Virtual “Stolen” Credit Cards??
For more than a year now, a shocking underground scheme has been building steam and no one seems to be paying attention. eBay, Paypal, Google, and many online providers utilize credit cards as a means of verifying identity. Makes sense right? Charge a few smaller transactions, typically less than $1.00 and if the user can verify the charge, then they must be legit. It’s an interesting system of two way authentication that has served the ecommerce industry for several years now, but it’s broken–and with no one watching, the possibility for a wide scale problem is massive.
This is how it works. You sign up for Paypal or eBay but they require a credit card which you would rather not provide or simply don’t have if you live in some countries. So you search the internet or any one of hundreds of webmaster-oriented forums selling VCC’s or Virtual Credit Cards. You then take these cards and verify your identity with Paypal, eBay and even Google. Seems harmless enough, right?
Where are these cards coming from? Are they stolen? Who is controlling the industry? What happens when a stolen card is used? The questions go on and on, but one thing is for sure: what may seem like a small problem is growing very fast with millions of credit card numbers being bought and sold for less than $5 a pop. The bigger problem comes with legitimate users doing a transaction on eBay or Paypal and then finding that they were taken in by someone who claimed to be “Verified” but in fact ended up using a stolen virtual credit card. Unfortunately the way the system is designed, the pain point goes right back to the victimized consumer.
It’s hard to believe a problem of this magnitude has gone unnoticed for more than a year now, but the reality is that it’s happening and only getting worse. Check out any major webmaster community such as Digital Point Forums, a rather popular webmaster community, and you can find thousands of people buying and selling VCCs and because it’s happening unknown to the industry, the end result will be consumers having to pay the bill.
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As long as Merchant Services do not get hurt by the actions of criminals and only pass the buck on ...
First of all, this is a great forum...so thanks.
I would have been betting on someone from the financial services industry ...
Only time will tell. but for my take, I found it fascinating how merchant account providers are continuing to find ...
Good post. You make some great points that most people do not fully understand.
"Ultimately, with the banks fitting the bill ...
Merchant Warehouse is an ISO (Independent Sales Office). Paypal is not even in the same realm. Paypal is like western ...
You have to make at list $2 mil a year!!! that's what they told me so this thing you wrote ...
Google is trying to be a jack of all trades, their only success is their search and their advertising program. ...
Comment by Robert on 29 December 2007:
Is there a way to check?
Comment by Riley Poole on 29 December 2007:
Unfortunately no. Paypal Verified use to have some weight and credibility but with their declining merchant protection, that doesn’t mean much if anything.
Comment by Sock Yee on 4 January 2008:
I hope the authorities will come up with a certain regulation to put a stop on this. With ease of access to the cards, anybody will qualify to become a verified seller/buyer and that includes scammers as well. It’s something like you can pay for a reputation. Being actively involved in internet trading business, I’m very concerned on this current scenario because I may end up doing business with a dishonest person. We need to put a stop on this in order to protect our integrity both as a buyer and a seller. I believe the only way to achieve this is to outlaw selling of this so-called virtual credit cards.
Comment by Hank on 4 January 2008:
hmm, I used a VCC once and I wondered the same, where does it come from?
Maybe it’s from CC number generators, something like that…
Comment by Jack on 5 January 2008:
I guess there is flip side to each and everything. One one side these cards provide a possibility of usage of paypal account to so many users like me who are in such countries where cards are issued in such a way that its not possible to use them internationally. Without verification the whole paypal thing is useless. But its some people who misuse it to con other people. Its not only here that facilities are misused. I guess paypal should allow verification through bank accounts, which is still safer and securer way to authenticate as it involves local authorities
Comment by Farah on 25 January 2008:
Why I haven’t thought about this?? I’ve seen some threads in some forums of people selling VCC (they are banned now), and I thought they just got the numbers from some visa gift cards. oh boy, i was dumb
Comment by javablues on 2 February 2008:
I came across that certain banks offer VCC service. It is like a prepaid card . You have to set your fund limit. I don’t see anything wrong with VCC. It is one way to combat online fraud.
Comment by swap on 24 February 2008:
Yes now a days its very common thing many people are verifying their paypal accounts using Virtual Credit Cards which are available very cheaply.
Just came to know that Digital Point Forums has changes its rules and wont allow any post related to Virtual Credit Cards, I hope others follow the same trend.