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Feds: $10 Million Stolen in Massive Credit Card Scam

The Federal Trade Commission just busted up an elaborate and long-running international scam said to net more than $10 million in bogus nickel-and-dime credit card charges. More than a million consumers were hit with credit card charges of $10 or less by fake shell companies, said the agency.

It was an elaborate ruse that may have been going on for four years. The perpetrators set up phony companies to charge small amounts to legitimate consumer credit and debit cards, said the FTC. It's not clear where they got the card numbers, but they may have actually done credit checks on the consumers to make sure the card numbers were legit before they charged them.

It's the latest in a long line of cybercrimes, and one more bit of proof that it's almost impossible to stay ahead of the criminals. As soon as the Feds bust up one scam, another one pops up. And while it's good work the FTC did on this one, it took several years and many millions before they shut it down.

Who wants to wait that long while they build their next case? Here are some ways to protect yourself from cybertheft now. If you're alert, you may even be able to help the FTC catch the next wave of bad guys.

  • Check your statements carefully. Look at every credit card bill and bank statement, and don't let small charges go by. (As a matter of fact, why didn't these charges, some as small as 20 cents, arouse suspicion?) If you see a charge you don't recognize, call the company number listed on your card. If all you get is an answering machine (that's what happened to the scammed in this particular case), contact your card issuer or bank and dispute the charge.
  • Know Your Scams. If you at least know the latest fad frauds, you are better equipped to fight them. There's a wide and creative variety of fraudulent activity out there, including everything from the Nigerian email scam to animated greeting card malware to eBay auction fraud to phony identity theft protection. (Did you catch that? Phony identity theft protection? Re-scamming the previously scammed is a time-honored tradition, as is preying on fear. For more on the pros and cons of buying identity theft protection, check out the advice offered by my MoneyWatch colleague Ray Martin. )
  • Don't respond to email pitches. Phishing still exists. That's where a fake company poses as a legitimate one, emailing you a request that you sign into the web site and conduct business. If you click on the email, you'll get sent to a fake website, which will collect your ID and password and then use it to clean out your actual account. If you get email from your bank or credit card company, simply use your browser to go directly to the web site of the bank and see if a similar request is pending. If not, leave a comment for your bank's customer relations department and they will likely investigate the possible fraud.
  • Keep your receipts. That way you'll be able to match up your actual charges with the ones that show up on your bills. And you'll make it harder for crooks to steal your credit card number in the first place. Many of those thefts still take place near restaurant and retail trash bins and sidewalk recycle buckets, and not online. So keep your paperwork close to you, and shred it when you're done.
Photo by jepoirrier on Flickr.
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