Update on Credit Card Fraud

I have received my next American Express statement since my earlier post about the discovery of fraudulent charges. American Express has not credited my account for the December 11, 2007 Paradise Web charge for $9.59. In addition, the January 1, 2008 charge by VALLJRSX VALL-JRSX for $12.24 I discovered by checking my account online also remains on the statement in spite of advising American Express by phone on January 3, 2008 that both charges were fraudulent. I logged onto my account again today to determine if American Express had corrected my account after the date of this most recent statement. It had not. However, on or after January 14th a credit had been given in the amount of $9.45 for a November 7, 2007 charge by E NAT NATALIYA MAKOVI. I can’t believe I missed that one! When I later called American Express I stupidly failed to ask why and how that unreported fraudulent charge got refunded. After thinking about it this evening, I’m wondering if American Express is handling the matter as a disputed charge rather than a fraudulent charge, and did in fact give Paradise Web notice as today’s AmEx rep told me (see below). Does this development prove MGD’s belief that all these companies are tightly linked as he reported in the DSL Reports thread? That would mean that E NAT NATALIYA MAKOVI was tipped off by Paradise Web and took pre-emptive action refunding the money in order to avoid chargeback fees. But, since American Express failed to include VALLJRSX as a fraudulent charge when I first reported it on January 3, why didn’t VALLJRSX also avail itself of an opportunity to take pre-emptive action? Anyway, moving on to today’s discussions with American Express.

Fearing my report of fraudulent charges by Paradise Web and VALLJRSX had fallen through the cracks, I called American Express again today. The first customer rep I spoke with advised an investigation had been initiated for the Paradise Web charge but not the VALLJRSX charge. He also said the Paradise Web investigation would take six to eight weeks to complete, and that Paradise Web would be notified I was contesting the charges. Whereupon, I vehemently once again told today’s rep these were not disputed charges but fraudulent charges and I did not want Paradise Web to have an opportunity to refund my money without incurring chargeback fees. I told the rep I spoke with on January 3 the same thing. Today’s rep, as did the one I spoke with on January 3rd, immediately transferred me to a rep in the fraud department.

Once again, I retold the entire problem from the beginning through today. The fraud rep confirmed that the Paradise Web investigation was “still pending”, and added VALLJRSX to the case number. He also stated (as did the fraud rep I spoke with on January 3) that I would receive a letter from American Express within three to four weeks of the original notification of fraud charges. Based on my experience last year with Visa, that means more paperwork for me to fill out and return to American Express. If that’s what it takes, sobeit. I specifically asked whether or not these criminals would incur chargeback fees. He said they would, but I’m skeptical what good that will do based on MGD’s report of a “reversal agreement” American Express has with these yahoos. I also told the fraud rep that I’ve been following tons of reports on the web of these same fraudulent charges since the beginning of January, and that it’s obvious this is a problem that, to date, involves only AmEx cardholders. Neither he nor any other AmEx rep I’ve spoken with has acknowledged in any way, shape, or form whether or not these companies are in fact being investigated as criminal organizations. While they assure me the charges are being investigated as fraudulent, I’m not confident yet that they are.

When I first Googled VALLJRSX on January 2, the only return was to Chris Jupin’s post which then led me to the thread at DSL Reports. Now there are 40 web pages. On January 14th, one day after my original post about fraud, this insignificant little blog received 17 hits from search terms ranging from “VALLJRSX” to “fraud charge amex direct MKTG”. Since then, this blog has continued to receive an average of seven search term referrals every day. I can only imagine the number of hits the DSL Reports thread and Chris Jupin’s post are receiving. No doubt the web reports and web traffic only account for a tiny, tiny fraction of the calls American Express is receiving. On top of that there are sure to be people who never even caught the fraudulent charges on their statements, just as I didn’t catch the one in November. I’d like to believe that with so many reports of AmEx cardholders being hit with the same fraudulent charges that AmEx has become acutely aware it has a serious problem on its hands, and is willing to take the necessary steps to track down and prosecute the thieves. Again, I have my doubts.

To anyone reading this post, I’m sorry if it’s confusing and has more typos than usual. I’m aggravated. I’m tired.

11:57:44 pm EST

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Credit Card Fraud — Too important not to read and learn

One evening last year at the very end of December, 2006, I received an automated call from one of my credit card companies asking me to call them to verify that charges made to my Visa card were in fact mine. As it turned out, they weren’t. My card had been compromised. There were a lot of charges too. Most were small and from all over the world. The credit card company took all the fraudulent charges off my card, initiated a fraud report that required time and paperwork on my part, deactivated the compromised card, and issued a new card for me.

Needless to say, I was freaked. My first thought was identify theft. So, I signed up with Equifax for their Credit Watch Gold with 3-in-1 Monitoring, using my AmEx card, so I could monitor my credit reports for identiy theft more frequently than once a year. Thankfully, no one ever tried to open accounts in my name. I finally cancelled the Equifax account yesterday and will revert to requesting a free credit report once a year.

When this kind of thing happens, the first thing we all try to do is figure out the unsecured weak link in our online shopping that’s responsible for the breach. Anyone who has online accounts or does a fair amount of online shopping and been hit by credit card fraud knows it’s impossible to pinpoint. Sites such as Ebay, PayPal, Amazon, and even Equifax, are often suspected as the possible source. As all the comments in this blog post by Chris Jupin clearly shows, trying to narrow it down to one of those suspected sites as the source of the problem is a futile exercise.

As a result of my experience last year, I became extremely cautious about the online companies and sites with which I do business. If the website doesn’t have a phone number where I can call and place an order, I don’t buy from it, no matter how much cheaper it sells an item, or how long it’s been on the net based on the WHOIS information.

Since that time, everything’s been hunky-dory, that is, until December 11, 2007 when a charge for $9.59 for “Internet Downloads” suddenly appeared on my American Express statement from a direct marketing internet merchant identified as PARADISE WEB out of Plumas Lake, California. After checking with the gamers in my house, I realized it was a fraudulent charge. Based on my past experience with the VISA card (multiple charges made fairly close together in time, with each subsequent charge slightly increasing in amount), I logged on to my account at American Express. Sure enough, there was another fraudulent charge on January 1, 2008 in the amount of $12.24 for “Internet Downloads” from a company identified as “VALLJRSX VALL-JRSX” out of West Sacramento, California. I contacted American Express and reported the charges as fraudulent and requested a new card. I did not realize at the time the importance of taking those two steps rather than simply requesting the credit card company to remove the charges. American Express readily complied, deactivated my card, instituted a fraud report, and issued me a new card.

When I first discovered the charges and Googled the company names and addresses in an attempt to learn more about them, the only pertinent return at the time was to Chris Jupin’s September 13, 2007 blog post (linked above) about his experience with credit card fraud involving a company called Digismarket. Even though Digismarket was not the source of my bogus charges, I nevertheless decided to read the post and all the comments. (At present there are a total of 242 comments.) As I continued to read through the comments from others on the receiving end of credit card fraud, I noticed the names of the fraudulent companies varied over time. Old names would disappear from the comments and new company names would appear with similar reports somewhat clustered together. The first mention of a company with a Plumas Lake address appeared on November 30, 2007. Then, sure enough, the first mention of Paradise Web and VALLJRSX appeared on January 1, 2008. The vast majority of comments since January 1 have dealt with those two companies, plus one by the name VIN Design. Of those chosing to identify their compromised credit card, all were American Express cards.

Someone in the comments linked to this thread at the Broadband Reports.com (DSL Reports.com) forums. A forum user there, MGD, is doing a yeoman’s job in investigating the who, how, and where (As in, where does the money go?) of credit card fraud. I highly recommend everyone take the time to read the entire thread. Bookmark it and revisit from time to time to catch up on his updated reports. At the very least, read every post made by MGD in that thread. What you may think you know about credit card fraud will be debunked. What you learn may be invaluable to you in the future.

Credit card fraud can plague any of us. Think you’re exempt because you don’t make online purchases? Think again. Think you’re exempt because you only have online accounts with and order from highly reputable companies such as Sears, Penney’s, Kohl’s, etc.? Think again. Even credit card accounts that weren’t used for several years for purchases anywhere, online or otherwise, but were never canceled and remained open, have been subject to credit card fraud. Some cardholders that have never ever, not even once, used a card to make an online purchase reported credit card fraud. Think you’re exempt because you use a debit card and not a credit card? That’s even worse according to MGD (emphasis mine):

I rarely expose my debit card to the system anywhere, I like to keep that account data out of circulation as much as possible. I prefer the ability to have a second opportunity to review transactions before actually paying for them. Versus having to chase after a potential fraud issue where the money has already been removed from my account. The banks monitor credit card transactions with a much higher level of scrutiny, because it is their assets that are exposed. The primary burden shifts to the account holder for debit transactions. When a debit transaction is presented, as long as there is money in the account, it will be paid. That policy is just my personal preference, based on the way I see the entire industry operate.

For anyone else who has discovered fraudulent charges on their credit card by PARADISE WEB, VALLJRSX VALL-JRSX, VIN Design, and another bogus company he identifies as E NAT NATALIYA, the links to MGD’s reports as of this date on that specific branch of the crime syndicate plaguing American Express cardholders can be found here, here, here, and here.

After last year’s experience with my VISA card, I thought I’d learned a lot about how to protect my credit cards on the web, and I had. What I hadn’t learned was how credit card fraud in general operates and flourishes via uninformed consumers, and sometimes even uninformed credit card companies. Thanks to MGD’s stellar investigation of credit card fraud, I’ve recently learned, among other things, that:

1. No one is exempt from credit card fraud.
2. There is no way to 100% inoculate yourself from credit card fraud.
3. There are no subscription protection services that can prevent fraudulent debit or credit card charges from occurring.
4. If you are a victim of credit card fraud, there are specific steps you should take, including, filing a report with the Internet Crime Complaint Center.
5. Use a credit card, never a debit card, for online purchases.

So what are you waiting for? Go. Read. Learn. Learn the correct steps to take if you are a victim of credit card fraud. Learn how these crime syndicates operate so you won’t become one of their mules. Although, IMO, only people of questionable character are willing to participate in an activty where they make quick money doing nothing, or practically nothing, without first thoroughly investigating. Turning a blind eye to the obvious red flags of a scam does not make them victims too, but I digress.

5:02:27 pm EST

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