Posts Tagged ‘illicit activities’

Holiday shoppers need to watch out this year for yet another red flag that might indicate fraud. Gift cards purchased with stolen credit cards have been sold online as a tool for money laundering.

Picture this: Your credit cards are stolen. The thief then uses your credit cards to purchase gift cards from Wal-Mart, Target or any other store. He doesn’t want to actually use those gift cards because they might have been flagged as fraudulently purchased, so he sells them on eBay or Craigslist or any other Web site for a discount off the actual face value of the cards.

Consumers think that they’ve found a hot deal when they purchase a few gift cards at 50 percent of their value, but are shocked to discover that the cards are useless. The original card holder has reported his credit cards stolen, which has subsequently flagged the gift cards. If you fall into this trap, you’ve just put money in a scam artist’s pocket.

The beauty of this scam is that regular consumers with no thought of deception sell gift cards every day. They receive cards from stores where they are unlikely to shop, so rather than letting them go to waste, they sell them at a discount online so they at least walk away with some money they can use. So how can you tell the scam artists from people who just received gifts they didn’t want?

A big red flag is the sale of numerous gift cards at once or over a short period of time. This is a serious indicator that the seller is using stolen credit cards to fund his sales, and you should at least consider that he might be into money laundering. Check out the seller’s past history if you’re using an auction Web site such as eBay, and stay clear of him if most of the previous sales have been gift cards.

Money laundering might also be afoot if you find gift cards for sale that are significantly discounted. Since the seller is using stolen credit cards, he wants to dump the gift cards as quickly as possible. To facilitate the sales, he might mark them down by as much as 75 percent; why would a legitimate seller take that much of a hit?

This holiday season, you might be better off paying full price for gift cards at individual retailers rather than purchasing them online. Stolen credit cards are a serious problem in this day and age, and you don’t want to help money-laundering scam artists — even unwittingly — to line their pockets.

See also: Online Resale of Gift Cards Raises Fraud Alarms, ABC News

Steve Thompson

Using a credit card for access to an Internet pornography site is perfectly legal as long as the content available for viewing is also legal. Still, Internet porn sites regularly use electronic money services, some of which are more professional than others, to accept their credit cards, rather than accepting payments directly. Some of these electronic money services make it extremely difficult to cancel membership at Internet porn sites, while other more secure payment systems (such as CCBill or Epoch) make it relatively fast and easy. Here is some information consumers should know before using a credit or debit card to purchase access to an Internet pornography site.

Beware the “Free Trial”

Some Internet pornography sites offer a free or inexpensive trial period, which usually lasts a few days. To take advantage of this offer, consumers must enter their credit card information. In the terms of service fine print the company states that upon the termination of the free (or inexpensive) trial period, the credit or debit card will be charged a monthly subscription fee. The monthly subscription fee is usually much higher than any fee paid for the trial period. To avoid paying the monthly subscription fee you must cancel your membership before the trial period expires. If the consumer forgets or cannot cancel the subscription within the free trial period, he will be charged heftily for the following month and any months that follow until the customer cancels his subscription.

Remember Your Contract Agreements

The consumer should always be aware that he is entering into a contract when purchasing access to an Internet porn site. That contract may provide for “recurring” monthly, quarterly or annual subscription charges. Unless the consumer cancels his subscription, his credit card or debit card will be repeatedly charged, regardless of whether he continues to access the Internet porn site.

Work Hard to Cancel Your Subscription

Canceling a subscription to an Internet porn site can prove difficult. Most Internet porn sites require the consumer to cancel his subscription at the electronic money service’s site rather than at the porn site itself. The porn site may offer insufficient information about how to cancel a subscription, which may frustrate a user into neglecting to cancel the subscription. Some frustrated customers ultimately cancel their credit or debit cards just to keep from being repeatedly charged.

“One company required user names and passwords and account numbers to cancel. I didn’t take down any of this information or save my emails when I signed up, so after a few months of trying to cancel my subscription, I finally just gave up and canceled my credit card,” says ‘John,’ an Internet porn consumer.

John is not alone. That’s why it’s important for any prospective consumer to adequately review the terms of service contract before purchasing access to an Internet pornography site. Specifically, the consumer should educate himself on (1) whether a subscription requires a one-time fee or a recurring fee; (2) how often and how much a subscriber will be charged; and (3) what needs to be done to cancel a subscription.

Jack Oceano

First and foremost: It’s illegal to gamble online in the United States. Those interested in gambling online should take the time to familiarize themselves with the legalities related to Internet gambling, and the rules followed by the Internet gambling sites they plan to patronize. Such sites often use loopholes in the law (or violate the law altogether) to allow gamblers in countries with tough laws to fund their bets. Here is some basic information on the laws concerning Internet gambling, and how some Web sites get around them.

The quickest and easiest way to fund an account on an Internet gambling site is by using a credit card or debit card. In fact, many Internet gambling sites reward customers who use a major credit card such as MasterCard or Visa to fund their accounts with bonuses of, say, 20 percent of their deposit. While European gamblers typically experience little trouble with this method, U.S. gamblers often find themselves out of luck because of the Unlawful Internet Gambling Enforcement Act of 2006 that pressures banks into prohibiting the use of their credit and debit cards for Internet gambling purposes. (This law prohibits the transfer of funds from a financial institution to an Internet gambling site, with some notable exceptions, e.g., horse racing, fantasy sports and online lotteries.)

Some Internet gambling sites use electronic money services to get around this dimple. A U.S. bank that does not allow money to be transferred directly to an Internet gambling site may very well allow money to be transferred to a third-party electronic money service, which takes a percentage and then feeds the funds to the Internet gambling site. Many of the most popular electronic money services have ceased serving U.S. residents.

By now, however, someone would have figured out a loophole, but the complex and ever-changing laws concerning Internet gambling are keeping U.S. residents from risking it. Although federal laws do not prohibit Internet gambling on games of chance, some states have specific laws prohibiting Internet gambling of any kind, including poker, chess and bridge.

Perhaps the most notorious example of Internet gambling gone wrong is the case of BetOnSports.com. That company settled a multibillion-dollar civil lawsuit after criminal racketeering charges were brought against the company and several employees, including its founder Gary Kaplan and former CEO David Carruthers. Many BetOnSports’ customers assets were frozen in the United States while the government wrangled with the company in court.

Other Internet gambling customers have lost their funds when Web sites suddenly went belly-up. Those who engage in or wish to engage in Internet gambling should do their research. Although there are no easy answers in the world of Internet gambling, researching state and local laws, as well as the laws of each site, will save U.S. gamblers time and money in the long run.

Jack Oceano