Identity Thieves Using Charities for Credit Card Fraud

October 25, 2007 By Matthew Paulson

Credit card fraud is a substantial problem in the United States and banks that offer credit cards are losing millions on an annual basis. When a criminal steals your credit card number, one might think that the first thing that the criminal would do is buy gasoline or go on a retail shopping binge. However many criminals actually take the stolen credit card number and use it to make a charitable donation.

These modern day Robin Hoods aren’t giving money based on some perceived moral obligation to redistribute wealth from the rich to the poor, but rather as part of a ploy to steal money from unsuspecting victims. Criminals will donate a small amount of money to their favorite charity, usually around $100, with the stolen credit card information they retrieved. The charity will then either tell the person the credit card information is not valid and then the criminal will hang up, or the charity will thank the criminal kindly for their donation and go on about their business thus confirming that the credit card is alive and active.

Making a small donation with someone else’s credit card is also a great way for criminals to tell whether or not the card will be reported stolen. If the person keeps a close eye on their account and their daily transactions, they will report the card stolen and the card will be worthless. If the card is not reported stolen, then the criminal knows they have a valid card and can milk it for a significant amount of money.

Stolen credit card credentials are much more valuable to criminals when they know that they’re validated and useable. A recent Newsday article reported that criminals can re-sell unverified numbers for $6.00, but if the number is verified and tested, it can be sold for $18.00. A simple call to the criminal’s charity of choice can triple the value of stolen credit card information.

In one month, the American Red Cross reported over 700 unauthorized charitable donations, and that’s just one charity! Identity thieves and con artists are using charities to further their cause at levels previously unseen!

In order to protect yourself, you should look at your recent activity on your credit card on a weekly basis. If you see any charges that you did not authorize or look suspicious in any way, you should call your credit card company and report the charge as stolen and have the card deactivated.

Posted in credit cards

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