BUSINESS INSURANCE BULLETIN
ForthQuarter 1999
Last year investigators uncovered a scam that cost 900,000 consumers a total of $49 million.
It started when a customer noticed $19.95 billed to his credit card.
Three months later a slew of bogus charges were uncovered, bilking consumers out of $49 million. According to maximum PC magazine and federal officials, at the center of the scan was a California businessman who charged consumers through Internet companies for services they never asked for.
By acting as a credit card processor for small web sites, the extra charges were billed to illegally obtained, sometimes randomly generated credit cards. Maximum PC notes that programs which can generate random credit card numbers can easily be found on the Internet.
Consumers should be particularly aware, the magazine notes, because "as long as 90 percent of people don't notice the charges are illegitimate," both the criminals and the credit card companies make money.
