Legal, Regulatory, and Privacy Issues

Thieves use charitable donations to enable credit card scams


Crooks who want to see whether stolen card numbers are valid use charitable donations to check.

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According to Symantec Corp., Internet fraudsters have begun using donations to charity as a way to test whether the stolen credit card information they plan to buy and sell is valid.

Identity thieves who traffic in stolen credit card data may have a difficult time verifying credit card numbers work without alerting the card issuers to suspicious activity, which could render the credit cards inactive.

By making a relatively small charitable donation on stolen plastic, thieves are able to see if the credit card is valid based on whether the transaction goes through. Meanwhile, such card activity does not usually set off any alarms for the card issuer. Since credit card donations are rarely everyday consumer behavior, it makes charitable giving tough to identify as unusual cardholder conduct.

Meanwhile, the American Red Cross said that in June 2007 alone, the emergency response organization refunded 700 fraudulent credit card transactions, not including donations that were blocked for their fraudulent appearance.

What causes the Red Cross to raise a red flag? Among the details that inspire suspicion are a number of donations from a variety of credit cards that nevertheless use a single e-mail address. Such donations are automatically canceled.

To protect themselves from illegal credit card use, consumers should keep an eye out for even minor transactions on their card statements that look to be unauthorized, since they could be the result of identity theft.

If they do come across charitable donations or other unauthorized credit card payments, cardholders should immediately contact their card issuer and inquire about canceling the account.

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