Years ago, the method used by criminals to see whether a stolen credit card was still active was to charge a penny to the account. If it was authorized, the criminal could then purchase more substantial goods using that card. Credit card companies and banks have both gotten wiser. Today, they look for penny purchases as well as random gas station purchases, for example, as early warning flags. Well, the criminals may have outsmarted everyone this time.
According to a Symantec enterprise security blog, criminals are now attempting to pay small amounts to various charities, including the Red Cross. The criminals can determine the value of the stolen card depending on the success or failure of the transaction. Active credit card accounts sell for higher values on the Internet black market.
Symantec believes that bank behavior monitors, the services that flag inappropriate use of your credit card, are less likely to pick up on such transactions. Given the random nature of charitable donations, banks would be unable to determine whether such activity is out of the norm.
This raises some ethical issues as well. The charities need the money. And you might not be too upset to learn that you have donated, given that you can claim it on your taxes. But unless you are monitoring your credit statements online, you might not otherwise know that your card has been stolen. You certainly don't want to get stuck paying for online electronics purchases earmarked for addresses in Eastern Europe.
(Credit:
MagnePrint)
The way the particles land on a given credit card's magnetic stripe are as unique as individual snowflakes or human fingerprints--or so says a Magtek, the company that developed, MagnePrint, which records the unique magnetic media signature for all credit and debit cards scanned through its readers. The first scan by a MagnePrint reader creates a template against which all subsequent scans are compared.
MagnePrint is designed to prevent "skimming." Online carders buy credit-card information from a black-market database, then copy that information onto a blank physical card using a machine that costs about $250. The skimmed card is then used in an ATM or a retail environment, as though it were the original card, until the credit or debit limits are maxed.
Using MagnePrint, faux cards are identified quickly. Even if you were to rerecord the magnetic stripe information onto your credit card a second time (say you damaged your first card and seek a replacement), the magnetic particles on the second card would not match the original and would be flagged. The results are given in percentages, with around 80% considered to be enough of a match. The bank always has the ability to accept or deny the recommendations.
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