News & Resources

New payment platforms contributing to growth in fraud

Feb 13, 2013 Walt Wojciechowski

Bashas' Grocery Stores, a supermarket chain based in Arizona, recently fell victim to a card scam - and an FBI investigation revealed that these criminal actions may have been part of a worldwide fraud chain

"It seems there was a breach of information and that information has been sold," Sam Imandoust, legal analyst at Identify Theft Resource Center, recently told Bank? Info Security. "It does not seem the hackers themselves just got the numbers and then used them for purchases. This was a more strategic event."

The investigators discovered that the scam, which could go back as far as late 2012 and consisted of at least 400 incidents, involved sophisticated malware infiltrating the company's network. With access to debit and credit card information to the supermarket's 130 locations, cybercriminals were able to steal card numbers, which were then sold to hackers in different locations.

"Just reading through the responses, these cards are being used all over the place," Imandoust told the news source. "The fraud is not isolated, so it seems like the numbers were probably sold. One post says a card was used at a store in Texas, and there are other posts that suggest this is pretty big."

Worldwide fraud rising
Fraud prevention will be extremely important for retailers and businesses going forward, with a Kroll Advisory Solutions study finding that 60 percent of companies worldwide were impacted by scams in the past year. More concerning is the fact that only 30 percent of senior executives believe their businesses are vulnerable to fraud, compared to 50 percent in a year ago - even though incidents of fraud have remained consistent. 

Companies across many different industries experienced increases in scams, particularly organizations within the manufacturing and financial sectors. Information fraud is especially problematic right now, cited by nearly a quarter of respondents. 

Without question new technologies - like electronic payments platforms - have contributed to some of the rising threats of fraud. According to a recent article by The Economic Times, the Indian Reserve Bank discovered a major credit card scam that targeted victims in eight countries, including the United States. These attacks leveraged stolen credit card information from electronic purchases.

In the U.S., more than 25,000 fraudulent credit card purchases led to losses that exceeded $200milli on, according to the news source. James Simpson, FBI special agent, suggested that companies with ecommerce platforms will need to enhance their real-time fraud prevention tools.