A New Holiday Buying Season – A New Fraud

A New Holiday Buying Season – A New Fraud

This is the biggest shopping season of the year and online shopping is growing geometrically. Time is crunched which means credit card statements often aren’t scrutinized. Now, more than ever, everyone needs to be vigilant with their credit card statements as a brand new fraud has surfaced.


In the past when fraudulent charges were made on a credit card, thieves started with very small items at Walgreen’s ($1, $5, $10), then increased charged amounts in small increments.


The new fraud is different.  An example, from a colleague, shows how creative fraudsters are getting. In this example a person had a charge from Bloomingdale’s for $1,500. Then the $1,500 was credited a few days later. The credit card holder didn’t notice.  But Bloomingdale’s took an additional step and sent the customer a letter stating they received the returned merchandise and had credited the account. That raised a red flag as he hadn’t purchased items from them in quite some time. He called to inquire about the purchase. They told him the item was returned and it was a woman’s fur-lined coat – an odd purchase for a Floridian. He called UPS and was told the shipper (supposedly him) called to change the shipping address in mid-shipment, thus sending the package to a different address and one that did not match the billing address.


He started to watch his account daily. One week later a charge from Michael Kors for $800 appeared and one week after that a charge of $1,100 from Modi Operandi appeared. When he contacted Modi Operandi they researched the purchase and found the first name used for the purchase was incorrect but the purchase was still approved by the credit card company (MasterCard). That shipment was still on route. Modi Operandi was able to cancel the shipment and changed their policy to disallow changes to the shipping address once the package is shipped.  But other stores are slower to act so it is up to the buyer.


Research into this suggests that this fraud is being done with MasterCard accounts which leads to the conclusion that MasterCard may have been hacked. But, whether it is MasterCard or a different card is not the issue. Everyone needs to carefully review each item on their credit card statements all year long, but particularly at this time of year.


New and creative frauds are being conceived every day. Get ahead of them and help your loved-ones do the same.