Just when you thought you have seen it all, a new type of online auction and online marketplace scam bubbles to the surface. This one is called triangle credit card fraud because three parties are involved or impacted by the scam.
First party – the seller (aka “fraudster”). The seller offers a product for sale through an online auction or marketplace. The seller sells the product to a buyer that has no knowledge of the scam.
Second party – the buyer. They buyer purchases the product from the seller and receives the product in the mail. He has no idea he was used to facilitate a scam. Everything looks legit to the buyer.
Third party – the manufacturer of the product. In order for the scam to work the seller has to deliver the product to the buyer so he orders it from the manufacturer. The seller places the order with the manufacturer using the buyers shipping information and another person’s stolen credit card information for billing. To the manufacturer it appears the item was purchased as a gift. Remember, the seller used different billing and shipping information to purchase the product from the manufacturer.
The holder of the stolen credit card receives his statement showing the fraudulent charges. He contacts the credit card company and reports the discrepancy. The credit card company issues a chargeback for the purchase. The manufacturer is out the product and the payment. The seller walks away with the money and he buyers credit card information to use for his next scam.
Here are a few tips so you don’t become the next triangle credit card fraud victim.
- Only buy from legitimate sellers. Check references and complaints online.
- Use a credit card only, not a debit/credit card, when shopping online
- Monitor your credit card statement EVERY month for possible fraud
- If you detect fraud cancel your card and get a new account
