Visa Global Payment System Risk is aware of recent incidents in the U.S., in which criminals are committing fraud through processing fraudulent purchase return transactions. As part of the fraud scheme, criminals obtain Point-of-Sale (POS) devices—either from an acquirer or agent while posing as a merchant, from online resellers or auctions, or through theft—and program the POS devices with the credentials of a legitimate merchant, thus effectively cloning the unsuspecting merchant’s actual POS device. Criminals subsequently use the cloned POS devices to complete purchase returns to gift cards, often in the range of $2,000 - $6,000 per transaction. After the purchase returns are posted to the gift cards, the cards are cashed out at ATMs. Criminals prefer gift cards, and in certain cases debit cards, as these products often use VisaNet SMS transmission and funds are more rapidly available.

Article ID 36000194803