Not all stolen accounts bought on the dark web have a pinned payment method. Often fraudsters have to buy stolen credit cards on the dark web. They can buy them in several places, although the most popular are dedicated shops with stolen credit cards. Less popular are darknet markets (they are like eBay with illicit merchandise), dark web forums, or directly from stolen card vendors using communicators - this option is used usually when 2 sites of a transaction know each other well. Buying good-quality credit cards is one of the keys to success. In the dark web, business reputation is everything, so fraudsters usually go to the most reputable places such as Joker Stash shop (which was closed in March 2021). If a fraudster buys a stolen credit card from an uncertain source, they risk all their effort, time and money going to waste.
In this step a fraudster goes through various products, just to end up browsing gift cards or other digital merchandise. While looking at each of these products they view its details, opinions, photos, and look at similar products. Again they add around 10 of them to the basket, among them will be a gift card that is their final goal. Each product should be viewed on a different tab. After they gather 10 products in the basket, view each of them again for 10-15 seconds and discard them. They continue this until only a gift card is left.
If a fraudster is successful, they receive a gift card to an email account registered only for that purpose. There are two main ways of using this gift card - to sell it or use it. Fraudsters can always take a risk and sell it on legal platforms or ultimately sell it on the dark web. And here we must mention that selling non-working gift cards is one of the most popular scams on the dark web. Yes, fraudsters scam each other very often. It is easier to scam other dishonest dark web users than to fraud an online shop, so many fraudsters chose this method of making money. Most dark web citizens know that so it is hard to sell stolen gift cards for somebody who doesn't have a good reputation as a seller. For this reason, in the dark web you can find wholesale buyers who purchase stolen gift cards from other fraudsters and then resell or use them.
Defrauded digital gift cards can also be sold on dark web markets. Here is a Netflix gift card on a [now defunct] darknet market. It could be bought using various cryptocurrencies: Bitcoins, Monero, Litecoins or Bitcoin Cash.
Gift cards are one of the most popular holiday purchases and remain in demand year round. A recent survey reported that 83% of consumers intend to purchase a gift card this holiday season. 51% anticipate spending between $50 and $100 on gift cards, while 24% say they will likely spend between $500 and $5,000.
Unfortunately, fraudsters like gift cards too. There are a variety of schemes they can employ to take advantage of the fact that gift cards have few of the security features that modern credit cards do. Many of these schemes will result in chargebacks, with the merchant left holding the bag. But there are ways for merchants to protect themselves and reduce their revenue losses.
It makes sense that merchants would want to offer gift cards. Customers want them, they increase sales, and they can be a good marketing tool. That doesn't mean that gift cards are all upside, however.
The rapid rise in e-commerce due to COVID-19 brought with it a rise in purchases of online gift cards. More people than ever were suddenly looking for an easy way to send a gift to friends and family they might not see in person, and delays throughout the US postal system made many people wary of purchase gifts that would have to be shipped.
There are two types of gift cards: open-loop gift cards that can be used with any merchant, such as those from Visa or Mastercard, and closed-loop gift cards tied to a single merchant. Most of the information here will apply to both.
If a customer ever wants to return a product and asks to have it refunded to a gift card, watch out. It could be part of a scheme to extract untraceable funds from a stolen credit card. Here's how it works:
This method of fraud can be easier to get away with during the holidays, as customers returning gifts might have a legitimate reason to request their refund be put on a gift card rather than returned to the original method of payment.
Fraudsters simply use stolen credit card numbers to buy gift cards online and use or resell them before the merchant gets hit with the inevitable chargeback. This is one of the easiest ways for a fraudster in possession of stolen payment credentials to make a quick profit.
A more reliable way for fraudsters to wring actual cash out of a stolen account is to buy mass quantities of gift cards, which can be used immediately. Most merchants would benefit from putting a system in place to automatically flag large or repeated gift card purchases for review.
Fraudsters may also copy down the card numbers and activation codes on cards still on the sales rack, using stickers to cover up any scratch-off coverings they removed. As soon as an honest customer purchases and activates one of the cards, the fraudster can start using it.
Because gift cards are a common target for fraudsters, merchants may choose to require additional authentication steps for gift card purchases. It's also wise to block or require additional authentication for purchases over a certain amount or when multiple gift cards are purchased with the same payment card or from the same IP address.
In order to obtain additional customer information, merchants could choose to require the recipient of a gift card to create an account before using it. While many merchants avoid implementing this requirement more broadly over fears of cart abandonment, that's not an issue with closed-loop gift cards.
Merchants should have a way to tie a chargeback on a gift card purchase to the individual gift card number and either block or void the balance on the card. Note that while this is usually permitted as long as the original purchaser of the gift card has been refunded, laws regarding gift cards vary by jurisdiction.
Gift cards have become a popular gifting option, as they save people from the hassle of choosing gifts and allow recipients to purchase items of their choice. The gift card market has seen a steady growth over the years due to the growth of e-commerce as well as greater adoption by corporations that present gift cards as recognition to their employees. As a result, gift cards continue to provide retailers with a profitable and brand-building revenue stream.
Poised for growth at an estimated CAGR of 15.4%, the global gift cards market size is expected to reach $1,922.87 billion by 2027, up from $619.25 billion in 2019. These growing numbers are attracting fraudsters, which is resulting in the rising instances of gift card fraud.
Gift card fraud refers to using gift cards over cash to commit fraudulent activity. Fraudsters exploit both gift cards and prepaid cards due to the ease with which they can be manipulated. With an increase in the number of people now choosing gift cards as holiday gifts, fraud is only increasing
Fraudsters use botnets to brute force attacks on gift card websites by testing thousands of card numbers and PIN combinations per minute. They also use bots, sweatshops or click farms to continually check the card balances and redeem them. They hack into a user account and abuse the auto-load feature to drain the account of the funds. Once fraudsters are successful in their account takeover attempts, they can redeem the credit card points by requesting for a gift card and escaping with the money undetected. This is because gift cards do not require the kind of authentication that a credit card or a bank account would.
This is the simplest method of gift card fraud where fraudsters use stolen credit card details to buy gift cards online and exhaust their value or resell them before a chargeback request is made by the victim.
By hacking into a gift card company's database, fraudsters can steal the gift card numbers and their activation codes. Fraudsters often use brute force, malware, or phishing to access the database. They monitor the gift card account's activity at the retailer's online portal and as soon as the cards are paid for and activated at the checkout register, they steal the money.
Fraudsters make fraudulent purchases using stolen credit card details and then return the product requesting the refund to a gift card. While the merchant loses twice - the transaction amount and the chargebacks - the fraudster decamps with the gift card that can be monetized fairly easily.
Gift cards are popular with scammers because it is not only ridiculously easy to monetize them, but also there are slim chances of getting detected or prosecuted. When compared with credit cards or bank accounts, the protections for gift cards are far lower and there are no authentication barriers. In fact, gift cards are more like cash - once used, the money on them is gone.
Although the dollar amounts associated with a gift card is low, when orchestrated at scale, the profits can run into millions. As a result, with more and more consumers opting for gift cards, fraudsters have followed suit.
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