online payment accounts are amongthe many things that are traded by the minute. But it isn’t only thecarders who make money from the sale of this information.

Payment service companies make their commissions on these sales aswell. Every deal involving stolen credit card information has to bepaid for, and payment service companies provide the carders with theability to transfer their money.

But what makes any particular payment service popular amongstcarders? There are a number of factors. Firstly, anonymity isimportant. A carder wants to provide as little personal information aspossible. They don’t want to have to give their personal or bankaccount information to withdraw funds from their payment serviceaccount. Because of this, payment service organizations that allow theuse of a third party service to withdraw money are popular because theyoffer an extra layer of anonymity. In an ideal situation, carders wouldsimply withdraw from their payment service account directly into cash,or better yet have cash wired to them.

The second most important factor is the service fees. Most cardersgo for the payment services with low service fees. Or, if there arefees, they prefer it when the customer is charged and not the seller.This way, a carder that is selling laundered credit card informationdoesn’t have to lose money in service fees.

Finally, one more factor makes certain payment services more popularthan others in the electronic fraud community: ensuring that money thatis paid cannot be charged back. Certain payment services ensure thatonce you have been paid, you stay paid. This protects legitimatecarders from being ripped off. It also helps another member of theelectronic fraud community: the ripper. Rippers are people who sellfake credit card and identity information. Rippers are likely to choosepayment services that will allow them to sell fake information and nothave to worry about losing the money they were paid. Because of this,payment services that guarantee no charge backs, or that pay outdirectly in cash, are popular in the carding community.

No matter which payment service fraudsters use however, there issome irony here. The most popular payment services have Websitesadorned with fraud protection tips for users that are sending money. Ican just imagine a carder paying for stolen credit cards while at thesame time reading tips on how to keep their stolen credit cardinformation from being stolen again. And all the while, the paymentservices profit from the illegal transactions that they facilitate.

But this time it turns out that I am not the only one to see the irony. It was reported recently that a grand jury in Washington DC has indicted EGold,one of the most popular payment service companies among carders, formoney laundering related to identity theft as well as other charges.The indictment stated that EGold had knowingly conducted fund transfersfor their customers that were the proceeds of illegal activity. Perhapsthis is a sign that payment service organizations are going to have totake better care to be responsible for their money transfer in thefuture or face a similar fate.