eBay sends high-tech care package to Romanian cops

Romanian fraudsters are known as Vlads. Vlad Tepes, a Romanian prince, was the inspiration for the original Dracula story. Interestingly enough, some Romanians consider him a a folk-hero, who drove away invading armies. Photo courtesy of Flickr.

We hear a lot about Romanian organized crime being involved in fraud on auction sites. They are also well known in the world of payment (credit/debit) card skimming.

One of the more infamous Romanian fraudsters goes by the name of Vladuz. Vladuz openly mocked eBay for awhile, publically hacking the site and creating an uproar, but he seems to be laying low, recently.

Apparently, eBay is now providing Romanian law enforcement with technical resources. Ed Sutherland (AHN News) reports:

EBay is assisting Romanian law enforcement to detect and stop fraud targeting losing auction bidders. For months, the auction giant said a large portion of online fraud was coming from the Eastern European nation.

First noticed in 2005, criminals in Romania are taking advantage of a gap in the tech knowledge of local police to prey on eBay users that are outbid in auctions.

"The fraudster can see that a user that didn't win was prepared to spend $145 on a particular item," Matt Henley, part of eBay's Fraud Investigations Team, told News.com. The fraudsters knew most people used their email account name for their eBay username. The criminals would contact the losing bidder by email away from eBay, offering a second chance to obtain the item.

Since uncovering the fraud, eBay began hiding user names when bids exceed $80.

AHN story, here.

Here is a post, I did on a group that fights Romanian fraud on a volunteer level (although I hear they provide a lot of useful intelligence to law enforcement, also):

Auction Fraud and the Romanian Connection

Firemeg.com is also a good place to keep up on eBay fraud happenings, or other rants about eBay. Their site can be viewed, here.

For a lot of information on auction fraud, click here.

AOL has a collection of videos showing some of the hacking/fraud activity on auction sites, here.

buySAFE takes on the issue of counterfeit (knock off) merchandise

buySAFE bonds sellers after verifying they are reputable and honest. They also contribute their time to protecting the average person in the sometimes murky waters of e-commerce. Recently, buySAFE has been taking on the (huge) issue of counterfeit merchandise.

Consumers are protected when they buy from a merchant bearing the buySAFE seal. Not a very bad deal for the consumer! Bonding isn't free, but many merchants experience higher sales volumes after being accepted by buySAFE. Trust can drive a lot of sales! buySAFE is also a viable means for a merchant to protect their assets.

The Association of Certified Fraud Examiners noted in their last report to the nation that small businesses suffer "disproportionate fraud losses," when they are victimized by fraud. Large merchants can afford experts to deal with their fraud problems, however the cost is hiring experts can be restrictive for smaller merchants.

Of the numerous fraud issues found on auction sites, complaints about counterfeit goods rank pretty high. People buy items believing they are the "real deal," only to discover the item is a (knock-off) counterfeit.

Companies, who sell respected and trusted brands, are impacted by a loss of sales and consumer trust in their products, also. Some of them have already filed civil litigation against eBay because of the amount of knock-off (counterfeit) merchandise being sold on the site.

Even though auction sites offer seller rating systems, these ratings are often compromised when seller accounts are hijacked (taken over). eBay and PayPal (by most accounts) are recognized as the two most phished brands out there.

The intent of most of these Phishing schemes is to obtain personal/financial information to steal money (and or) take over legitimate accounts.

This can also happen when malware (crimeware) is inserted into an unprotected system and personal/financial details are stolen, normally using key logging software. Sadly enough, the criminal element has found it pretty easy to remain anonymous on auction sites, and few of them seem to get caught.

Whenever the Anti Phishing Working Group (APWG) releases a new report, both of these activities seem to set a new record that surpasses the previous one.

Recently, eBay seems to be taking the fraud problem a lot more seriously, but someone using the name of "Vladuz" is intent on proving their systems are easily compromised. A good place to keep up on the Vladuz saga is firemeg.com.

Although a good information source, I'm not certain that bashing Meg is the solution to fraud on auction sites.

Being the largest auction site, eBay is targeted by fraud all the time because of their popularity.

Fraud has already migrated to other auction sites, but they will always target the most popular.

The reason for this is simple (and it's only business for them) - there are more victims to harvest in popular places.

The term "Vlad" was based on a Romanian historical figure, Vlad Tepes, who inspired the novel, Dracula. In recent times, the term has come to signify fraudsters from Romania, who are well established and organized in the world of auction fraud.

Besides, protecting merchants and consumers, buySAFE makes a lot of contributions to addressing fraud issues on auction sites. Most recently, Jeff Grass (buySAFE CEO) has posted a lot of educational information on his blog about the counterfeit problem, here.

Jeff also appeared on the Today show, when they did a piece on counterfeit goods.You can view a clip of the show, here.

And the Today show isn't the only place that considers buy Safe’s views on the counterfeit problem important. The French government recently included buySAFE as part of a U.S. delegation (including government experts) to discuss the problem of counterfeit goods.

The INTERNATION ANTICOUNTERFEITING COALITION (a non-profit) sums up the problem when they state:

Counterfeiting is big business.It is estimated that counterfeiting is a $600 billion a year problem. In fact, it's a problem that has grown over 10,000 percent in the past two decades, in part fueled by CONSUMER DEMAND.

The real truth is people who purchase counterfeit merchandise risk funding nefarious activities, contributing to unemployment, creating budget deficits and compromising the future of this country in the global economy.

IACC site, here.

Part of the reason the activity has grown 10,000 percent is probably due to the explosion in e-commerce, especially on auction sites.

buySAFE seems to be doing a little more than just selling a product. In fact, they seem to be exercising some corporate responsibility by educating the public on fraud trends in the rapidly growing world of e-commerce.

Consumers can become a member of their Smart Buyer's Club, which leads you to a lot of good deals (safe to buy), here. Club members accumulate points, which can be redeemed for goods, or services (listed on the site).

Anyone claiming to be a buySAFE merchant can be verified, which can be done on the site, also.

FBI is going after Internet crime in Russia and Romania

A lot of experts believe that carder forums (selling stolen personal and financial details) are run overseas by Romanian and Russian organized crime.

Nate Anderson (ars technica) wrote an interesting article about this, where he said:

One American in Virginia, who goes by the Internet nick "John Dillinger," agreed to cooperate with "vendors" from Eastern Europe. These groups "acquired" credit card numbers, then sent them by e-mail and instant message to Dillinger, who then encoded them onto credit cards. He then took these credit cards to ATMs and made cash withdrawals; a percentage of the money was then sent back to the "vendor" and Dillinger kept the rest. Dillinger was eventually busted by the feds, though, and was sentenced in February 2007 to 94 months in jail.

This is a good example of how the Internet is enabling a global identity theft crisis.

Apparently, the problem is big enough for the FBI to send assets to Romania and Russia to go after the problem.

Of course, since most of the stolen information comes from the West, I guess that it means the Russians and Romanians are sending assets abroad or recruiting them there, also.

Nate's article, here.

In the past few days, 6 arrests in Florida are being tied into the TJX data breach (which might be the largest known compromise) to date.

Although, no one seems to be saying for sure, I doubt the six arrested are the main players in the TJX breach. They probably purchased the information, elsewhere.

The total damage being reported in the Florida case is $8 million. The case was identified when the perps made some (extremely) large gift card purchases.

Maybe that's why they got caught, or they got (slightly) greedy?

IT also probably isn't entirely fair to keep publishing the TJX breach. Personal and financial details have been stolen from a LOT of places. The known places can be viewed at attrition.org, here.

This is a global problem and it's going to take a global effort to put a stop to it!

Romanian Second-Chance eBay Scammers Busted

The federal authorities are charging twenty-one Romanian fraudsters, who scammed a lot of people in second chance auction scams. According to the federal authorities, the scam was active for about three years and a lot of the victims lived in the Chicago area.

From the article, it was one of the (now) notorious second-chance scams, where a person is given a second chance to win an auction and asked to wire money to a distant locale (in this instance Romania).

Of course, once the money is wired, the person who sent it, never receives "fair value" for their hard-earned money. Please note that wiring money is a "common ploy" in all sorts of Internet scams. I would take a deep breath, when asked to wire money on a transaction (normally overseas) that seems a little "too good to be true."

In this instance, the federal authorities are asking for people, who think they might have been victims to come forward:

Anyone who believes they may have been a victim may e-mail inquiries to usailn.victim.witness@usdoj.gov. Include your name, address, phone number, 10-digit Western Union Money Transfer Control Number, amount transmitted, date funds were provided and the name of the individual to whom the funds were sent. Victims may also call a toll-free hotline number for updates about the case – (866) 364-2621.

Second chance scams have been active on auction sites - you can read all about them on Google, here.

Western Union has a page warning people about wiring money to people they don't really know, here.

I read about this on CBS2chicago.com, who has more details on this story, here.

Romanian Illegal Immigrants Install ATM (Fraud) Machines

(Older picture of a skimming device)

Illegal immigration isn't a "victimless crime" and the work they are performing doesn't always help the economy. Apparently Romanian illegal immigrants are installing fake ATM fronts - used to steal debit-card details - for the very same criminal organizations that helped them get into the United Kingdom, illegally.

Justin Penrose of the Sunday Mirror (UK) is reporting:

They have developed a high-tech ATM front which looks exactly like the original - and it steals a victim's details in seconds.

The new cashpoint fascia is so convincing that gangs are selling it to other crooks for £10,000 a time.

The covers even have a sticker which warns customers to watch out for fraudsters. When a victim uses an ATM it records details while a camera videos the pin number. Within seconds these details are sent to a laptop and a cloned card is made. Several wealthy Romanian "godfathers" run crooked empires from their mansions in the Balkans.

Sunday Mirror story, here.

The article also states that these new and very convincing ATM fronts are being produced and sold to other criminal organizations.

I wonder how long it will be before this new "skimming device" is exported from the United Kingdom? In the past couple of years, debit-card fraud has become a worldwide problem.

This reminds me that the best defense against ATM skimming is to always cover your PIN when doing a transaction!

Here is a previous post about the growing problem of debit-card fraud:

Debit Card Breaches, A Growing Problem

And here is an older post, I did (with pictures) of a skimming device:

ATM Machines That Clone Your Card

If anyone has a picture of one of these new devices, please send it to EdwardDickson@SBCGlobal.net.

Auction Fraud and the Romanian Connection

(Interesting picture courtesy of Yahoo Group, eBay_scamkillers)

A lot of Internet crime seems to either come from Romania, or is tied into nationals from that country. Yesterday, I was reading about an arrest in the Los Angeles area, where two Romanians were indicted for auction fraud involving wire transfers and identity theft.

Courtesy of U.S. Newswire:

The indictment alleges that Manolache, Salageanu and others were involved in an Internet scam that defrauded victims across the United States by holding bogus auctions on eBay, Yahoo! Auctions and Autotrader.com. The conspirators posted items for sale that were never intended to be sold, then collected money from the "successful" bidders. The victims were instructed by the online sellers to send their payment by Western Union to circumvent online payment systems. Manolache and Salageanu then went to Western Union locations in the Los Angeles area and, using false identification, collected the victims' money. None of the victims received the items they had purchased.

As part of the scheme, the online sellers often masqueraded as Hurricane Katrina relief organizations.

Newswire story, here.

It seems that a lot of the intelligence used to go after Manolache and Salageanu was compiled by the Internet Crime Complaint Center (IC3). They have a page dedicated to this (Romanian) activity, which says:

Auction fraud is the most prevalent of Internet crimes associated with Romania. The subjects have saturated the Internet auctions and offer almost every in-demand product. The subjects have also become more flexible, allowing victims to send half the funds now, and the other half when the item arrives.

Internet Crime Complaint Center page, here.

And there are private individuals, who are fed up with auction fraud originating from Romania. Yahoo group, eBay_scamkillers is one such group comprised of volunteers that actively fight the Romanian scammers.

Here is what they say about their group:

Too many people are being rejected because they fail to properly identify themselves. If we even THINK you are a Romanian, you will be rejected. Take a moment to send a note to the group owner.

We share resources, baiting techniques and, of course... war stories! It's OK to lurk here, but why not join and help us SCAM THE SCAMMERS?

If you are a whiner, please do not join this group. There are plenty of eBay anti-scam forums where people can go to cry on each others' shoulders about their misfortunes.

WE ARE PRO-ACTIVE and WE ATTACK THE SCAMMERS ON MANY FRONTS. We use every available resource to fight back and we are VERY successful.

Link, here.

At first look, the site appears to be fairly inactive, but if you are accepted (after their screening process), they contact you.

Auction fraud is one of the biggest issues in the world of Internet crime. On an interesting side note, this recent indictment also highlights that not all auction fraud occurs on eBay. A lot of the complaints on these two Romanian nationals were from Autotrader.com and Yahoo! Auctions.

There has been a lot in the news lately about flocks of eBay users seeking "greener pastures." It will be interesting to see if "auction fraud" follows them.