A major criminal scheme has been uncovered in the US, where fraudsters are stealing up to $1 billion annually from retailers and banks using contactless payment technology, according to CNBC.
The criminals use stolen credit card information to purchase gift cards through store mobile apps. These apps generally have lower security levels than financial institutions, which is exploited by the fraudsters.
Gift cards are then used to buy expensive goods, which are subsequently resold in China at a markup. This scheme allows them to bypass strict banking regulations in both the US and China.
Local transactions are often carried out by illegal migrants who use this method to pay off debts to smugglers. Police reports indicate that payment apps disguised as games are found on their phones.
Representatives from Home Depot stated that this method has become the preferred tactic for criminals in recent years, as “it is very low risk” compared to traditional shoplifting.
With the widespread adoption of contactless payment technologies, digital fraud has entered a new phase of organized crime in the retail sector. Since January 2024, law enforcement has made at least 239 arrests as part of a federal operation. However, industry experts and representatives continue to support new legislative initiatives that would improve information sharing and allow for more effective combat against complex financial crimes.
