Online fraud is expensive. The recent StubHub scam cost $1.6 million and the Target data breach cost an estimated $200M (and counting). At Sift Science, we help customers fight back by analyzing millions of data points on patterns of fraudulent behavior and new tactics.
We hear about fraud stories, large and small, and discover something new everyday. Today, we take you back in time to show you 5 of the worst online scams of all time:
5. $1.3MM Lost in Online Dating Scam
In 2013, Ellen, a comfortably retired Canadian woman lost her life savings of $1.3 million to “Dave”. “Dave” connected with and wooed the lonely Ellen, who thought she had found companionship on an online dating site. Dating site fraudsters prey on vulnerable men and women to elicit money, gifts, and other favors. It’s almost too easy to fabricate stories, personalities, and relationships from behind a screen. After crooks form “relationships” digitally, all they have to do is devise legitimate-sounding reasons for their victims to send money overseas.
Although $1.3 million might seem like a small number on this list, this scam is important to note because it is the costliest swindle of its kind (online romance fraud). Keep in mind that this woman was tricked into willingly giving up $1.3 million.
Did You Know?:
- In 2013, online dating scams resulted in $90 million in losses to victims.
- On average, individuals who fall for romance scams lose approximately $21,000.
- 1 in 10 online dating profiles are scams.
4. $85MM Stolen by Gang in ATM Scam
The biggest ATM scam of all time occurred in 2013, when computer hackers stole thousands of individuals’ credit card information within minutes by hacking into several major credit-card processing companies. They then used the information to steal $45 million from hundreds of ATMs around the world.
Although eight New Yorkers and 2 Dutch citizens were arrested following the attack, a similar operation shook the industry weeks later, with fraudsters targeting a different credit-card processing company and bank. This time, the hackers stole $40 million.
3. $200MM Stolen by International Credit Card Fraud Ring
In February 2013, the FBI arrested 18 members of a global credit card fraud ring. This organization was responsible for the theft of $200 million. The scam involved obtaining 7,000 fake identities to steal thousands of credit cards, which were used to “borrow” huge sums of money. To borrow this money, the fraudsters inflated the credit of the false identities by providing fabricated information to credit bureaus.
Fraudsters are sneaky!
2. $200MM in Damages Caused by Global Fraud Ring
In 2010, the harshest sentence ever given for a computer crime was handed down by the U.S. federal court, giving hacker Albert Gonzalez 20 years in prison. Gonzales was convicted of leading a notorious fraud ring that stole hundreds of millions of credit cards by hacking into various retail store accounts. Under the hacker alias SoupNazi, Gonzalez personally amassed $2.8 million, which he used to live lavishly, surrounded by luxury cars and Rolex watches.
Authorities estimate that the scam cost $200 million to businesses and possibly more than $1 billion in total economic damages.
1. Biggest Cyber Crime Case Ever Filed in US History
In July 2013, after pursuing the case for years, federal agents arrested 5 men for hacking into Nasdaq, Visa, Citibank, JetBlue Airways, among other global corporations. Their credit card fraud totaled more than $300 million for companies around the world.
The hackers stole an estimated 160 million card numbers with malicious software installed in Nasdaq servers and hid their crimes by disabling anti-virus software on victims’ computers and storing data on various hacking platforms. They then sold and used this data for huge profits. It turns out that these fraudsters had ties to the 2010 Gonzalez fraud ring—bad habits are hard to break!
At Sift Science, we identify patterns in fraudulent behavior by adapting to your specific business and industry, as well as leveraging the information we see in our global network. We would love to hear about your experiences or stories you’ve heard in the comments below!