Visa and MasterCard Take Fight To Scammers

An anonymous reader writes "In his latest story, Brian Krebs reports on a collaboration between brand holders and credit card companies to shut down payment processing for rogue online pharmacies, pirate software sellers and fake anti-virus scams. By conducting test purchases, they map out which banks are being used to accept payments for which scams. Writes Krebs, 'Following the money trail showed that a majority of the purchases were processed by just 12 banks in a handful of countries, including Azerbaijan, China, Georgia, Latvia, and Mauritius.' These results are then fed to Visa and Mastercard who typically shut down the merchant accounts 'within one month after a complaint was lodged.' If you can't accept payments, you can't make money — and without money you can't pay the spammers who advertise your product. This effort is apparently quite effective and has led to much concern by those running such sites."

About time!

[tgeller]

This is wonderful, and exactly what should be happening. I have to ask why they didn't start doing this 20 years ago, though....

Follow the money

[Dan East]

Wow, they finally discovered the concept of "follow the money".

Re:I suppose it's good

[fustakrakich]

Roving bands of bandits, anyone?

Countered by FEMA (Blackwater) agents rounding them up, along with a 'statistically insignificant' number of innocents, and sending the survivors off to Gitmo.. which prompts the question, Which is preferable?

Bad. Wrong. Evil.

[girlintraining]

I'm sure everyone will yell "hip hip, horray!" to this, but it's bad for reasons that aren't obvious. When you have a financial network which has more or less a monopoly on electronic transactions making decisions about who can and cannot make transactions based on arbitrary criterion, the door is opened wide for abuse. Look at Wikileaks: They weren't "scammers", but Visa and Mastercard shut them down. PayPal has a long string of broken businesses and bankrupt individuals under its belt for indefinately seizing/freezing accounts based on suspicions. I'm not going to make a slippery-slope argument here, because it can only slope so far before it cuts into profit margins and such so much a competitor steps in to fill the void -- but we are tolerating a certain level of misuse of power whenever this is allowed.

It's like the internet: Most everyone on slashdot believes in network neutrality, that is, service providers shouldn't prioritize or limit traffic based on content. The same arguments apply towards financial providers, but look around on this thread: Everyone is cheering.

Actually, I lied. I will use a slippery slope argument... amply supported by history. People would cheer censorship of images of pedophilia. Or rape, etc. And as the human history has long shown -- once a service provider also steps into a gate keeper role, they will find more reasons. Soon, it has policies about racism, sexism, communism... and the list grows ever longer. Just like, say, strict liability in criminal cases... once upon a time, it was only used to prosecute in cases where intent simply couldn't be proved easily (if at all), but gradually, over time... it expanded and corrupted itself, so now people face stiffer sentences and fines for downloading music than manslaughter.

Anytime a service provider takes on the gate keeper role, even with the most noble of intentions, eventually it perverts and corrupts... it wears away until the decisions become arbitrary, and the rules cease to matter. Today, it's scammers... tomorrow, someone else will be added to the list. And then another. And another.

But something has to be done! the audience cries. Yes, I agree. Fraud is a crime in most jurisdictions worldwide. The rule of law means the government, not the service provider, says who is punished and how. This is a step backwards -- a step into vigilantism and away from civilization. It is of the most noble intentions, but it is still uncivilized. The proper authority is the government(s). Trials, judges, lawyers, a presentation of evidence, impartiality -- these things matter. Yes, even on the internet. Yes, even when it's scammers. Especially when it's scammers.

To advocate for the rule of law and justice, for civil rights, often requires we defend the worst of humanity. I step in here to defend the scammers, whom are of exceedingly low opinion on this forum, to protect everyone else. Stop it here, now. Do not support this action -- while in this one instance it may be the instrument of good, it is the traditional method by which free society is destroyed. Demand accountability, but demand it of the proper authorities, not the private individuals and corporations.

Naw...

[rsilvergun]

they won't bother rounding them up unless their inconveniencing the people that matter ($250k+/yr income last I checked). And strangely the real poor keep their misery to themselves anywhere I've ever lived. Right now I'm living in a ridiculously expensive part of town because I happened to have landed a nice job, but You can drive 10 miles from my apartment and find terrifying slums. The rich like to keep poor people close by to serve them, after all. But the funny thing is the poor don't spill out. That's mostly our drug policy. If you're poor you or someone you know is probably taking illegal drugs to cope with the stress of poverty, and the harsh (selectively enforced) drug laws let us keep the poor in their place. You'll notice the big push is for medical marijuana, not to legalize it. That's because it lets the rich have their weed and keep using the laws to oppress. We did it with the Chinese and opium.

Anyway, you'll still have roving bands of bandits unless you're in the 10%.

Re:I suppose it's good

[rsilvergun]

I'm not talking about the base line costs, but the % discount. Instead of being 80 - 90% it tops out at 50%. That's a tighter supply chain at work, and it's cheap computing power and communications that have made that possible. That, plus cheap data storage that lets you track everything and data mine it, so when a manager of a Walmart orders 100 extra bags of candy you know he did it and you can ding him on his performance review for it...

Pointless - takes too long

[Andy Prough]

So - the scammers are in business for 4-6 months on average before they come up on someone's radar for investigation. The investigation and following the money trail takes at least a month - maybe two. File a complaint, and voila - a month later, Visa and MC are shuttting down the scammer's merchant account.

Well - guess what? Most fraudsters shut down their operations and start a new one every 6 months on average. So - if it takes you 6-9 months to find and shut down their merchant account, you haven't accomplished anything really. They already made all the money they were planning to, and have already set up their next site and account. And, since there is almost zero capital investment required to set up a bogus payment website, these guys are making almost 100% pure profit for the time period that they had originally intended to. Also, they are re-sellling all the credit cards they process, and making money on the back-end.

Re:Does this affect legitimate online pharmacies?

[Goaway]

How do you even know this pharmacy is "legitimate"? Do you even know they are not just shipping you placebos?

Re:Bad. Wrong. Evil.

[girlintraining]

No, Wrong. Re read article. The payment networks are following Laws, rather than acting upon their own accord. If there were 5,000 payment networks, each one would have to comply in a simular fashion. If you don't like the laws, blame the lawmakers and citizens that voted for them.

I read the article. It details an internal process used by Visa and Mastercard to file and resolve complaints. Nowhere in the article does it detail the involvement of law enforcement. It's a policy, not a law. Direct quote: "The credit card associations have a standard process for accepting complaints about such transactions, in which they warn the online merchantâ(TM)s bank (including a notice of potential fines for noncompliance). After a complaint about such activity, the merchantâ(TM)s bank conducts its investigation, and may choose to contest the issue if they believe it is in error. But if the bank decides not to challenge the complaint, then they will need to take action to prevent future such transactions, or else face an escalating series of fines from the card associations." In fact, even the company spokesperson admitted it's an extra-judicial process: "âoeIt doesnâ(TM)t require a judge, a law-enforcement officer or even much in the way of sophisticated security capabilities. If you can purchase a product, then thereâ(TM)s a record of it and that record points back to the merchant account getting the money,' Savage said."

So I stand by what I said: This is a private corporation attempting to perform the duties and responsibilities that should be handled by law enforcement. It's vigilantism. Yes, it's wrapped in corporate policy, altruism, and wears a suit and tie. But Visa and Mastercard are still engaging in vigilante justice.

Re:Does this affect legitimate online pharmacies?

[Guru80]

Depending on the medication, the affects on you would let you know fairly soon. If it's for pain relief for instance and you aren't getting any, good bet you got scammed. However, if you are shipped placebos and they actually cure your pain, did you really lose? Rhetoric question, of course you did on value and taking unknown substances but if it really is just a water pill or whatever, you come out good if it actually cures your symptoms by not having to worry about the slight chance but possible harmful side-effects.

That's my ramblings for the time being.

Judge and jury?

[mstrcat]

I'm not at all comfortable with credit card companies making unilateral and largely black-box decisions like this. While it's true that having a Visa account is not a right, I'm expect them to provide services without making such decisions for me. I feel as if I have more to worry from Visa than I have from the people they claim are selling shady goods.

Re:About time!

[GPierce]

You can care all you please about the multi-resistant bugs those people are training, but it's mostly a waste of outrage. The bugs are being trained by corporate agriculture, and the residue from those antibiotics are being served up with every hamburger or pork chop you eat.

And at the same time, you are supporting a pharmaceutical industry that charges US consumers as much as the blockaded free market will bear.

In a corrupt system it's silly to pick sides - when there are no rules. there are no rules.

Re:Does this affect legitimate online pharmacies?

[TapeCutter]

Yeah, no real harm done if the asprin is for your headache, not so fine if the asprin is for your heart problem, or the antibiotic is for an eye/lung infection, or your surgeon discovers the saline is in fact tap water after cutting you open. Knowingly defrauding the frail and the sick is the act of a morally bankrupt arsehole, placebo effect or otherwise. - rhetoric answer.