Violent drug gangs increasingly turn to credit card thefts as big moneymaker
Less and less gangs are feuding over drug wars, and turning more and more to less deadly credit card fraud to make money, according to NYPD officials. They report they are devoting more resources to target repeat offenders and gangs carrying out these scams, including adding detectives to grand larceny squads in each borough, as well as having gang squads conduct raids to try to get suspects off the streets. The raids often involve catching them in the act in more serious offenses like weapons or drug possession. Surveillance videos from recent schemes show how often gangs are using credit card fraud to fund their operations. One recent video taken at a big box retailer showed suspected gang members using one stolen credit card to purchase multiple iPads. Other videos show how suspects use parking meters, fast food restaurants or taxis to test stolen card numbers; once the card is approved, the suspects move on to other locations.
“These gang members are tech-savvy,” said NYPD Chief James Essig. “They are wizening up, and they realize street violence only brings more heat on them.” Investigators said some of the money raised is used to buy weapons or pay for vacations or expensive cars. Some suspects even post videos on social media showing off alleged trips or purchases allegedly made using bogus credit cards. Retailers want banks to increase chip technology and require pin codes for credit card transactions to help cut down on fraud. The Federal Trade Commission cites national studies that show about $15 billion is stolen from more than 13 million consumers each year.
As for the NYPD, they say that going after street gangs for drugs and violent crimes still makes the most sense because it makes communities safer and jail time is often more severe. Fraud investigations are detailed and labor-intensive, and arresting a gang member for credit card fraud alone can often result in penalties of probation or a year in jail. Still, fraud arrests continue to grow in New York, as are the number of street crews getting into the credit card fraud business. And with the NYPD putting on additional pressure, investigators say they see street crews increasingly venturing out to the suburbs and exurbs where smaller departments have fewer resources to try to counter these rip-offs. [For more: NBC New York News]
Where’s that sweater you want to buy? High-tech tags help retailers track it down
RFID tags may finally be taking hold. In just the last two years, the share of apparel retailers using or piloting RFID technology has doubled, according to a 2016 survey by consulting firm Kurt Salmon and you will almost certainly see more of them.
The technology isn’t cheap. But retail industry experts say the potential to bring some perks of online shopping to brick-and-mortar stores while making it easier to keep up with impatient, time-pressed customers is convincing more companies the tiny tags are worth it. Old-school inventory tracking methods, relying on employees hand-counting product on the sales floor, are too time-consuming to do often enough to provide the kind of accuracy retailers need to reliably tell customers whether an item is in stock at a local store or fulfill online orders from stores, industry experts said. RFID technology takes out much of that legwork.
About two years ago, before active wear-maker Lululemon Athletica’s push into the technology, the company internally tested its buy online, pick up in store service in New York. More than half the time, Lululemon was unable to fill the test orders because of supply issues, Jonathan Aitken, the company’s information technology director, said at a retail industry trade show last month. “That’s a terrible guest experience,” Aitken said.
Information from the techie tags also helps Lululemon keep sales floor displays stocked, and when a size or style does run out, employees use handheld devices to check whether an item is available without going back to the storeroom. Shoppers can get the same information through the retailer’s app, which Aitken thinks boosts sales since customers won’t assume products not found on the rack are sold out. Early adopters already are working on more creative uses for the technology. [For more: Chicago Tribune]
Michael Jordan’s Steak House part of hotel’s data breach
We earlier reported that Intercontinental Hotels had been one of the latest victims of a data breach. More information indicates restaurants and bars at 12 InterContinental Hotel Group properties, including in Chicago, reported a data breach involving people who used credit cards from August 2016 to December 2016. Customers at Michael Jordan’s Steak House Chicago, brunch spot Center Court and Eno bar at the InterContinental Chicago, are impacted, according to a statement issued by the hotel group.
The hotel chain launched an investigation after reports of unauthorized charges on some payment cards used at the properties. Cards used at the front desk of these properties were not affected. An investigation of other properties in the Americas region is ongoing, the hotel said. The hotel hired a cyber security firm that determined that malware was installed on servers that processed payment cards used at restaurants and bars. The malware searched for track data (cardholder name, card number, expiration date, and internal verification code) read from the magnetic stripe of a payment card as it was being routed through the affected server, the hotel said. [For more: ABC7 Chicago]
Sophisticated shoplifting gangs are costing US retailers $30 billion a year
Organized Retail Crime (ORC) continues to hurt retailers, and shows no signs of letting up. It may not have the grit and the glamour of film noir, but one of today’s most elaborate strains of organized crime drains about $30 billion from US retailers annually, and without much consequence.
ORC affected 97% of the 67 American retailers surveyed by the National Retail Federation in 2015, and four out of five of them said that it’s getting worse. Though only crocodile tears may be shed for corporate giants like Walmart and Target, the massive theft of items like teeth whitening strips, laundry detergent, and energy drinks across the US can really hurt small businesses, and shoppers’ wallets. In some cases, it is even limiting access to much-needed items.
The National Retail Federation defines ORC as large-scale theft or fraud with the intent to resell items for financial gain. It can include everything from smash-and-grabs or the production of counterfeit products, to elaborate inside jobs involving company employees. In increasingly organized ways, fleets of “boosters” (industry slang for shoplifters) target an area and pluck shops dry of crucial yet pricy items—popular goods include baby formula, allergy medicine, and pregnancy tests. Then, goods are listed for sale online on sites like eBay and Craigslist, and on Facebook groups–or simply returned to the retailers they were stolen from, a category of hoodwinking called “return fraud.”
In 2014, “return fraud” during the holidays cost major retailers $1.9 billion, and 71% of those surveyed by the National Retail Federation experienced return fraud by ORC gangs. The process usually involves producing counterfeit receipts and returning stolen goods for hard cash, store credit, and gift cards that can be converted to money in Coinstar machines or online. “They know what they’re doing. They have this down to a science,” said Robert Moraca, the vice president of loss prevention at the National Retail Federation. “The insult is that the retailer has stuff stolen from them and then they have to buy it back.”
[For more: Quartz Media]
Javelin, Visa offer different takes on whether card fraud is moving online
Different methodologies may account for differences in numbers and opinions. According to a report released last week by Javelin, card-not-present fraud went up 40 percent this year, but according to a new report from Visa, there has been no increase in online fraud. The increase in card-not-present fraud was part of a general increase in fraud, reported Javelin.
“We’ve been measuring fraud for over a decade and this past year is very significant because we hit a record high as far as the number of victims of identity fraud,” said Al Pascual, research director and head of fraud and security at Javelin Strategy & Research. The Javelin study is based on a survey of about 5,000 consumers,” he said. “Visa data is based on millions of actual transactions. That is a very important distinction.”
Javelin defended its numbers. “We conducted our independent study and are reporting on number of victims of CNP fraud in 2016, in this case,” said Pascual. “Our findings are consistent from what we have heard from others in the space, including merchants, issuers, and other networks.” The Visa report also went into more depth about the status of the EMV migration.
As of the end of the year, 39 percent of all merchants and 49 percent of the payment volume was on chip-enabled terminals, said Visa’s Ericksen, and counterfeit fraud was down 52 percent at the merchants who made the switch. The number of chip-enabled Visa cards in circulation nearly doubled over the course of the year, to more than 408 million, and the number of merchants with chip-enabled terminals more than doubled, to 1.8 million. [For more: CIO]
Dollar General plans to create 1,000 jobs in Georgia in 2017
Dollar General is planning to create 1,000 jobs across the state of Georgia this year with the addition of new stores as well as a new distribution center. The Goodlettsville, Tennessee-based company said in a news release that it wants to add 1,000 discount stores and create about 10,000 jobs across the country in 2017. News outlets report that Dollar General currently has more than 700 stores and more than 5,000 employees in Georgia. The growth plan in Georgia includes opening a new distribution center in Jackson. The land, purchased in May, sits in Butts and Spalding counties, south of Atlanta. Gov. Nathan Deal said in a statement last year that the center will create 500 jobs. The company has not given further details about where the new stores will be. [For more: AP Big Story]
LP Worldwide: Employee stole £330,000 which she blew on gambling habit
Bosses at a construction company have described their “utter disbelief” after a trusted and respected colleague stole more than £330,000 (US $413,390) from the firm to feed her online gambling habit. Beverley Pearce, 54, was jailed for 32 months at Cardiff Crown Court on Friday after stealing funds from Brecongate Building Solutions.
The defendant had worked at the company for 16 years as an account manager and paid herself up to five times a month from the company accounts. From 2011 until her theft was discovered in 2016, Pearce had taken a total of £339,817.82 from the company account she had exclusive access to. The court heard she had blown the money on an online gambling addiction. Brecongate’s managing director Paul Jones said Pearce was capable at her job and had earned the respect of her colleagues before her criminal behaviour was uncovered. “She was experienced and very competent at her job,” he said. “When it was discovered what she had done, it was devastating, we were in utter disbelief.”
The company’s commercial director Ryan Powell added: “Initially we didn’t know the extent of it, we just felt like we were dreaming, like it wasn’t reality.” The magnitude of the theft was only unearthed when another employee noticed 90 unauthorised transactions from the company had been made to the defendant. She emailed an apology but it was “too little, too late.” At that point the police was called and that was the last time they saw their trusted employee of 16 years. [For more: Wales Online UK]
When a data breach happens, will California pay for protection?
California law makers are looking at a new law that would require the state government provide ID Theft protection or mitigation services in the event of a government data breach at no cost to those affected for 12 months. Assemblyman Matt Dabaneh said the idea is the central purpose of the reintroduced Legislation. State law already extends the same requirements to businesses or individuals put the measure, AB 241, forward.
The legislation would potentially impact hundreds of thousands of records and millions of Californians in future years. Between 2012 and 2015, the state Attorney General said it received reports of 657 data breaches that involved the personal information of more than 500 California residents, according to the California Department of Justice’s 2016 data breach report. Government accounted for 5 percent of those breaches and 2 percent of total records breaches between 2012-15, the report said. For big breaches, offering identity theft protection is costly. In 2015, the federal government spent a reported $133 million to provide ID theft protection services to an estimated 21.5 million people whose personal information was stolen in the much-publicized hacking of the Office of Personnel Management.
In a separate incident, Utah spent millions of dollars for two years’ worth of ID protection when Social Security numbers were stolen from the state’s health department. Dababneh introduced legislation nearly identical to AB 241 in 2015. That bill (AB 259) stalled in Appropriations. A committee analysis found Dababneh’s legislation in 2015 would incur “potential major costs in the tens to hundreds of millions of dollars, depending on the scope of a data breach to any of various state agencies.” Further findings from that analysis:
Even one event affecting 100,000 individuals could result in potential costs of $12 million to $36 million (General Fund) to provide credit-monitoring services for one year. Based on information surveyed from credit monitoring services, bulk enrollment costs for credit monitoring services in which the vendor is provided with a complete list of individuals at once from the breached entity generally range from $10 to $30 per month per person ($120 to $360 per year per person), depending on the type of monitoring package offered by the vendor. [For more: Government Technology]
The post Breaking News in the Industry: February 9, 2017 appeared first on LPM.