I came across an article this week about a Palm Beach County credit card fraud ring and it really caught my attention. It was about a fraud ring that was stealing and distributing credit cards in order to defraud local businesses.

Not only was this an instance of large-scale organized fraud—14 people have been arrested already—it is also interesting that the people involved were caught not because of the credit card theft, but were discovered in association with another crime.

CBS gave the details:

“According to documents filed in the case, ICE special agents in West Palm Beach started this investigation following a November 14, 2007, alien smuggling event that resulted in a death at sea. The goal was to identify and dismantle the alien smuggling organization. During the investigation, agents uncovered the massive credit card fraud and fuel theft ring described in the Indictment.”

This got me thinking about how online businesses manage to catch organized fraud. Because we know that online fraudsters are working together. (In a recent post we looked at the prevalence of botnets and their use in organized online fraud.) But how can companies tell when seemingly distinct instances of online fraud are actually all coming from one group of individuals working together?

This isn’t a simple process because online criminals typically use a diverse set of online identities and credit information. This is where fraud databases shared across many industries become powerful. Ask yourself the following questions:

1. If I identify an online criminal, can I easily identify other related online transactions and accounts that may be associated with this individual?
2. If an online business similar to mine is defrauded, can I benefit from that knowledge and use it to block future activity from the fraudulent computer and any related accounts?

If you answered “no” to either of these questions, then you might benefit from exploring a shared device reputation service that can answer these and many other questions. In the case above, authorities caught the criminals because they began looking into an unrelated crime and exposed the organized fraud ring from there. With the power of online intelligence, it makes even more sense that you should be able to do this for your own online business.

Tags: device reputation, Online Fraud

This entry was posted on Thursday, August 27th, 2009 at 3:02 pm and is filed under Online Gaming. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.