Assessing the habits and tactics of organized credit card fraud gangs

By analyzing hundreds of criminal forums, Digital Shadows discovered a new trend in the form of remote learning ‘schools’. Available to Russian speakers only, these six-week courses comprise 20 lectures with five expert instructors. The course includes webinars, detailed notes and course material.

organized credit card fraud gangs

An advertisement for the WWH online course

In exchange for $745 (plus $200 for course fees), aspiring cyber criminals have the potential to make $12k a month, based on a standard 40-hour working week. Given the average Russian monthly wage is less than $700 a month it means cybercriminals could make nearly 17x more than a ‘legitimate’ job.

The criminal code

Interestingly, a criminal ‘code’ appears to exist on many of the Russian-origin carding forums, whereby no Russian card details are permitted for sale.

The criminals are going after a potentially lucrative market. In just two of the most popular ‘carding’ forums 1.2 million card holder details are on sale for an average of $6 each. However, prices do vary dependent on the level of security associated with the card and cardholder.

The least expensive cards are those requiring further authentication to ‘cash out’. The main obstacle to this is the PIN of the cardholder, which can be tricky and time-consuming to find out. Therefore, there exist automated services which call cardholders in an attempt to scam their details using social engineering techniques.

Social engineering

Social engineering is given a heavy emphasis in the courses. Advice is given on how to manipulate people through knowledge of their local area in order to build rapport with the target and trick them into exposing information (such as PIN numbers), usually over the phone. As the instructor puts it “that’s why I always advise to watch the news because with such incidents, it is possible to play beautifully.”

“The card companies have developed sophisticated anti-fraud measures and high-quality training like this can be seen as a reaction to this”, said Rick Holland, VP Strategy at Digital Shadows. “Unfortunately, it’s a sign that criminals continually seek to lower barriers to entry, which then put more criminals into the ecosystem and cost card brands, retailers and consumers. However, the benefit is that the criminals are increasingly exposing their methods, which means that credit card companies, merchants and customers can learn from them and adjust their defenses accordingly.”

Main groups of credit card criminals

The research found that credit card criminals fall into four main groups (with some overlapping between each):

Payment Card Data Harvesters – do the ‘dirty work’ in terms of harvesting the payment card information. This is done through intercepting card holder’s information whether this be through point of sale malware, skimming devices, phishing, breached databases, or through operating botnets

Distributors – are the ‘middle men’ who typically make the most money. While the criminals who harvest may use the card data themselves, they also sell it on to others who will package, repackage, and sell on the card information

Fraudsters – run the most risk in terms of getting caught by law enforcement or being conned by fellow criminals. Once fraudsters have acquired payment card information from their distributor, the fraud can happen. These individuals tend to be less technical and attract a lower calibre of cybercriminal, often relying on online guides and courses to learn the latest techniques

Monetization – There are many different roles within the stage, including those who have been duped into operating drop addresses and those involved in the reselling of fraudulently acquired goods

Holland continues: “This ecosystem is highly complex and international. At each stage, it creates victims – from the card industry that loses $24 billion a year to consumers who are frequently duped into revealing their card details. One of the key themes that stood out for us is the level of ‘social engineering’ criminals are now using. Aggressive and manipulative phone calls to victims to reveal PIN numbers is just one example of this.”

organized credit card fraud gangs

A dark web forum post discussing hotel fraud

Five tips for merchants

1. Learn about latest techniques. Criminals will do what they can to avoid friction. If certain banks have better anti-fraud measures, the instructors recommend avoiding them. Understand what makes carding difficult. 3D secure, for example is an additional layer of security deployed by Visa and Mastercard, is proven to be a real obstacle for criminals.

2. Make security as important as user experience. There must always be a balance between security and user experience, but online merchants should be aware that criminals are turning to mobile apps to commit payment card fraud as it provides them with less obstacles.

3. Monitor for mentions of cardable sites. Criminals share lists of cardable sites; if your company name crops up, it’s a good indication that you are experiencing fraud. Companies can search with the help of Google Alerts or open source web crawlers like Scrapy to look for mentions of their brands.

4. Train your staff and your customers. Remember that the most advanced methods all involve social engineering.

5. Don’t be part of the problem. Cashing out is only one small part of the fraud; the harvesting of credit card information is required first. Protect your customers’ credit card information by storing the information securely and ensuring payment software is patched.

Five tips for card providers

1. Detect phishing with DNS Twist. Proactively monitor for permutations on your domain name, which could help you to detect any criminal seeking to harvest information from your customers.

2. Understand threats against your customers. Monitor the activity of banking trojans, such as Trickbot, to identify patterns in their targeting and techniques used to gain access to your customers’ computers.

3. Monitor for AVC shops for BINs and IINs. Monitor for Bank Identification Numbers (BINs) and Issuer Identification Numbers (IINs) that are offered for sale. In many cases, it is possible to free text search and filter by BIN numbers.

4. Monitor IRC checking channels. Monitor IRC checking channels for BINs and IINs that are indicative of a criminal testing an individuals’ card.

5. Benchmark yourself against peers. Understand which card providers fraudsters recommend not using, and use this to understand where your company stacks up.