fraudsters case study

Fraudster case studiesUnderstanding the mind of a fraudster

Background

Ex - Detective Inspector Roy West

Case solved

Methodology

Fraudster A: Amy

The Fraud Managers

Fraudster B: Barry

Fraudster C: Charlie

Contents

3

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15

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Fraudster case studies | 3

Background

Methodology

Fraud costs. At present the UK’s annual fraud bill is estimated at £73 billion-a-year and rising.

But to tackle it, we think it’s vital to get inside the mind of the fraudster. Understanding the who, the what, when, where and why, is critical in the fight against fraud.

As a world-leader in fraud prevention, we are right on the front-line. We see companies that are continually getting hit by fraud attempts and others that are employing the latest technology to vigilantly keep both casual and organised fraudsters at bay.

By using identity verification, transaction screening tools and man-hours to review suspicious customers, businesses are winning the fight.

Selection of participantsThe retail fraudster, gaming fraudster and information broker were participants directly or indirectly involved with online fraud. They were identified through enquiries within the criminal justice system and by reviewing case studies used in other projects. Each participant was interviewed by telephone initially to ensure they were suitable and answer any concerns they had. Neutral public venues were selected to interview the participants and all interviews were recorded. Due to the fraudulent activities being potentially illegal, no payment was made or offered for their participation. No identifying information will be given through the case studies and all names have been changed to protect the individuals.

Inside we have carried out first-hand research into how ID fraudsters operate with a series of case studies. From the ecommerce fraudster who had never shopped online before, to the self-proclaimed ‘king of the internet’, or the information broker who doesn’t feel like he’s doing anything wrong.

We also speak to the policeman who is scaring fraudsters into submission and fraud managers who found themselves at the sharp end of the fight against fraud.

Each tells a different story - but the general theme is one of ease. Many admit they lack any sophisticated technical know how, but they all agree how easy they find it to defraud sites.

Convictions and current offendingAmy and Barry were convicted for the fraudulent activities mentioned in their interviews. Both claim there are no outstanding crimes. This was very important as if we were led to believe there was illegal behaviour still ongoing we could face prosecution if we did not report this to the authorities.

Ethical guidelinesFraudster research was conducted within the framework of the ethical guidelines of the British Society of Criminology. Care was taken to ensure that the data generated was anonymised to protect the confidentiality and integrity of research participants or the company for which they are employed.

All fraudster names are therefore fictitious.

Many websites have little or no identity verification processes in place to prevent fraudsters scamming companies out of thousands of pounds. Some smaller businesses have even gone bust due to the huge weight of chargebacks on their cash flow.

But hopefully this research will prove useful to you and your fraud prevention teams. If you have any further questions then please contact us.

4 | Fraudster case studies

Fraudster A: Amy

Gender: Female

Age: 32

Previous convictions: No criminal past for her or her family

Length of time active in fraud: Two years

Conviction: One conviction for three counts of fraud

Sentence: Fine and community penalty

A chance eventAmy was working in a clothes shop when she was first given the opportunity to commit fraud.

“This woman left her card behind. She was in a rush and grabbed her bags and left before I could tell her. So I had her credit card and eventually I thought ‘why not?’ and decided to use it.”

Amy initially used the card within the shop she worked in to buy clothes. Although she was scared about getting caught, when nothing happened the chance event gave her the opportunity to start her fraudulent activities in earnest.

“I just put the card down the drain ‘cos I was a bit scared to start with - that I’d get caught. But when nothing happened I was really gutted because I thought that I could’ve tried it again.

“I even went and looked down the drain to see if I could get it back but it was gone. That’s when I decided that I’d try and get another one.”

At this point Amy decided to find a way to swindle customers’ cards off them. As the card was being swiped she would keep hold of it, pass the customer their shopping bag and hope they forgot about their card. Then she would use the card to buy items from the store she worked in.

“There weren’t loads of opportunities but I got a really good supply of cards like that.”

Amy then began work in a larger department store where security was much tighter, so she was unable to put card transactions through the till she worked on. This is when the internet became an attractive alternative channel to commit fraud. Amy was too scared to commit fraud in the high street, so she opted for the relative anonymity of the web.

“This woman left her card behind. She was in a rush and grabbed her bags and left before I could tell her. So I had her credit card and eventually I thought ‘why not?’ and decided to use it.”


Hurdles to jump overAmy quickly realised that there were a couple of necessities needed in order to spend online - both the billing address for the card and somewhere to deliver the items to.

“I could see from shopping on my card online that you needed two things I didn’t have and that was the address for the card and somewhere to get the stuff sent.”

She quickly jumped over this hurdle by persuading customers to apply for store cards and getting all their personal details that way. The next hurdle was where to deliver the item she had bought. In common with many fraudsters Experian has encountered through its research, Amy found a safe house to get the goods delivered to. Her sister rented a house to students which had a high turnover of tenants.

“I’d just say that my sister wanted me to read the meter, or check the boiler, or something and they’d let me get on with it, so I could check for the parcels.”

With these issues sorted Amy could now get on with the business of defrauding customers’ credit cards and hitting plenty of ecommerce websites.

Why? “Because I can”What motivating factors lead to fraudsters committing card not present fraud? Is money the primary factor, or do other factors come into play? As with most fraudsters you can imagine that money was a key motivator to committing fraud.

“I made my salary over again each month at least.”

Having ‘nice things’ also motivates many fraudsters - be it electronic gadgets, expensive suits or designer home ware.

“I’d always wanted to be someone who had a house full of things from Laura Ashley.”

Escalating after the first theftWhat is notable is the evident excitement of getting one over on the websites and also the individuals whose cards she had stolen.

“There’s something about getting it. It’s exciting, not because it’s free.”

After she had kitted out her house Amy realised she could start to make some money by getting items that were requested by friends and family who thought she just got a discount from the department store.

“DVDs, iPods, plasma TVs a lot of the time - but anything people asked me to get.”


Fraudster A: Amy

A lack of defence against fraudulent attacksAnother reason that surfaced for defrauding websites was the ease of it all. Despite a lack of knowledge about even the basics of internet shopping, Amy found it easy to break through website defences due to their lack of verification procedures.

“Because I can. Because it’s easy, is that enough of a reason?”

Due to this lack of defence against fraudsters by ecommerce operators she found a lot of websites to be similar.

“They’re all as safe as each other. I mean I wouldn’t do anything stupid like try and get into someone else’s bank account and get money ‘cos that’s obviously risky.”

Amy is obviously referencing the difference between banking websites which have stringent and difficult security measures to get through. However, she demonstrates how easy it is to defraud ecommerce sites that have no defences in place such as identity verification or shared fraud alert data which would have tripped her up.

The fact that credit card companies fail to report the fraud was also a reason it was so easy for Amy to continue.

Fraudsters’ perception of barriers“When you start, the credit card companies don’t bother with going to the police in the majority of situations. And the customers don’t care ‘cos they don’t lose any money and it’s just peanuts to the bank.”

Amy highlights just how easy she found it to defraud sites due to lack of barriers in the way. By bringing in identity checks such as name and address, a more complete picture of the individual transacting emerges. It will also start to flag up negative searches such as fraud alerts and appearances on mortality databases.

It’s scary just how easy it is for someone with no knowledge of shopping online to start defrauding websites so quickly and simply.

You don’t need to be Einstein to commit fraudWe have an image in our head of a fraudster. Someone hugely sophisticated in their knowledge of internet sites and the tools necessary to defraud sites out of money. However, in this case the individual actually started with no experience of online shopping.

“I did a test run first, with my own card. I hadn’t really ever bought much online myself, so I didn’t really know how it worked.”

It’s scary just how easy it is for someone with no knowledge of shopping online to start defrauding websites so quickly and simply. This lack of knowledge even stretched as far as 3D Secure.

“I’d never heard of 3D Secure. Oh hang on is that the three numbers on the back?”

Amy’s knowledge about fraud appeared to come from training courses she had been on via her work. These told her how quickly cards are used after they are stolen and how long it takes for a card to be stopped.

“It was pretty clear that there isn’t anything that makes it hard online and that’s how I knew it was safe.”

Self-justificationAs with most crimes, perpetrators find a way to justify the reasons for their crime. These can be wide-ranging from thinking someone deserves it, to putting a finger up to the establishment. Amy’s main justification was that she didn’t seem to feel she was doing anything wrong.She first got into criminal activity as everyone else was doing it and therefore internally she could justify it as the norm.

“We all took clothes without paying for them. All of us, including the manager. Part of the perks of the job. Everyone did it. It was no big deal. Just what we did.”

This theme of Amy feeling like she wasn’t doing anything wrong really dominated the interview especially as ordering items online was such an ordinary thing to do.

“I was just sitting in my room with my laptop ordering stuff in the ordinary way. It didn’t feel like I was doing anything wrong. Getting the cards and then that feels a bit wrong, like I was doing stuff that I’d get into trouble for.”


What did Amy think of her victims?Maybe as the victim was faceless she found it easy to commit the crimes. This continued when she carried out fraud online. Instead of the department store, the credit card companies would be picking up her bill.

“I mean, nobody was losing because really the credit card always went through to the shop so they didn’t lose. They should’ve kept hold of their cards better.” Amy was also very keen not to be labelled as a ‘criminal’. She had no contact with criminals and her insistence is again related to her feeling that this was a victimless crime and nothing wrong with it.

“You have to remember that I wasn’t a crook, and I don’t know about crooks.”Morally she has justified her actions to herself as none of her victims were losing out. Although worried about getting caught initially, that seemed to fade as she realised just how easy it was to defraud online.

The end of the roadMost fraudsters get caught in the end and Amy was no exception. Often it is a small slip up and the extent of the crime comes to light. It appears that Amy preferred to take cards off people who made her feel like she was nothing and she labelled, ‘snotty cows’. Using their card details was a form of revenge for what she perceived as wrongs against her.

The card that gave her away was the last customer of the day.

“She went off with her nose in the air like Lady Muck, grabbing away her stupid kid without a thought about her card.”

The woman came in the next day as she had realised she had left her card behind, checked with her bank and found out it had already been used.

“The shop called the police and I got arrested. I don’t want to talk to anyone about it. I hated it. It’s really humiliating.”

The humiliation of getting caught was enough to stop Amy defrauding sites.

“I didn’t suppose I’d have stopped, if I hadn’t got caught.”

When asked if she would do it again, Amy points to the difficulty of balance and although she wants to be the person who has nice things, she doesn’t want to get arrested again and have to go to court. The fact that it’s a crime and morally wrong isn’t a factor that gets mentioned.


Fraudster B: Barry

Gender: Male

Age: 45

Previous convictions: Assault occasioning actual bodily harm, handling stolen goods, possession of drugs with intent to supply

Length of time active in fraud: Five years

Conviction: Two counts of theft and one of fraud

Sentence: Suspended

The draw of stolen cardsBarry had always been ‘a bit of a bad boy, bit of a lawbreaker’ and admits that in the past few years he got involved in using stolen cards. Barry used to deal in drugs and found that his clients would often offer him stolen credit cards instead of money in exchange for drugs.

One of the reasons Barry first got into online fraud was hearing about others making good money.

“People who want drugs don’t often have the money so they offer you other stuff. Once word got around that I was prepared to accept stolen credit cards, that’s what people brought to me.

“I knew a couple of blokes that were making a good living from it and they weren’t exactly clever blokes so I reckoned it would be worth a try.”

If at first you don’t succeedBarry’s first attempt at online fraud didn’t exactly go to plan! It turned out the card that Barry had been given had already been stopped so therefore wasn’t working on the sites he tried it on.

“Attempt would be pretty much the right word. To be blunt, I ballsed it right up. I had a card from a chap I knew, he was a bit dodgy so he owed me some money and he gave me a card instead, so I thought, ‘hey ho. I’ll give it a try’. And there I was clicking here, there and everywhere without any idea of what I was doing. All of a sudden the website wouldn’t take the card.”

“People who want drugs don’t often have the money so they offer you other stuff. Once word got around that I was prepared to accept stolen credit cards, that’s what people brought to me.”


“I felt a bit confused, you know, about how it all worked. I’m not a big computer bloke, as you can probably tell, so I didn’t really know what I was doing.

“If I want power tools, I either use a website that I know sells good ones at a good price or I use Google to find one. Nothing more complicated than that.

“All that computer stuff, it’s all double-Dutch to me. When I started I didn’t know anything about it. I just thought I’d give it a go.

“Now they call me the king of the internet.”

This arrogance led him to continue buying and selling goods purchased using fraudulent credit cards. Due to his lack of technical knowledge, Barry found himself using the knowledge of his friends to help him commit fraud.

“I always ask my mates, you know how to go about this without getting busted and he gives me a list of dos and don’ts that I follow to the letter.”

Although his knowledge about internet fraud increased to the extent where he was the self-proclaimed ‘king of the internet’ he still needed help to commit his crimes. When asked, he got very cagey about giving us more information, apparently worried we would end up in a life of crime ourselves!

“I’m not the one that drags a nice young lady like yourself into the world of crime, or you could put it about, you know, to all the wrong people and all the loopholes would get closed.”

Although Barry has now moved onto an honest living, it is interesting that he does not question the morality of what he did and what others are still doing with regards online fraud.

“If you don’t know how it’s done and I tell you and it stops that’ll be down to me. What about all those poor buggers out there who live off this sort of thing?”

Getting through website defencesBarry was aware you needed a cardholders’ address so he had a nifty way of getting hold of that.

This is a good reason for retailers to check other personal characteristics such as IP address or if the individual is on shared fraud alert databases.

“I had all that on the driving licence. The lad that passed them to me had pinched the wallet, so I had the lot.”

The Internet – ‘God’s wonderful gift’Barry mentions the ease of the internet and how he used it to escalate his crimes.The internet allows Barry to feel more detached about the crimes he is committing and he also finds it much easier than committing crime in physical shops.

The internet is mentioned as being something you can do easily and even when you’re bored, watching television!

“God’s wonderful gift to the working criminal is the internet. Why go out and get your hands dirty committing crime when you can sit at home and do it in the comfort of your own home.

“Can you see me running around the shops? It’s not my sort of crime.”

Like taking candy from a babyBarry mentions that the ease of fraud might be one of the reasons for the escalation in card not present fraud.Retailers need to ensure they have adequate protections in place to ensure that fraudsters aren’t finding their sites easy to defraud.

“I saw how easy it was and thought, ‘oh well, it’s no wonder that fraud’s soaring.’ I expected it to be far harder.”

Lacking technical knowledgeBarry didn’t start his fraudulent career with a wealth of knowledge behind him.Unlike the fraudsters we have interviewed in the past, who knew which sites had the lowest defences, Barry would just use Google to find an appropriate site.Barry’s knowledge of security measures such as AVS or 3D Secure was also lacking quite significantly.

This shows just how easy it is for someone with little or no knowledge of website security to scam ecommerce sites for vast sums of money over a prolonged period of time.

Although initially he lacked the knowledge necessary to commit fraud, his confidence levels soon soared.


Fraudster B: Barry

Moving into online gamblingA friend mentioned that it might be worth getting into online gambling as it could provide a new revenue stream for Barry.

Barry then becomes very coy talking about the logistics of using gambling sites, partly as his friends are still using them for committing online fraud. However from his cryptic conversation we can gather he was laundering money online.

When questioned about whether he could have technically been traced through a chain of payment processors he mentions the lack of policing.

“At first I thought it wasn’t a go-er. I could see how I could gamble but not how to get money out so it seemed rather pointless to me.”

Grassed upEventually after a few years of using stolen cards to commit fraud, Barry was ‘grassed up’ by someone.

It’s interesting that he wasn’t caught because he slipped up purchasing goods online, but because of his collaboration with someone else.

After a brief rant, he seems quite resigned to the fact he was caught. It turns out that “the only safe way to do it is not to tell anyone”. Quite often partners can use past criminal activity as revenge.

“When I was first arrested, I said that I’d taken the cards as payment for drugs. I couldn’t deny having them and I couldn’t get round the dealing drugs thing, so I’d just as soon come clean and get a discount for it.

Turning over a new leafSo now Barry has given up his life of crime for his family. When asked if he thinks he will stick to it, he says:

“I hope so. It’s not easy when everybody I know is into something or other dodgy, but I’m doing my best.”

Barry is now on the straight and narrow and gone into a car business. Although old habits die hard...!

“I’ll probably even pay tax and all that!”



Gender: Male

Age: 24

Previous convictions: None

Length of time active in fraud: Doesn’t think he’s involved in fraud

Conviction: None

The dark side of technologyIn stark contrast to Amy and Barry, Charlie’s knowledge of computers and security systems is very comprehensive. He completed a degree in computer science and became interested in the security systems side.

“I always had this romantic image. You know, us being David and them being Goliath. I thought it would be fun to get one over on the big corporations.”

It was this thrill of the chase that led Charlie into information packaging and the so-called dark side of technology.

Information is kingWhile working on his university dissertation, Charlie realised the importance of information flow and how it can be exploited.

“I mean, all that information floating around in cyberspace. You can never get it back. Once it’s out, it’s out.

“It’s to be exploited - so that’s what I did. It’s just knowledge is power. The man who holds the information is the boss.”

Supply and demandCharlie realised there was a distinct market out there for packaged information and he soon started providing that information for a fee. With his skills he was able to use the internet to bring together all the information his clients required.

“Well, it worked out firstly what people wanted and then what they were prepared to pay for and then I resolved some kind of tariff and worked out how to get it for them. Nothing more complicated than that. Supply and demand.”

Charlie’s pricing is based on the nature of the job his client has requested. The less information publically available, the harder and longer the job will be. Therefore the pricing would be worked out accordingly.

“How long is a piece of string? It depends on how easy it would be or how difficult and how quickly you want it.

“It might take me five minutes or it might take me a week. The fee relates to the timescale.”

“I mean, all that information floating around in cyberspace. You can never get it back. Once it’s out, it’s out.



Skating close to law breakingThroughout the entire interview, Charlie is adamant that he has not and does not break the law in any way.

Charlie states that as it’s just information that’s publicly available and it’s not illegal packaging up this information and selling it on.

“I don’t actually break the law. I know what the law is and I don’t break it. I might skate close to it, but I’ve never broken the law.”

He simply sidesteps the legality issue by “respecting the privacy of people who come to me”. As long as it remains none of his business he can skate around the legality of the issues.

Distancing himself from the moral issues“Do you know what? Once I’ve delivered the information, I couldn’t care less. That’s it, that’s where I draw the line.”

Charlie continues this debate by comparing what he packages up and sells on, to retailers selling knives.

“If you go into a shop and you know, buy a knife and stab someone with it, they don’t go to the shop and hold them liable.”

Charlie is very keen on ensuring that even if there were changes to the law that he stays on the right side of it.

“I’d change to make sure I was always law-abiding. That’s really important to me. I’m not some criminal.”

Knowledge is powerAs expected, Charlie is extremely knowledgeable about a lot of the security issues facing ecommerce sites, especially in comparison to Amy and Barry. This is his response when asked whether he had heard of address verification.

“I mean, I don’t want to be rude but I probably know more than you do. It’s widely used but quite a vulnerable security measure based on the numbers from your address.”

Charlie mentions that to remain at the top of his game he ensures he keeps up to date with all the industry developments including schemes such as 3D Secure.

The future of fraudCharlie believes it’s hard to predict what the next fraud trend will be. But he does mention the ease of fraud which is a theme running through all the case studies.

“Distance transaction, auctions, gambling, shares and all that kind of thing. More and more people are going to realise how easy it is and how it’s going to get bigger and bigger.”

A lot of retailers are finding themselves out of pocket when banks chargeback fraudulent purchases and Charlie believes banks are going to get stricter in the future as fraud levels continue to rise.

“If you want a bit of a tip, the next big issue is that banks can’t keep covering losses made by fraud and the consequence, the knock-on effect will push back to retailers or customers.

“Because you know, it’s getting suffocated, especially with all the other financial stuff so, they’re not going to keep carrying the losses.”


The Fraud Managers

Job role: Fraud Managers

Sectors: Various retail sectors including electronics, fashion, travel and DIY

Previous convictions: None

Length of time active in fraud: All very experienced amassing hundreds of years between them

Our client list includes nearly half of the IMRG Top 50, with many of the quotes that follow from high-performing retailers as well as smaller, sole traders. All quotes and brands have been anonymised.

Fraudsters’ techniquesFraudsters will always try and find a way through a site’s defences. One online lingerie retailer has identified a number of fraudster techniques that they are currently trying.

“Fraudsters have started slightly changing personal information such as address, or phone numbers. For example, they may try mis-spelling an address, or changing a digit in the phone number. They are trying to avoid matches against known fraudsters in our database.”

The extent of fraudThe National Fraud Authority currently puts plastic card fraud at £341 million a year¹. But there’s anecdotal evidence to suggest the actual extent of fraud could be higher.

A small online clothes retailer says:

“We stop between one and five fraudulent attacks a day and these can vary greatly in order of size, from £20 up to larger orders over £500.”

A leading online departments store says:

“For every fraudulent order that we get hit for, we prevent a further eight fraud attempts.”

The size of fraudA leading online alcohol retailer refused 197 orders within a four-month period due to suspected fraud. The average transaction value was £300, with one attempted fraud order as high as £2,000!

An online trade store found that implementing identity verification solutions

has saved them tens of thousands each month on costly chargebacks and attempted fraudulent orders.

“We are now saving an average £45,000 a month in chargebacks. The return on investments to our company of employing technology is nearly 10,000 per cent. The cost of paying to verify customer identity is easily outweighed by the cost of not doing so.”

Fraudsters can be pretty cleverFraudsters will spend a lot of money on carding forums buying their stolen identities and want to ensure not only that the cards are working but that they can beat the website defences.

“We found that fraudsters will first test the card on charity sites to ensure it hasn’t been stopped. After that they will try out the stolen cards on our website for differing amounts to see what the cut off for further checks is.”

...And sometimes are either brave or stupid...Although in general fraudsters are a clever and manipulative lot, fraud managers have identified the odd one or two who are a few marbles short.

“We had one guy in particular who had a strong Nigerian accent and pertaining to be from Glasgow. He was trying to convince us that he was called Gordon Mackey despite being unable to pronounce his surname.”

...or are just plain stupid!“We had an order placed under the name of a Mrs Jones for a number of high-risk goods. When we called the phone number to verify the order, a gentleman answered the phone and when we asked to speak to Mrs Jones, said we could speak to him about her order. We said this wasn’t our policy and we needed to speak to Mrs Jones herself. He went to get her, before coming back on and talking in a high-pitched voice and claiming to be Mrs Jones. Needless to say we rejected the order.”

What do fraud managers have to look out for in the future?As mentioned, fraud is an evolving beast and fraudsters will also attempt to stay one step ahead. The best defence for the fraud manager is to have a variety of identity verification tools at their disposal to ensure they stop fraud but at the same time allow their valuable customers to continue shopping.

New emerging techniquesThe rather sweet sounding “friendly fraud” is certainly on the rise. This is a technique where the customer uses their own credit card and then issues a chargeback on the order for non receipt of goods despite having received them. These goods are then either sold on or kept by the consumer and the retailer finds themselves minus their goods and with a costly chargeback.

Top tips from our fraud managers...“The order doesn’t seem to fit the address it’s going to. For example, we have found them trying to order five compressors for delivery to a tower block.”

“Watch for delivery of parcels to hotels or NCP car parks.”

“Not surprisingly, we find that goods within our premium ranges are targeted more often than not. In these cases we undertake more stringent checking of the individual.”

“Deliveries before 10am have a high incidence of fraud.”

“If the main billing address is particularly far from the delivery address, then this can raise some suspicions. For example a billing address in Moscow and shipping address in London.”


Ex - Detective Inspector Roy West

Police force: Retired from City of London Police

Time in service: 35 years

Experience: Special Branch, surveillance and fraud

Roy and his team have saved the banking system millions during the past five years. Roy has worked hard on developing relationships with the banks and credit card companies as well as the Dedicated Cheque and Plastic Crime Unit (DCPCU) and retailers themselves.

Using “controlled deliveries” to target the fraudstersHow a controlled delivery works…

1. By working closely with retailers and the banks, Roy was informed of when a suspected fraudulent order had been attempted. He then had a short period of time to decide if this was something that his team could use as an opportunity to conduct a controlled delivery and arrest a fraudster.2. The police will work with the delivery companies to deliver the order the fraudster has made.3. Once signed for, the police will then immediately gain entry to the property, seize all the goods and arrest the individual.

Securing a successful prosecutionDepending on the goods, Roy made a decision as to whether it would work as a controlled delivery.

“A guy called Tony bought an extremely expensive watch and the retailer realised that he was a fraudster, so we organised a controlled delivery. We let the chap take the package in the house and then we came storming in straight after. We caught him standing in the middle of the room staring dumb-founded at a box that had two rolls of Sellotape in it. Game over.

“They don’t know what to say and they can’t do anything about it. That’s why it’s the best possible way to do it and the best possible evidence. They can’t get away with saying it’s not my address!”

The hot list for fraudstersGoods can range from air-conditioning units to fencing, or even whole kitchens.

“Anywhere where they think they can get something for nothing. Obviously they want the biggest and the best, be it the latest iPod, or a 60-inch LCD TV. However, they will take anything they can get their hands on and know they can make money out of.”

Roy has found that fraudsters certainly have exquisite tastes.

“Fine wines from France are a big one at the moment. This tends to be West African fraud and they either order over the phone or the internet using stolen credit cards or false cheques.”

Although this fraud has an international element to it, Roy gets involved as the deliveries tend to be completed in the UK. Sadly Roy finds that controlled deliveries in this instance don’t often work.

“The fraudsters seem to sense when we will be doing a controlled delivery. They will track the order and if there’s the slightest delay they will jump ship.”

One that didn’t get away…Fraudsters are very good confidence tricksters and will often be able to pull information out of call centre staff without them realising. Roy found that one such fraudster, Janet was able to do just that.

Janet hit one retailer in particular with mail order fraud. She was able to get the name, address and catalogue number of the individual through someone on the inside. She would then ring up the call centre to get the address changed on the account. When asked certain security questions she would find ways to pick up as much information as possible and then use that information when she next called up. Anything from how much the last transaction was placed on that order to mother’s maiden name and date of birth. Janet eventually took over 100 different accounts with the fraud escalating to well over £500,000.

Interestingly, Janet had no prior convictions.

“Everyone on the estate knew that Janet was the lady to go to get a new Dyson or flat screen TV.”

“Anywhere where they think they can get something for nothing. Obviously they want the biggest and the best, be it the latest iPod, or a 60-inch LCD TV. However, they will take anything they can get their hands on and know they can make money out of.”


Once a fraudster…Maybe it’s the rush of knowing you have one over on the system or maybe they just like decorating their homes in extravagant accessories, but one thing Roy has found is that they don’t want to stop!

“Janet is a perfect example. After she had been charged, she jumped bail and started doing it all again!”

Roy heard word that a very similar modus operandi to Janet’s was surfacing again and it appeared she was getting a couple of accomplices to take delivery of the goods. On one occasion when Janet’s house was searched, it emerged she had the address of the delivery property written on a piece of paper in her handbag.

“Excellent evidence and another £6,000 worth of fraud on top of what she had already stolen. We reckon she’ll get around four years for it.”

Credit crunch timeAn increase in unemployment and rising living costs is certainly fuelling an increase in fraud as more individuals find it an easy way to survive.

“The current economic climate is already starting to pull fraudsters out and they are trying out lots of new and different methods of defrauding. Anything that’s fast with quick gains and lots of money.”

A new scam is taking out car insurance online with a stolen credit card for a car such as a Porsche. After a couple of weeks the fraudster cancels the insurance and asks for the refund to be sent to another debit account and they walk away from it with a tidy sum in their pockets.

“One of the larger insurance companies lost over £500,000 via this scam. Many companies do no checks at all, as compared to the rest of their losses and they feel their fraud is minimal. In this current climate no organisation can afford to lose vast sums of money to fraud and as a consumer, I would rather not have another £10 stuck on my premium.”

Catching them red-handedRoy worked on around 150 different cases all at different stages in the process. One of the most satisfying parts of the job though is catching the fraudsters at it. When they arrested Janet at her house they were amazed by the décor of the place as it had been very tastefully equipped with all the latest designs and gadgets courtesy of someone else’s credit cards.

A recent case of Roy’s involves a young chap called Freddie who lived in an exclusive part of London with his parents. At 25 years old and working in IT, he used to purchase all manner of fraudulent goods with stolen cards bought from carding forums.

He had been doing this for two years before he was finally caught. A small one man band retailer had sent him a 60-inch LCD TV a couple of weeks before and got a chargeback on the card. Freddie hadn’t realised this and decided to order himself a DVD blue ray worth over £2,000. Roy then turns up on his doorstep and arrests him to find over £1,000 worth of stolen goods within the property.

All of this shows why Roy urges retailers to share their fraud experiences to prevent further losses. This fraudulent address had been used for two years and no retailers had picked it up. The retailer who was charged back lost £2,500 on the television and for a small company that could be enough to send them bankrupt.

Unfortunately there can be a heavy cost when retailers chose not to protect against fraud.

“Retailers need to share their data! Sadly this was the case for a small kitchen company. A fraudster bought a £40,000 custom-made kitchen using a stolen card. A simple identity check would have identified this individual as a fraudster but nothing was completed. The resulting chargeback forced the retailer out of business.”


Case solved

Fraudsters are constantly evolving their techniques to evade website defences and eventually cost businesses thousands. We believe by staying one step ahead and aggregating various databases to ensure we stop them and safeguard your profits in a tough economic climate.

Age verificationFor those operators/retailers who need to verify that their customers are over-18 for age-sensitive goods, we can ensure you comply with relevant legislation.

Global identity checking• Name, address and date of birth verification using databases such as Electoral Roll, telephone files, directors’ reports and credit reference header files.• Address verification for 237 countries worldwide.• Credit reference header files for UK, Germany, USA, Sweden and Canada.

Document checkingVerifying whether ID documents from around the globe covering passports, travel documents, driving licenses and ID cards are all valid.

Fraud screening• Shared fraud alerts database with suspected and reported fraudulent data from leading retailers and online gaming companies.• Fraud screening solutions providing retailers with a risk score on each transaction depending on more than 250 positive and negative rules.

Safeguarding your customersWe realise the importance of not turning away your valuable customers due to overly stringent checks or an altered customer experience. This is why all searches can be integrated seamlessly into your website without affecting the customer experience.

¹Annual Fraud Trends - NFA - March 2012

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