A U.S. Secret Service investigation that resulted in the shutdown of a multimillion-dollar credit card fraud ring was sparked by an alert from Airlines Reporting Corp. (ARC), according to the company. When ARC's fraud prevention unit detected a pattern of suspicious airline ticket purchases in September 2017, the company alerted the National Cyber-Forensics and Training Alliance (NCFTA), which in turn notified the Secret Service, triggering the investigation. ARC subsequently continued to assist the investigation by monitoring the suspicious purchase patterns linked to the suspected fraudsters.
The investigation ultimately led to six individuals pleading guilty in September in a New Jersey federal court to obtaining more than 4,000 stolen credit card numbers from the dark Web and using the ill-gotten numbers to purchase flights, rental cars, gift cards and luxury and other goods from 2015 to 2018, totaling more than $3.5 million in value, according to the U.S. Department of Justice.
The telltale clue that alerted ARC to potential fraud was the detection of "an unusual amount of credit card chargebacks concerning one small [travel] agency that uses the ARC Pay [payment processing platform] product to charge service fees," said ARC director of fraud investigations Doug Nass.
Overall, the fraud impacted more than 20 travel agencies of all sizes, both brick-and-mortar and online, to the tune of nearly $100,000 in total, including funds those agencies had to pay back to airlines for tickets purchased using the compromised credit cards, according to ARC.
"If ARC had not noticed the fraud, impact to agencies would have been much greater, as the fraud scheme would have continued," said Nass, noting that, after one fraudster who had purchased an airline ticket was intercepted, the ring changed their tactics to focus instead on ground transportation.