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Talk about a scam

R

rrlund

Well-known Member
There probably aren't more than a hand full of you here who read Sherry's editorial in Oliver Heritage magazine,but it was a new one on me that set me to thinking.
She said that when they came in to the office right after Thanksgiving,there was an attempt at 400 new subscriptions. They all used the same name,but 400 different credit card numbers. None of them worked. She said she contacted their "gateway" and alerted them. They said it was a scam,that they were being used as a test site by a computer generated program trying to find a good number that worked.
She thought that was the end of it,but on Monday,there were 42,000 attempts. The following Friday,there was $10,000 gone from her account. She'd been charged a "transaction fee" for every attempt even though they hadn't gone through as good numbers. Apparently after a lot of negotiating,the first institution in the chain refunded the charges since she had notified them,but the second institution in the chain refused,and since she was contractually obligated to pay the fee,she was out $7000.

I got to thinking about that. Number 1,if this ever works,scammers don't need your card number,just your name and address out of the phone book,then they can computer "roulette" numbers until they get it.

Number 2 and maybe more important,what's to stop some unscrupulous banking institution,like the one that created so many fake accounts,from running phony transactions on tens of thousands of businesses to collect these fake transaction fees? Maybe technology along with economy of scale (businesses that have become too large) has gone too far?
 
It has become too easy for scammers to operate. The only limiting factor is their imaginations.
BUT...
Keep in mind this much:
Every time you write a check, you are giving the recipient your account number, your bank's routing number, and the sequence number of your check.
Every time you use a credit card, you are giving the merchant your account number along with a host of other personal information.

We are solely dependent upon the honesty of others and the protection of the law to keep EVERY transaction from being an issue of identity theft, or some other way to scam you out of what you have.

AND, anybody that thinks that they can protect themselves from these scams by doing things like keeping your cards off the internet, not banking online, or some other means, THINK AGAIN!! Unless you deal strictly in HARD CURRENCY, you are vulnerable. By hard currency, I mean gold, silver, or copper. No paper!!!
 
Interesting thoughts for sure!

I've heard for a long time about the fears of a massive eAttack on the USA. Mostly the author would be inferring that China would be the most likely attacker. However, I can't help but wonder if this is just a cover story used to prevent panic amongst the people. I mean, who else but a rising superpower could cause such harm, right?

It has been baffling me why so many online sites haven't been fighting back against this. Maybe I'm just being too naive (again!) and life really is like RR was mentioning - that banking institutions simply aren't taking any of it seriously. I, however, am very much hoping it's like going fishing, and that allowing them a little leeway is just dangling a bait in front of them, which is allowing our high-tech guru's to build protection for when the "Big Event" finally does happen. Thoughts?
 
Reasons NOT to accept credit cards in a business:

1) You give away about 3% of your sales to a bank.

2) You encourage a situation which allows financial institutions to collect the equivalent of a sales tax on every purchase made. Money they do NOT return to their investors or depositors.

3) Every penny your customers pay you on a card is reported simultaneously to the IRS and can affect the timing of revenue recognition but, worse, stinks of big brother tactics and excessive government insertion in your affairs.

4) Allows your customers to pay you with other peoples money, frequently never repaid.

5) What rrlund just said. And I could go on if I had more time.

I get a lot of argument from (mostly) younger people about the above in my practice. They do not understand or appreciate things like free speech or privacy or individual choice...no matter how much they protest the opposite. If that magazine had better advisors they would have been told not to keep so much money in an account that was vulnerable to a criminal action aided and abetted by their own bank. I would sue the bank shortly after I moved my accounts.
 
RR to complicated for my old brain and no disrespect to you BUT IF PAY PAL CAN REVERSE A TRANSACTION weeks after it happened and visa can to if a dispute arises I don't see how this can happen once a bank changes it due to a dispute. We had one locally where an account was closed or over drawn and they kept trying to process a payment and charged (electronically) a non sufficient funds fee. Well in the end you can't get blood out of a rock.
 
I don't know,you'd have to read the entire editorial yourself. She put it in farmer terms so it would be easier to understand. I'll try to quote some of it the way she put it. And this is just one paragraph of a long column,so bear with me.

"When online orders are placed on our secure site,the credit card information and address is gathered by the gateway. Hereinafter,we shall refer to the gateway as the "sediment bowl". Once all the information is collected by the sediment bowl,it travels down the line to the merchant account,hereinafter referred to as the "fuel pump". The fuel pump then processes and charges the card. Both of these systems must work together in order for the machine to run,or charge your credit card."

She said the sediment bowl admitted it was fraud and since they were notified,they refunded the money. The fuel pump knows it was fraud,but refused to refund their charges. They said the "bad fuel" should have been stopped by the sediment bowl and should never have reached the fuel pump.
 
I read the article and it might be the reverse of scale. The company i work for is fairly large they have a department that double checks large orders (overseas they get stolen credit cards and order large amounts of goods) and any other suspicious activity. Sherry being small would not be as able to protect herself and makes an easier target.This might be a case where an overseas operator got some cards .
Its almost like buying a lottery card you keep trying hoping one will win.
I hope things work out for her but there usually ahead of the game and in a country that you can't touch them. It's as bad here in the u.s. different states have different laws and even different banks have different rules.
Bottom line in god i trust the rest cash
 
Convenience. It's easier to pay some fraud instead of stopping it.

Until, soon, everything is fraud.

Then it's a too big a problem to stop.

Would have been easy to nip early on, but that would have cost $xxxxx, and just accepting the little bit of fraud only cost $xxx back then, so take the easy route, turn a blind eye.

Let the happy days roll.....

Until the problem rises up to be an oh my gosh deal, and then look around surprised that anything of that size happened?

Drugs, scams, illegal immigration, insurance fraud, spiraling health care costs, on and on.

It's all the same deal.

Govt, at the urging of the general population, starts turning a blind eye to the small problems.

And we get what we deserve, bit in the rear end in a big way.

Paul
 
There was a story on one of the weekend shows on NPR not too long ago about a guy who had his credit card number stolen. He managed to channel his anger and track that one down himself. Turned out it was stolen by the girl who took his order over the phone at a national pizza chain.
Anybody who gets your number can do it.
 
How many big businesses would check to see if there were a few failed attempts every month though? Instead of scammers running 42,000 attempts on one small business hoping for one hit,who's to say that crooked big banks aren't running a few dozen fake transactions on tens of thousands of businesses every month and raking in some serious fees? If they'd go to all the trouble of opening God knows how many fake bank accounts,why wouldn't they do this for some easy money?
 
As I have posted on here a couple times. If someone comes on your property and steals your $150 chainsaw, you know who to call. But if someone steals $10,000 on the internet....who you gonna call? Ghostbusters?
Just another example of what our government should have been doing instead of taking 50 meaningless votes that had no chance of passing.....but government today is not about governing, it is about playing to the crowd.
 
Reasons to accept CC's. On-line sales and more customers.

I Accept CC's through PayPal, they charge a little more but don't have to worry about a scam like the above and it's business I wouldn't otherwise get.
 
All good points but the main reason a business needs to accept credit cards is in today's world they'll go broke if they don't.Good or bad its pretty much the way it goes.
 
Yep,exactly. She said she contacted everybody from the BBB to the State Attorney General. It was small potatoes to them and nobody would touch it. And that's even knowing who the company was that refused to refund the money.
 
Sounds like if this scam went widespread,somebody could bankrupt every small business in the country in pretty short order. To the benefit of the banks backing the cards of course.
 
That is exactly what I do. My bank allows free checking for life with no minimum balance. Sometimes My Ebay bank balance gets below $5.oo! No problem. If someone works hard enough to hack that account, they are welcome to it!!
 
Ya,it's evident that a program exists that can randomly generate credit card numbers until they hit one that works. It complicates it when small businesses have to pay while they're doing their searching though. I think now,knowing that it has happened,if I ran a business that takes cards,I would shut it down until somebody can come up with software to block it. The banks paying out the charges don't necessarily know what kind of business you're running. Sherry said that when she asked if they weren't a little suspicious when they saw 42,000 attempts come through,they said they just thought maybe the business was having a sale or something.
 
Also sounds to me like they had found a leak in the system some how. I believe there is much more to this whole mess. Here is a similar example a guy got some kind of direct deposit well he and his wife would go to separate banks at the same time and with draw it. This went on quite awhile before they got caught. Some how they discovered a crack in the banks armor!!!
 
Sounds to me as though she got scammed twice. Once by the one who tried to access her account many times. Second, by the second bank (fuel pump) who had no business charging her for all those bogus attempts.
 
Don't know how I stayed in business the last 27 years. Never took cards, never will. Your blanket statement is just simply false. A lot depends on the type of business, but you can offer a lot of incentives to people and any representation that you "need to accept credit cards" is simply not true.
 
Internet sales are the most common exception where you might need to use credit cards. I do a limited amount of sales to people thru my website and Facebook but have always been paid by check. Last year I had a person who never sent a check but that is incredibly rare here. Taking credit cards is not a criteria for increasing sales. Very few customers are going to look at any business and decide not to use it because they cannot pay with cards. Service, product, etc etc etc...more important.
 
Some of the blame does belong on her (or the person who wrote her web site).

First, why would her site accept 42,000 attempts from someone? It should be after three tries you're out. Or at least put a timer in there so if an attempt fails you have to wait about 10 seconds before you can try again.

I'm not saying the bank is handling this well, but they're throwing some of the responsibility back. Otherwise there's no incentive for business owners to spend a little more on making their web sites more secure.
 
For all you guys that want "minimal" government...just call the local sheriffs department when you are the victim of an internet scam or a robo-call fleecing. They will send out good old Barney Fife. 'cause Ol' Barney is their 1940's solution to a 2017 problem.....and in 2017 that means you are .....SOL.
 
First, for the guy who thinks the blame belongs on me - I DO have limitations for usage on my site. No more than 10 charges (or attempts) can be made from the same IP address in a day. But, this scammer was able to hide his address so he slipped thru the cracks on that one. I have numerous fraud filters on the site, and even more were added after the first 400 attempts. I have cyber fraud insurance on my business policy and was turned down there too. I had everything in place to protect myself from something like this. It all failed. Do I think it was an inside job from the banking facility? It very well could be but I can't prove it. Obviously we're not with them anymore. But it was timed by someone that knew we would not be around over a holiday weekend. (Started Wednesday evening prior to Thanksgiving & quit Monday AM when we came back.) By the time I hire an attorney to fight this, I'll still end up with nothing, so once again, the little guy gets screwed. Yet today I tried to use my debit card in TX and it kept getting declined. The bank called my office to tell the girls someone was trying to use my card in TX. If they'll shut my card down after 1 attempt, why in the world couldn't they do something before 42,000 attempts by some scammer?!
 
Bingo!
Follow the money.

It would be like monsanta breeding super weeds in some back lot lab and then selling a new herbicide.

I sometimes wonder if the anti-virus companies are the ones making some of the viruses. Other than outright theft, the viruses and hacking attempts that make the news don't seem to generate any income.
 
Any local news stations that might pick up the story? Perhaps some bad press might put enough pressure on the fuel pump for them to change their minds.
 
Sorry to here about that Sherry,that makes you want to ring someones neck like a chicken till their head pops off. your old friend Den.
 
It is not their job to lock your doors at night. It is their job to catch the person who breaks the law by breaking into you house or shop.

In the case of computers our government has decided not to enact appropriate laws against scams, hacking, or theft.
and they certainly have not put any enforcement mechanism in place.....so we just get to call Barney Fife!
 
(quoted from post at 18:34:13 03/14/17) For all you guys that want "minimal" government...just call the local sheriffs department when you are the victim of an internet scam or a robo-call fleecing. They will send out good old Barney Fife. 'cause Ol' Barney is their 1940's solution to a 2017 problem.....and in 2017 that means you are .....SOL.
Click to expand...

You can trim a great deal of the government and still have law enforcement. [b:567002d929]This is not an excuse to have a big government[/b:567002d929]. Just how is a bloated EPA, Social Services, USDA, and OSHA doing anything about internet crime?

One thing no one is looking at here, and what this sounds like to me is not an attempt at fraud, but an "internet attack". It happens all the time. Someone with an agenda? Say an environmentalist bent on shutting down sites that promote running old gas guzzling smoke belching tractors? Disgruntled customer? Or someone just being a jerk. One of my sons is a Network Engineer for an communications company. The number of attacks like this are astounding and extremely hard to track. Most are in the form of "denial of service" (DOS) attacks. That's where they flood a sight with so many attempts to log on that someone trying to access the site can't get on. Happened just a few weeks ago with Amazon. Happens to government web sites often. As far as tracking these attacks? That isn't easy either. They can simply plant a bot in peoples computers around the world who don't have a firewall and a good anti virus program. Then at an appointed day/time they all kick in and do what they are programed to do. And just how do you track it when a perpetrator uses a coffee house's guest login for the "free" connection? For those of you who have never been in one there are normally customers sipping their "foo foo latte" drinks and getting online to chat shop or maybe upload malicious programs. These places with free WIFI don't keep track of customers who use them. If they could simply look at something and track it back we wouldn't have these problems.

Rick
 
Agreed, So why do I want them poking around my computer?


The government has all those laws in place - they just don't have the ability to enforce them because they are 20 years behind the times. Theft is theft, destruction of property is destruction of property - adding "computer" onto the end of law doesn't change anything.
 
So you are saying the criminal world has left the police departments with all their "C" grade high school graduates... in fancy uniforms......behind? Yep! But our guys have guns...guns on display...on the hip!!!! A really strong deterrent to cyber-crime....when the perp is 1000 miles away.
 
Sorry for my flipent reply, but expecting cyber law enforcement from the local law department, is like expecting
that a sheriff sitting on a horse beside the interstate is going to slow down speeding trucks.
 
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