Study: Reputation is Key Among Online Credit Card Theft Networks

Mike Randall
By: Mike Randall
Updated: July 24, 2014 publishes personal finance studies on the latest trends in the subprime marketplace. Our articles follow strict editorial guidelines.

When it comes to the complex and sordid world of credit card theft, it turns out there is at least a little trust among these thieves.

A study published recently in the journal Global Crime and funded by the National Institute of Justice shows online marketplaces exist, where buyers and sellers of stolen credit card information regularly do business based simply on trust and reputation.

According to the study’s author, Thomas Holt, a Michigan State University criminologist, “There’s a layer of sophistication here that can’t be understated, and that is very different from what we think about with other forms of crime.”

When you get right down to it, the actual item that is stolen and sold by credit card crooks is simply information – and it is information that might not even have value if it has been reported to the bank.

“Online marketplaces exist, where buyers and

sellers do business based on reputation.”

So how then does this marketplace of criminal activity operate successfully? For one thing, there are moderators, middlemen and guarantors (insurance for thieves, if you will) that operate based on reputation and past success as their guide.

Buyers of the information are requested to seal the deal via electronic payment methods, and they too are rated based on their payment history and the number of purchases they make. Think eBay buyer and seller feedback ratings.

In addition to the auctions for stolen credit card information, there are also illicit service providers that will help the buyer use his illegally acquired card to make purchases or to withdraw cash – for a fee of course.

So far law enforcement has had limited success against these sophisticated and actively managed auction networks.

One suggestion has been for investigators to take a long-term approach and develop a reputation online in one of these forums. Of course that would involve criminal activity on the part of law enforcers, which is typically not an approach they like to take.

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