More than 1 million consumers have been hit with one-time bogus charges on their credit and debit cards totaling $10 million – and the payments routed to scammers in Eastern Europe and Central Asia, according to a complaint filed by Federal Trade Commission.
The victims were mostly identity theft victims from the United States, but many may not have even noticed the micro charges, ranging from 20 cents to $10, the FTC said.
The defendants in the case used phony company names that were similar to real companies. They opened more than 100 merchant accounts with companies that process charges to consumers’ credit and debit card accounts, according to the FTC complaint.
The FTC has not determined how the defendants obtained the stolen identities or the credit and debit account numbers.
“The defendants also cloaked each fake merchant with a virtual office address near a real merchant’s location, a phone number, a home phone number for the ‘owner,’ a Web site pretending to sell products, a toll-free number consumers could call, and a real company’s tax number found on the Internet,” the FTC said.
The FTC alleged that the defendants recruited at least 14 “money mules” – people in the United States that set up 16 dummy corporations, open associated bank accounts to receive the card payments, and then transfer the money overseas. Consumers’ payments were sent to bank accounts in Lithuania, Estonia, Latvia, Bulgaria, Cyprus, and Kyrgyzstan.
The FTC identified the defendants as16 sham companies – API Trade LLC, ARA Auto Parts Trading LLC, Bend Transfer Services LLC, B-Texas European LLC, CBTC LLC, CMG Global LLC, Confident Incorporation, HDPL Trade LLC, Hometown Homebuyers LLC, IAS Group LLC, IHC Trade LLC, MZ Services LLC, New World Enterprizes LLC, Parts Imports LLC, SMI Imports LLC, SVT Services LLC – and one or more persons who are unknown to the agency at this time.
The FTC obtained a court order to freeze the defendants’ assets and ordered them to stop operating, pending final resolution of the case.
Here is the FTC’s complaint.
