Five Threats to Financial Services: Part Four, Payment Card Fraud
August 14, 2018
Payment card information is the lifeblood of the cybercriminal ecosystem. In previous blogs in this series, we’ve focused on how cybercriminals acquire customer banking information using banking trojans and phishing campaigns. However, this merely represents the initial steps that form one part of a wider payment card fraud network. This post focuses on the three steps fraudsters turn to in order to monetize these stolen payment cards. Banks can learn from these steps to inform their own defenses.
How Cybercriminals Use Stolen Payment Cards
Step 1: Learn the latest techniques
As fraud defenses evolve, cybercriminals similarly adapt their tactics to avoid detection and increase their fraud success rate. One such example is the emergence of the Genesis Market, an online marketplace that provides a way to imitate the browser of a victim in a bid to evade fraud solutions. Genesis (shown in Figure 1) has been in development for several years and is currently in Beta mode, but has gained positive reviews across carding forums over the past few months.
Figure 1: A screenshot from the Genesis market
There are many ways fraudsters can learn about the latest trends and gain tips for conducting their activities. Last year we published a whitepaper, Inside Online Carding Courses, on a professional e-learning carding course, complete with webinars, instructors and reading material. The increased professionalization and sophistication of this fraud has negative implications for credit card companies, merchants, and consumers. The course, which costs attendees $1000, included modules advising the best cards to target and which geographies to focus on. By studying these courses, banks can gain an understanding of the extent to which their customers are popular targets for fraudsters.
Figure 2: A translation of the advertised online learning course for carders
Step 2: Buy payment cards from a reputable site
While it’s possible that cybercriminals who harvest payment card information may commit fraud themselves, it’s more common to bulk sell this data to a distributor. Online credit card shops, also known as Automated Vending Carts (AVCs), play a crucial role in selling stolen payment cards. These shops buy bulks set of payment cards and sell them on piecemeal to wannabe fraudsters. AVCs have vast numbers of payment cards for sale, with those in the United States by far the most popular (Figure 3).
Figure 3: Cards for sale on C-v-v[.]su
Most AVCs will often provide a “checker”, an automated feature to check if the card is still active and determine its balance. For those purchasing cards on a site that lacks payment card validation, another method used to check the cards is an Internet Relay Chat (IRC) room for a nominal fee of $0.15. This serves as a reminder that criminals do not need to cash out to make money from carding – there’s plenty to be made from support services too. Banks can monitor for mentions of the Bank Identification Numbers (BINs) to detect early stages of fraud.
This industry attracts the ire of law enforcement and there have been some notable arrests and seizures. AlphaBay, a dark web marketplace that had its own automated credit card shop, was seized over a year ago. Shortly after, members associated with the Infraud Forum were indicted. Most recently, on August 1st, 2018, the US Department of Justice filed criminal charges against three men reported to be associated with the organized criminal group known as FIN7. Despite these clear successes, it would be naïve for us to assume that this spells the end for AVCs.
Step 3: Commit payment card fraud and cash out
With the latest techniques learned and valid payment cards purchased, the final stage is to “cash out” and monetize this data with one of three main tactics:
- Direct Purchase of Goods. Fraudsters use sites that are cardable (susceptible to fraudulent purchases as a result of lax security controls) in order to make fraudulent purchases with stolen payment card information. Criminals collaborate and share lists of cardable sites that individuals can turn to that allow goods to be purchased with stolen payment cards. The carder will then purchase goods and resell them for a reduced price in order to receive clean money.
- Agent Fraud. A carder impersonates a hotel or airline agent, makes a reservation in the cardholder’s name, waits for the card to authorize, and then changes the reservation name. Social engineering is central to this approach.
- Drops and Middlemen. As demonstrated by FIN7, cybercriminals register fake companies that search for unemployed and vulnerable people to take seemingly legitimate jobs as a “Merchandising Manager” or similar. This job involves reshipping fraudulent goods and counterfeit money to safe addresses. Just as with agent fraud, social engineering is key. The websites must look convincing in order to sway the individual to work for the bogus company. It is also a reminder to us that just because a website has https, does not mean it is a legitimate website.
Fighting Payment Card Fraud: En Carde
Cashing out is the final stage within a vast payment card ecosystem. Often criminals will target retailers’ websites to monetize this information, but there are plenty of steps banks can take to detect this fraud and the different stages of the fraud lifecycle. There are three ways banks may gain visibility into payment card fraud:
- Benchmark yourself against peers. Understand which card providers fraudsters recommend not using and use this to understand where your company stacks up.
- Monitor IRC checking channels. Monitor these channels for Bank Identification Numbers (BINs) and Issuer Identification Numbers (IINs) that are indicative of a criminal testing an individual’s card.
- Monitor AVC shops for BINs and IINs. Monitor for BINs and IINs that are offered for sale. In many cases, it is possible to free text search and filter by BIN numbers.
With billions of dollars lost to payment card fraud each year, these steps can help to reduce fraud against your organization. You can read more about cashing out in our whitepaper, Inside Online Carding Courses.
In the final blog of the series, we’ll look into the threat of hacktivism for the financial services industry.
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