In what security experts describe as “cyber money laundering” or “e-fencing,” scammers have perfected yet another way to convert stolen data into cash while sitting at a computer, reports USA Today. How it works: Thieves use a stolen credit card number to buy a gift card online, then sell it to the highest bidder at an online auction website or for a set discount at a gift-card exchange website. “People have found that purchasing gift cards with stolen credit card information and selling them online is very lucrative,” says Joseph LaRocca, vice president of loss prevention at the National Retail Federation.
The ruse helps crooks make use of pilfered credit card numbers before the victim has a chance to deactivate the account. It “extends the life of credit card fraud,” says one expert. Precise measures of the scam are tough to pin down. But gift cards have become a multibillion-dollar enterprise. Banks and retailers will issue a record $97 billion of them this year, up from about $82 billion last year. Since late 2002, merchant- and bank-issued gift cards have been increasingly turning up for resale at eBay, Craigslist and card-exchange sites such as cardavenue.com, plasticjungle.com and swapagift.com.