How Criminals Are Pushing Fake Content Online to Test Stolen Cards

Online fraud has always been a big problem, but now with consumers purchasing more online in the face of the coronavirus pandemic, criminals are finding even greater opportunity for illicit gain. 

One big area of concern is content fraud on digital marketplaces, which can be used to perpetrate payment fraud and account takeover. It’s also turning into a favored way to check out stolen card details. Fraud attempts related to content rose 109% between January and May of this year, compared to the same period in 2019, according to a report from Sift, a provider of trust and safety applications to prevent fraud. 

For the report, Sift surveyed more than 1,000 customers about fraud trends from January to May and pulled related data from its global network of 34,000 Web sites and apps, in addition to surveying 1,000 consumers.

The increase in scams on e-commerce sites is likely connected to the global disruption in consumer buying habits caused by the  pandemic, which in turn, has opened the door wider for criminals to deceive and exploit consumers for financial gain.

One scam uncovered by Sift is the creation of false storefronts on an e-commerce marketplace by a Russia-based fraud ring that aimed to test stolen cards. All the storefronts in question used identical IP addresses and listed items for the same price, $99.99, which is an uncommon practice for sellers on the marketplace. As part of the scam, members of the ring posed as buyers. After negotiating down the price to $1, the “shopper” clicked the buy button. If the transaction went through, the fraud ring knew the card was good to use elsewhere for larger purchases. The attempted scam also sought to bolster the fraud ring’s legitimacy on the marketplace by having the buyer “post positive, yet fake, reviews,” the report says.

The scam is a variation of a proven technique used to test stolen card data by making small purchases at legitimate merchants to see whether the card has been shut down or gets flagged for a potentially fraudulent transaction, says Kevin Lee, trust and safety architect for San Francisco-based Sift. 

Criminals will typically test dozens, and as many as thousands, of stolen cards at once across multiple marketplaces. “Marketplaces enable sellers to accept credit cards. and fraudsters are exploiting this gap,” Lee says. “Marketplaces are unregulated platforms that can attract fraudulent sellers and buyers, or both working together.” 

The risk for marketplaces from content fraud scams is that legitimate buyers will go elsewhere if they suspect a seller’s content is fake and intended to extract account or personal information that can be used to make fraudulent purchases, steal identities, or create a synthetic identity. Some 56% of the consumers surveyed say they would do exactly that if they do not trust a seller’s content on a marketplace. In addition, fraudulent content can also damage a marketplace’s brand and raise the cost of customer acquisition, the report says.