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Watch For Scams Newsletter.Triangle Credit Card Fraud
October 04, 2012

Triangle Credit Card Fraud

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Triangle Credit Card Fraud

Triangle Credit Card Fraud is a common scam known to affect many on-line merchants. It has been called "Triangle Credit Card Fraud" because there are three primary parties involved or impacted by the scam. The first party is the fraudster who acts as a seller on a popular auction or marketplace site. The fraudster "sells" a product to the second party, the buyer that knows nothing about the scam.

The buyer pays the seller for the product or service. The seller then needs to deliver the product or service to the buyer and does so by placing an order with the manufacturer of the product or service to the buyer and does so by placing an order with the manufacturer of the product or service, the third party.

That order will contain the buyer’s information for shipping and stolen credit card information for billing. When the company receives the order, the billing and shipping information is all legitimate, thus it looks like an order being placed as a gift, so the company delivers the product or service. When the card holder finds a fraudulent charge on their card, they may file a dispute with the credit card company resulting in a chargeback for the company. This scheme is often much more complex as it is often led by overseas criminals who recruit established sellers (often referred to as mules) on auction or marketplace sites to "sell" the products.

Once a sale is completed, the mule will forward the buyer information and the bulk of the money to the fraudster to place the fraudulent order. Once a mule becomes trusted, they are often allowed to recruit other mules, leading to a complex pyramid of fraudsters and mules. Through the on-line merchant community, many companies have been made aware of this scheme and have had great successes with stopping the illegal activity using fraud prevention and detection solutions as well as successful criminal prosecutions.

If you believe you have been a victim of this type of scam you should promptly report it to the IC3's website at The IC3's complaint database links complaints together to refer them to the appropriate law enforcement agency for case consideration.

Remember - always watch for scams!


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