Con artists are finding new ways to make a fortune on cardholders who don't bother checking their credit card statements.
A credit card and gift card scam racked up more than $100,000 in losses in one case alone. Postal Inspectors say the nationwide scam is simple and starts with stolen credit card numbers.
“We believe it was through either an online chat room where they purchased these credit card numbers or an employee at a local merchant,” explained U.S. Postal Inspector, David Gealey.
Next step: Con men go to a store that sells gift cards, grabs several worth $500 each and then proceeds to the checkout counter. There, they come up with a phony reason why their credit card can't be swiped through the machine.
“They tell the clerk something must have happened to my card, it’s damaged my dog chewed on it whatever it may be… they would get the clerk to manually put the card number into the system. Once they did that the transaction was completed,” explained Gealey.
With the gift cards in hand, the con men would make a phone call transferring the money on those cards to a prepaid debit card.
“Once they transfer those funds, they are as good as cash to them they can go to any merchant or a bank and obtain cash. In 5 – 10 minutes they obtain $2,500 in cash,” said Gealey.
Postal Inspectors were able to learn the intricacies of the scam through surveillance tape.
“They would never actually give them the card to the clerk when they actually asked for it… oh here I’ll just read you the number, they would cup the card, and the clerk is just punching in the numbers,” said Gealey.
Once they discovered the scheme, inspectors were able to cross-check the time of the transactions with cell phone records and credit card statements to nab the con men.
“All three of the suspects ended up pleading guilty to Access Device Fraud, one of the individuals pleads guilty to Aggravated Identity Theft, and of all the prison terms the shortest was one year,” added Gealey.
Postal Inspectors say the best thing you can do to avoid being a victim of this scheme is to closely monitor your credit card statements and activity. Inspectors say “very few” of the victims in this case even knew their credit card numbers had been compromised.