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New Online Scam Hits Travel Industry

A pair of first class flights to the Caribbean for £300 may look like an unmissable bargain on an online auction - but consumers will be buying into more than they realise when they become embroiled in a new type of online fraud scam - known as triangulation. ClearCommerce, the leading provider of fraud prevention and payment processing solutions for online retail has identified a scam known as triangulation, which involves buyers obtaining goods ranging from first class tickets to the Bahamas to camcorders from legitimate retailers, but paying the fraudster for the goods.

Fraudsters often originating from the Eastern European block are advertising for high value goods that they do not own at heavily discounted prices.  This obviously attracts a lot of attention from bidders.  Once a bid has been accepted the fraudster will place and order from a legitimate retailer using stolen credit card details, and arrange for the goods, for example, the too-good-to-be-true plane tickets, to be delivered to the customer.  At which point the customer pays the fraudster, typically using wire transfer or a P2P service (rather than the retailer) for the goods.  As the fraudster is able to book the tickets in the customer’s correct name, rather than using details from the stolen credit card, the customer only realises that s/he has been involved in a fraudulent transaction when they are contacted by the retailer once the chargeback has been received.

Alan Smith, Business Development Director at ClearCommerce Europe commented: “Online auction crime is on the increase with the number of complaints to the Federal Trade Commission skyrocketing from a mere 107 in 1997 to approximately 77,000 in 2003.  The situation is exacerbated by the fact that many online auction sites do not place a limit on the number of items a seller can promote on the site so there are literally hundreds of new scams being uploaded everyday.”

Alan Smith concluded: “With so many people wanting to take these long-haul, traditionally expensive holidays, any opportunity to travel for a fraction of the real cost is understandably inviting.  However, potential buyers need to take care with whom and how they deal with individuals on the internet as this type of crime is funding organised gangs likely to be linked to other criminal activities.  All cardholders should also make a point of checking all items listed on their statements for any unusual transactions - if they want to avoid becoming another statistic.”